As a recent economic surge lifts spending in Japan?s luxury market ? the second largest in the world ? how can brands capitalise on this momentum"
TOKYO, Japan ? Japan?s luxury-goods market is growing steadily again, about five years after it was knocked off course. The global financial crisis in 2011, followed by the T?hoku and Fukushima catastrophes, hurt consumer confidence, causing luxury spending in Japan to shrink by over 1 trillion yen ($10.6 billion) in 2012, and saw the world?s third-largest economy to fall into years of tepid growth and deflation.
Today, Japan is looking very different. According to a new report by McKinsey & Co shared exclusively with BoF, Japanese consumers are now spending 3.6 trillion yen (about $33 billion) each year on luxury goods. Business leaders are also feeling more optimistic, with over half of local luxury executives surveyed by McKinsey viewing Japan, which accounts for as much as 30 to 40 percent of some global brands? profitability, as a growth engine and profit generator. The country is back on track, thanks in part to prime minister Shinz? Abe’s economic strategy known as “Abenomics.” The policy, which launched in 2013, helped propel the Japanese economy into a cycle of rising wages, spending and inflation. Recent figures showed that GDP grew 1.4 percent between July and September 2017, driven by stronger global demand for Japanese exports, putting the country on course for its seventh consecutive qua...