Japan’s currency, the yen, has hit rock bottom, making the country a hot spot for bargain-hunting tourists. Everything is cheaper now, including those oh-so-coveted luxury items.
Naturally, tourists—mostly from China—are flooding Japan, ready to splurge on designer goods and live it up.
With the yen in freefall, companies can’t easily adjust prices to match the currency, leaving them stuck with thinner profit margins in Japan, at least while the yen remains weak.
Take Zhang Lei, for example, a 29-year-old DJ from Hunan province. On his first trip to Japan, he’s already planning a return visit. “It’s cheaper,” Zhang says, clutching two Louis Vuitton shopping bags and another from the sportswear brand Onitsuka Tiger. This was just another Saturday in Tokyo’s swanky Ginza district.
Nearby, about 15 people lined up to enter the Louis Vuitton boutique, fanning themselves in the scorching sun. Zhang’s loot so far includes shoes and bags, with a watch next on his shopping list.
This shopping spree has caught the attention of French luxury giant LVMH, which owns brands like Dior and Fendi. LVMH has seen a significant business shift from Asia to Japan. The company faces deflationary pressure in China as customers hold off on local purchases, squeezing their profit margins.
For instance, Louis Vuitton’s popular Alma BB handbag sells for 14,800 yuan in China (about 2,050 USD), but in Japan, it’s priced at 279,400 yen (1,875 USD). Last month, with the yen at its weakest, the same bag cost as little as 1,725 USD in Japan. Talk about a steal!
The weak yen is also boosting sales of luxury booze. According to Remy Cointreau, Chinese tourists are snapping up high-end alcoholic drinks in Japan, fueling significant sales growth driven by tourism.
High-end brands are practically on sale in Japan. “Tourists will buy Dior, but we’ll hit Chanel first,” one shopper says with a grin.
So, if you’re a luxury lover, now’s the time to head to Japan and make the most of the yen’s downfall. Happy shopping!