Retailers Woo Foreign Tourists With Duty - Free Sections, Other Campaigns

Retailers woo foreign tourists with duty-free sections, other campaignsRetailers are adding more tax-free counters and launching customer-friendly services to encourage spending by the growing influx of foreign tourists on the back of the weaker yen and the expansion of duty-free items.

The moves to expand services catering to tourists come amid a dramatic rise in overseas visitors, with the number from January to October surpassing all of 2013.

The central government added food items, beverages, cosmetics and other items to the list that foreign tourists can purchase tax free in October.

“We want to establish a world-class quality facility in the Ginza district,” said Ryoichi Yamamoto, president of J. Front Retailing Co., which is constructing a major commercial building in the area.

Yamamoto said in an interview with The Asahi Shimbun on Dec. 16 that the holding company had started construction work on the former site of the Matsuzakaya department store, with the completion date scheduled for 2016.

The project includes the installation of a special counter to handle tax-exemption procedures, an information center and a tour bus station, Yamamoto said.

Daimaru Matsuzakaya Department Stores Co., which is under the umbrella of J. Front Retailing, is also planning to increase the number of its stores in rural Japan that also have tax-free counters.

It is hoping the increasing numbers of independent tourists will result in the creation of commercial opportunities in rural areas.

Of the 15 stores Daimaru Matsuzakaya operates in Japan, only six have such counters.

The company estimates that duty-free sales as a proportion of overall sales at the 15 stores will grow to 1.8 percent in the year ending February 2015, from 0.9 percent in the previous year. It is forecasting that figure to soar to 10 percent at some point in the future.

In a similar vein, Takashimaya Co. will start providing a service at its Shinjuku and Osaka department stores whereby foreign customers can have their purchases sent directly to the airport they are departing from. Purchases of 100,000 yen ($856) or more qualify for free shipping. The service will begin Dec. 20.

The airport-style duty-free store scheduled to open in autumn 2015 at the Mitsukoshi department store in the Ginza will also offer a similar shipping service.

The goods for sale at the store will be exempt from the consumption tax as well as alcohol and tobacco taxes.

Seven-Eleven Japan Co. set up tax-free counters Dec. 1 at two of its convenience stores--the Asakusa Kaminarimon-mae store in Tokyo’s Taito Ward and the Saiin-eki Minami store in Kyoto.

The most popular duty-free items at the convenience stores are cosmetics, Seven-Eleven Japan said based on purchase data.

Aeon Retail Co. said it will increase the number of its general merchandise supermarket stores that provide duty-free shopping from the current 100 to 300 by the spring of 2015.

The increase means 70 percent of the stores that Aeon Retail runs will accommodate tax-free shoppers. Aeon Retail said it will sell a wide range of duty-free daily necessities at the outlets.

In Fukuoka, the Canal City Hakata, a commercial complex, is now allowing South Korean tourists to pay by a credit card that was only used in South Korea. The service, designed to cater to the large numbers of South Korean visitors to the facility, began Dec. 16.

Kyushu Card Co. formed a business tie-up with Shinhan Card Co., the South Korean company that issues the credit card, in order to launch the service. Kyushu Card said it will expand the partnership with other Japanese credit card companies to enable the use of the South Korean credit card nationwide. Kyushu Card said the new service is modeled after the China UnionPay debit card that can now be used at more than 100,000 stores in Japan.

According to the Japan National Tourism Organization and the Japan Tourism Agency, the number of overseas tourists visiting Japan between January and October reached 11.01 million, exceeding the annual record of 10.36 million set in 2013. The figure for 2014 is forecast to reach around 13 million, the organizations said.

Accordingly, spending by tourists between January and September exceeded that for all of 2013. The amount during the period was 1.47 trillion yen, which is expected to reach the 2 trillion-mark by year-end.