Japan is still the paradise for luxury brands (and increasingly so)
Every year, the Japanese spend about 33,000 million dollars (29,000 million euros) in luxury goods, which made Japan in 2017 the second largest market in the world for this industry. Behind the United States and ahead of China, which spent 7.4 billion, according to consulting firm McKinsey.
According to another consulting firm specialized in luxury, Agility Research & Strategy, the Japanese are responsible for between 30% and 40% of the global profitability of many brands. And yes, local spending is doing well, but now Japan is also relevant for its status as a recipient of wealthy Chinese and South Korean tourists, whose purchases have increased especially in Tokyo and Osaka. In addition, consumption has been partially redirected towards experiences. Bain & Company forecasts luxury growth in Japan of between 6% and 8% in 2018, more than in Europe (2-4%) and America (3-5%) and less than in China (20-22 %).
Although they are close, Chinese and Japanese consumers have little to do. The latter are not very likely to consult social networks to make their purchases, unlike what happens in other Asian states, or to follow the tastes of their celebrities. And less than 10% of retail sales occur online, as Japanese people prefer the traditional experience of shopping in physical stores.
The Japanese is a mature luxury market that will grow even more, predictably, given the proximity of the Tokyo 2020 Olympic Games. Brands are warned.
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