What: Chinese tourism to Japan dropped by 50% over Lunar New Year, while Thailand saw a surge in Chinese visitors and spending.

Why it is important: The changing flow of Chinese tourists highlights the vulnerability of retail sectors to geopolitical shifts and evolving travel priorities.

A dramatic 50% decline in Chinese tourism to Japan during Lunar New Year has had a significant impact on the country’s retail sector, particularly in duty-free and luxury segments that rely heavily on international visitors. In contrast, Thailand experienced a notable increase in Chinese arrivals and corresponding retail activity, benefiting from shifting travel preferences and more favourable policies. These developments underscore the volatility of Asian retail markets, where geopolitical tensions, policy changes, and evolving consumer priorities can rapidly alter the competitive landscape. Retailers in Japan are facing declining sales and must reconsider their strategies as traditional shopping-driven tourism wanes, while those in Thailand are capitalising on the influx by enhancing their offerings to attract and retain Chinese shoppers. This divergence highlights the need for agility and innovation among brands and retailers, as the ability to respond quickly to changes in tourist flows and spending habits is increasingly critical for success in the region’s dynamic retail environment.

IADS Notes: In June 2025, Japan Times reported a 40% year-on-year drop in Japanese department store tax-free sales, with falling tourist numbers and changing shopping priorities linked to shifting Chinese travel patterns. The Economist in January 2026 noted a rise in budget-conscious Chinese tourists in Hong Kong, with lower per-visitor spending and a disconnect between foot traffic and retail sales. Inside Retail’s September 2025 coverage of South Korea described how retailers are launching new promotions and experiential concepts to attract Chinese tourists, though higher arrivals do not always translate into increased sales. Retail Asia’s March 2025 analysis of Hong Kong emphasised the complex relationship between policy changes and retail performance, while the Financial Times in May 2025 highlighted the rise of “special forces” tourists—Chinese travellers who prioritise sightseeing over shopping—prompting retailers to rethink their strategies amid fluctuating tourist flows.

Chinese tourism to Japan plunges 50% over Lunar New Year as Thailand cashes in