China travel curbs hit Japan duty-free sales in December
The nation can lose as much as 1.2 trillion yen in tourism revenue in 2026 if restrictions persist
[TOKYO] Duty-free sales at Japan’s leading department store operators fell sharply in December, highlighting how prolonged geopolitical tensions with China are weighing on the retail sector.
At Daimaru and Matsuzakaya stores of J Front Retailing, duty-free sales plunged 17 per cent year on year, dragging overall sales down 1.9 per cent for the month.
Takashimaya said that tax-free sales declined 11 per cent, as inbound spending slumped, partly due to Beijing’s advisory discouraging travel to Japan. The slowdown limited the company’s overall sales growth to 4.1 per cent, despite resilient domestic demand.
Matsuya reported about an 11 per cent drop at its flagship Ginza store last month, citing the absence of Chinese tourists. Isetan Mitsukoshi said that duty-free sales across its domestic stores fell 14 per cent, pulling total sales down 0.5 per cent.
Chinese visitors have been a crucial driver of Japan’s economic recovery since borders reopened after the Covid-19 pandemic, contributing roughly a fifth of the nation’s 8.1 trillion yen (S$66.4 billion) tourism revenue.
That reliance has now become a vulnerability, exposing retailers to shifts in Chinese travel trends as political frictions resurface.
Visitor growth from China slowed in November to its weakest pace in nearly four years, after Beijing curbed travel in response to Prime Minister Sanae Takaichi’s remarks on Taiwan.
China has also ordered airlines to reduce flights to Japan until March, a move that could spell more pain in the months ahead for Japanese retailers and the tourism industry.
Tourism remains one of Japan’s key growth engines, and a prolonged pullback risks denting corporate earnings and broader economic recovery.
Japan could lose as much as 1.2 trillion yen in tourism revenue this year if travel restrictions persist, said Hiromu Komiya, an economist at the Japan Research Institute. BLOOMBERG
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