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Changes observed in 'explosive purchasing' habits of Chinese tourists

Chinese tourists are seen selecting cosmetics products for purchase on Feb. 8, 2016, at the Ginza Mitsukoshi department store in Tokyo's Chuo Ward. (Mainichi)

Hoping to cash in on the rising consumer demand of Chinese tourists, retail and tourist industries are setting up special sales spaces, as well as expanded hands-on services targeting potential repeat customers. And with spring festival shopping season in full swing, changes are now being seen in the "explosive buying" patterns, where expensive brand items and household goods are purchased in large quantities all at once.

    Numerous Chinese tourists are presently surging into Japan due to the long spring holiday from Feb. 7-13, which takes place to fete the Lunar New Year on Feb. 8.

    "There are so many different types of products available, and I ended up making impulsive purchases of cosmetics," commented a 24-year-old Chinese woman from Shanghai who traveled to Japan along with three female friends, and was enjoying a shopping spree on Feb. 8 at an airport-style duty-free shop in Tokyo's Ginza Mitsukoshi department store.

    She added, "I plan to spend around 10,000 yuan (slightly more than 170,000 yen) during my trip."

    Airport-style duty-free shops are known for exemptions that are available not only for consumption taxes, but also for the taxes normally levied upon alcohol and cigarettes.

    The Ginza Mitsukoshi outlet opened at the end of January, just ahead of the Chinese holiday season. Occupying the entire 3,300-square-meter sales space on the eighth floor, numerous products are available there for sale such as cosmetics and luxury brand items.

    "I haven't experienced any particular effects from the slowdown of China's economic growth," replied a smiling Chao Song Huang, 50 -- a handbag manufacturing company president who visited the store along with a group of five other people, including family members -- when queried about the visit. "My travel budget for this trip is around 1 million yen."

    Fears about the decelerating Chinese economy have prompted falling stock prices worldwide since the beginning of this year. Still, however, the number of overseas tourists visiting Japan -- particularly Chinese -- has continued to ascend.

    "We have received around twice as many overnight accommodation reservations this year as we did during the spring festival season last year," commented a representative from travel agency JTB.

    On Feb. 7, the proceeds from Ginza Mitsukoshi's duty-free goods targeted toward foreign customers were 12 percent higher than those seen on Feb. 18 of last year, which was the first day of the spring festival holiday season.

    Certain outlets in other areas of the country are also seeing the effects of the spring shopping demand. The store branch in the city of Sapporo saw its proceeds increase a total of 67 percent during the same period, which coincides with the Sapporo Snow Festival.

    There have been observations, however, that changes are now taking place among Chinese tourists with respect to the phenomenon of "bakugai," or explosive purchasing -- a term that came into general parlance last year. While products such as rice cookers and bidets were previously purchased in enormous quantities at electronics retail stores, products that are proving to be popular this spring shopping season at Yodobashi Camera reportedly include cosmetics and stainless steel bottles.

    "The number of customers itself is increasing -- but the purchasing power that we saw in the past is no longer there," commented a store representative. "Things have changed."

    A PR spokesperson from the Sogo & Seibu Co. similarly commented, "It seems that rather than large-scale purchases of expensive brands, we are now seeing more cases whereby people are purchasing items such as domestic brands of children's clothing, and food products -- and are taking their time to inspect the products first."

    Meanwhile, a representative from major discount store Don Quixote commented, "We have seen increased sales in items such as health food products, as well as cleansing substances made with natural ingredients that are capable of washing pesticides off of vegetables."

    According to figures released by the Japan Tourism Agency, Chinese tourists who visited Japan between October and December 2015 spent an average of 164,000 yen each while shopping -- surpassing the previous year's figure of 138,000 yen.

    There have also been observations that the changes seen in the consumer patterns of this year's spring shopping season are grounded in a number of different factors, including an increasing number of tourist "repeaters," or those who have returned to Japan for subsequent visits; as well as the depreciation of the yuan making shopping in Japan less attractive, and the fact that Internet shopping now means that Japanese products are also available to Chinese consumers online.

    Efforts are now additionally taking place to offer tourists hands-on experiences that are unavailable outside of Japan's borders. The Odakyu Group, for example, hosted an origami-folding and calligraphy-painting event between Feb. 6 and 8 at a Hakone Ropeway station in Kanagawa Prefecture.

    JTB, meanwhile, has seen popularity with its ice-breaking tours in Hokkaido that allow passengers to view drift ice in the Sea of Okhotsk; while travel company H.I.S. Co, Ltd. has been attracting an increasing number of participants in its "samurai trainings," which feature lessons in theatrical combat while brandishing swords and wearing Japanese-style dress.

    "The base of Chinese tourism to Japan is broadening, since it is no longer restricted to a small slice of the ultra-rich -- but has now expanded to additionally include relatively affluent members of the middle class," notes Masashi Shoda, an analyst at Nomura Securities. "Even despite the slight downturn in the Chinese economy, it seems likely that the number of tourists will continue to increase."

    He adds, however, "Tourist buying power will depend upon currency exchange rates -- and there is a possibility that these will decline. In order to harness Chinese demand, it will be necessary to find ways to increase the number of services and products that are available exclusively in Japan -- including in the areas of medicine and beauty."

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