TOKYO • Chinese tourists buying million-yen watches and luxury brands helped boost sales at Japanese premium outlet malls owned by Mitsubishi Estate to a record last year, as a weaker currency led to a surge in bargain-hunting visitors.
Premium outlet sales jumped by more than 10 per cent to between 300 billion yen (S$3.6 billion) and 350 billion yen last year, Mr Yutaka Tajima, a senior executive officer at Mitsubishi Estate, said in an interview on Monday. He is targeting higher sales this year, he said.
The tourism boom is helping Japan's largest developer by market value navigate slowing consumption as the nation's population drops.
Overseas tourists visiting the company's nine high-end outlets rose more than 80 per cent to 1.17 million in the first nine months of last year, Mr Tajima said. For the first time in 45 years, the number of visitors to Japan overtook people travelling abroad last year.
"We benefited from a big increase in inbound tourists from China last year," Mr Tajima said. "More people are looking for high-quality goods, rather than just cheap products. Japan's population is shrinking and consumption is flatlining, so tourists are very important for us."
Japan's population shrank in the past seven years to 126.9 million last year, the smallest since 2000, according to estimates by the United States Census Bureau.
It is set to decline by more than 700,000 a year on average between 2020 and 2030, according to the National Institute of Population and Social Security Research.
Mitsubishi Estate is setting up currency exchanges in its facilities, helping tenants train staff in different languages, adding prayer rooms and making maps of tax-free shops to help overseas visitors navigate shopping centres, Mr Tajima said. Gotenba mall, near the foot of Mount Fuji, 90 minutes by bus from Tokyo, is the largest and most popular with foreigners, whose purchases topped 20 per cent of overall sales there last year, he said.
The outlet has 210 stores and includes brands from Gucci to Ralph Lauren. "It's become part of a sightseeing course for overseas visitors," he said.
Seiko Holdings is one of the companies benefiting from the influx of shoppers, Mr Tajima said. The Tokyo-based manufacturer of the luxury Grand Seiko brand predicts sales of timepieces will help boost overall sales by 3.9 per cent to 305 billion yen in the fiscal year ending March 31.
"We have a lot of regular Seiko models in outlets, but high-end watches from a few hundred thousand yen to one million yen are popular in outlets as well as Ginza, shops and department stores," said Mr Tajima.
Spending by the average Chinese tourist was 283,842 yen last year, the most of visitors from any country, and 23 per cent more than Australians, the second-biggest spenders, according to the Japan Tourism Agency.
The yuan gained 33 per cent to 18.5 against the yen in the three years to the end of last year, according to data compiled by Bloomberg.
Mitsubishi Estate will open a 10th premium outlet mall in Hanazono, Saitama prefecture, to the north-west of Tokyo, in 2018, Mr Tajima said.
Mitsubishi Estate shares fell 5.2 per cent to 2,135 yen at the close of Tokyo trading on Tuesday. They have dropped 15 per cent this year, a similar decline to the Nikkei 225 Stock Average. Mitsubishi Estate owns the premium malls through a joint venture with Simon Property Group, the largest American mall owner.
BLOOMBERG
