Recently, Japan’s consumption situation has been largely influenced by external factors such as the Abenomics economic policy, excessive movement in exchange rates, and turbulent stock prices triggered by the Shanghai stock market crash. For fiscal year 2015, domestic demands have been pursuing a seesaw pattern and the export market has been sluggish. Despite all this, some consumers have been profiting off stocks and purchasing luxury items. Imported watches around 2 to 3 million yen and jewelry items over 5 million yen are selling well. Germany’s luxury car brands have seen double-digit increases from the previous year and are leading in terms of growth within the luxury market.

How about fashion? Japan Department Stores Association announced that the sales of department stores throughout Japan in August totaled 436.2 billion yen, an increase by 2.7% from the corresponding month of the previous year. This is the fifth straight month of increase. As good weather and hot temperatures continued for the first half of August, sales for light summer clothing and cosmetics for UV protection/care were steady. As temperatures dropped in the second half of the month, fall clothing such as knitwear became the lead products in terms of sales. The increase in foreign tourists helped sales of luxury items such as jewelry/precious metals and clothing, where there was also an increase in sales compared to the previous year. As foreign tourists chose to visit Japan during the summer vacation season with their families, departments stores saw a 293% growth in the number of paying customers, a 259.6% growth in revenue, and achieved the 3rd best monthly sales performance (17.2 billion yen) since records began.

For department stores, inbound consumption has been a crucial factor as the inflow of overseas tourists have been pushing up sales. There has been tremendous consumption from tourists especially from the Greater China area, many who have recently extended their purchases to Tokyo-based brands. At Ginza Mitsukoshi, the brand Akira Naka which successfully mixes mode designs into approachable pieces has been a best-seller, as well as mame and MUVEIL which are brands also popular within Japan. These 3 brands have seen a growing number of repeaters and exclusive buyers from Hong Kong, Taiwan, and China. Designer Akira Naka comments “Sense of fashion has been growing among women of the Greater China region. They are attaining information at a rapid rate and are constantly checking the trends in Japanese magazines and websites”.

In addition to luxury items, casual brands worn by creative career types are doing well. The mid-price range brands that are between high-end and affordable are struggling the most, as they target Japanese customers. We are seeing Japanese consumer confidence weakening and the influence of foreign tourists growing more and more. It seems this will continue to be the trend and foreign tourists will determine what sells in Japan in the near future.