Boom in Luxury in Japan thanks to Chinese Shoppers

There is no doubt that Japan is “on fire,” as Prada’s CEO Andrea Guerra said last week at the FT Business of Luxury Summit: the Italian company’s sales there grew by almost 50% in the three months to March compared to the previous year. The industry leader LVMH reported “strong double-digit growth” during the quarter, while Richemont benefited from a 20% increase in annual revenue from Japan.

Year-over-year comparisons are flattering because Japan was slow to reopen its borders after Covid-19. But LVMH, Richemont, and Prada’s gains in Japan in 2023 have far exceeded those recorded in their last full financial year before the virus limited global travel.

Japanese spending is fueling expectations of a global resurgence in overseas Chinese shopping, which executives from the three companies hailed as one of the reasons behind the positive results. This would be good news for the sector, which is currently facing headwinds. Chinese tourist spending, wiped out by the pandemic, had been a key driver for global luxury: in 2018, Chinese shoppers made more than 70% of their estimated €85 billion luxury purchases abroad, according to Bain data.

Richemont’s sales in Japan grew by 8.4% to €1.8 billion in the 12 months to March 31, 2024, compared to the previous year, according to results published on May 17. The increase was 20% in constant currency terms, the company said. In his commentary on the results, CEO Jérôme Lambert noted that strong sales in Japan were driven by Chinese visitors to the country.

Prada reported that revenues in Japan grew by 46% to €113 million between January and March, compared to the previous year, according to documents filed on April 24.

LVMH also reported “strong double-digit growth” in Japan sales in a quarterly statement on April 16.