Economy Luxury brands troubled by splurging tourists in Japan

[thomas]

Luxury brands are grappling with a surge in demand from foreign tourists flocking to Japan to capitalize on the weak yen. With high-end goods significantly cheaper in Japan than in other markets, companies like LVMH face squeezed profit margins. While the influx of shoppers is boosting sales, the inability to adjust prices quickly enough to match currency fluctuations has created challenges for the luxury industry.

Zhang Lei, a 29-year-old DJ from the southern province of Hunan, was visiting Japan for the first time but said he already wanted to come again. "It's cheaper," said Zhang, who carried two Louis Vuitton shopping bags and one from sportswear brand Onitsuka Tiger on a recent Saturday in Tokyo's high-end Ginza district. Nearby, some 15 people queued up to enter the Louis Vuitton boutique, fanning themselves in the sweltering heat. Zhang said his purchases so far included shoes and a bag. He planned to pick up a watch next, he said, pointing to his wrist as he repeated "Rolex".The trend has surprised French luxury giant LVMH, which owns Dior and Fendi.

https://www.reuters.com/world/japan/tourist-splurge-japan-creates-new-headache-luxury-brands-2024-08-01/

I guess that a lot of these tourists resell at home:

This month, a 30-year-old Chinese woman named Snow bought a bag and two accessories from a Gucci shop at the Matsuya department store in Tokyo's Ginza district. The total came to about 520,000 yen ($3,390). This was Snow's first visit to China with her boyfriend, but they did no sightseeing during their seven-day stay in Tokyo. She was not alone in boosting her buying power. "With the effect of the weak yen, shopping is quite affordable," said a 22-year-old Chinese man who visited Japan in June. "You could buy a Bulgari necklace that costs 368,000 yen in mainland China for 300,000 yen in Japan. The clothes I bought for 80,000 yen when I visited Japan in 2018 cost 5,000 yuan at the time, but now they've gone down to 4,000 yuan," the man said.

Paywall alert:

Chinese tourists buying Gucci make Japan exception to global luxury slump

International shoppers reap fruits of weak yen at Tokyo department stores

asia.nikkei.com

Luxury brands count cost as shoppers from overseas enjoy weak yen discount

Goods sold in Japan by global luxury brands, ranging from designer sneakers to whisky, now tend to be cheaper in dollar terms than elsewhere.

www.japantimes.co.jp

 

[dracuella]

If ever there was a first world problem...

the inability to adjust prices quickly enough to match currency fluctuations has created challenges for the luxury industry.

In what galaxy is this true?? What are they doing, manually adjusting the prices in the database for each item using a calculator? Unless the exchange rate plummets one day and they only do nightly adjustments, there is absolutely no way luxury brands don't have this covered.
Modern sales/inventory management systems have these things built-in; you don't even have to input the exchange rates, these are fetched via webservices completely automatically. If they're using software to manage their price points older than this, shame on them for not investing in IT. In which case I don't feel sorry for them whatsoever!

grunts unhappily in someone who has had to develop features for decades-old software because the company was to cheap to care

 

[thomas]

True, please replace "inability" with "unwillingness".