TOKYO -- Duty-free sales at Japan's department stores dropped for the first time in 26 months in January, highlighting a decline in spending by Chinese buyers as the economy slows in China and the effect of a new e-commerce law in the country.
January duty-free sales at department stores came to 26.2 billion yen, said a report released Thursday by the Japan Department Stores Association. Sales fell 7.7% on the year despite a slight increase in the number of customers.
"On top of the slowing Chinese economy, due to the U.S.-China trade war, restrictions on duty-free products [in China] have tightened since the beginning of the year," according to the report. The e-commerce law, which took effect Jan. 1, restricts purchases by Chinese buyers who bring back products from overseas for sale online in China.
Chinese buyers have been key customers for Japan's retail sector because of their large purchases per visit. While duty-free sales figures include purchases by all overseas tourists, Chinese make up the biggest segment.
The last time duty-free sales fell was in 2016, when China raised import taxes.
According to the Japan National Tourism Organization, the total number of arrivals from China rose 19.3% in January compared with the previous year.