What: Thanks to the macroeconomics, luxury is thriving in Japan while it is struggling in other markets.

Why it is important: Forget globalization, we are getting back to a fragmented world where macroeconomics generates contrary trends at the national level, making the fortunes (or not) of local players.

Major department stores like Matsuya and Takashimaya are experiencing record sales, with luxury brands like Gucci and Dior thriving.

Japan, with its affluent population and appeal to tourists, has become a hotspot for luxury shopping. This is further boosted by a weak currency and the return of Chinese tourists post-pandemic.

The luxury market's growth in Japan is broad-based but heavily relies on tourist spending, with foreign buyers contributing significantly to sales. Domestic demand remains solid, partly due to the weaker yen keeping Japanese spenders at home.

High-end brands are experiencing varying degrees of success. While some, like Gucci and Burberry, are thriving in Japan, others are facing challenges in different markets. Pricing strategies, particularly in comparison to costs in Europe, the US, and China, play a crucial role in attracting buyers, especially from China.

The current luxury boom in Japan is underpinned by a culture of brand loyalty and an increasing appeal of sustainable products. The luxury market is leveraging strategies like in-store appointments, personal shopping services, and marketing through platforms like WeChat to attract and retain customers.

Return of rich tourists and weak yen helps Japan escape luxury downturn