At a time when Japanese retailers are struggling with sales tax hikes, operator Don Quijote Holdings is sure to extend its 25-year streak of growth, using an approach that's paying off: transform Japan into a mecca for tourism. Foreign tourists flock to shop at the group's 24-hour department stores, spending an average of twenty times as much as a Japanese consumer, but Don Quijote wants many more. Known for selling everything from toilet paper to Prada handbags, Don Quixote has also long attracted many celebrities such as Lady Gaga.
Don Quijote wants to expand the business by making agreements with various hotel and restaurant chains to promote Japan as a tourist destination. A spin off of the group is dedicated to signing partnerships with local administrations and businesses to attract tourists with promotional maps and loyalty cards. The operation should ensure new customers in the 250 department stores in the country.
Attracting tourists becomes imperative to sustain sales at a time when Japan's population is declining and getting older. Japan is only 33rd on the list of the world's most visited countries, and tourist spending accounts for just 3,5% of the country's revenue. Tokyo intends to double the number of foreign tourists to 20 million by 2020. Taxes on purchases increased from 5% to 8% in April and are expected to reach 10% next year.
