South Korean and Japanese retail giant Lotte has opened its first downtown duty-free store in Japan as part of its plan to drive revenue from travel retail. Lotte is also planning to open four more similar downtown stores in Japan within five years, targeting the influx of Chinese tourists.

The new store, situated in a Ginza shopping mall, will offer tax-free shopping for luxury and Japanese brands including Samantha Thavasa, Casio and Kose skincare. Consumption tax, import duties and tobacco and liquor taxes are waived at the shop when customers present their passport and air ticket at checkout. Purchased goods can only be picked up at their departing airport after clearing customs.

The number of foreign visitors to Japan is expected to reach 40m in 2020, according to government data, representing a huge opportunity for department store chains struggling to keep up with cheaper fast fashion chains.

Isetan opened a similar duty-free concept in Ginza in January, and will open another one in Fukuoka this month.