Luxury Jewellery in Japan

PROSPECTS

Department stores encourage consumers to buy luxury jewellery before tax rise

The long delayed rise in VAT boosted sales of luxury jewellery in 2019 as consumers rushed to purchase products before it was finally implemented in October. This demand was bolstered by the aggressive activity of department stores, which held jewellery fairs in the September immediately prior to the tax increase.

Demand enhanced by conditions at home and abroad

With economic conditions improving, the number of high net worth individuals in Japan rose strongly at the end of the review period despite the ongoing decline in the overall population. Furthermore, the Chinese Government’s decision to reduce the tax on luxury goods imported into China in 2018, having raised it two years previously, boosted demand for luxury jewellery amongst Chinese tourists in Japan, with the tax on items including gold and silverware being lowered further in the first half of 2019.

Targeting demand trends amongst younger consumers

Competition from internet retailing is forcing store-based retailers to focus on enhancing key competitive advantages, and particularly consumers’ in-store experience. At the same time, the digitalisation of Japanese culture and the rise of internet retailing are blurring the boundaries between traditional store-based retailing and e-commerce.

COMPETITIVE LANDSCAPE

Richemont adds new brand to portfolio

Richemont Japan Ltd retained the lead in luxury jewellery in 2018 with a strong portfolio including the Cartier, Van Clle & Arpels and Piaget. In 2019, Richemont Japan’s parent company strengthened its global portfolio with the acquisition of the Italian luxury jewellery house, Buccelatti.

Tiffany aiming at key trends amongst Millennials and Gen Z

Tiffany & Co, the second largest player in luxury jewellery, was prominent in its efforts to appeal to the sensibilities and preferences of Millennials and Gen Z consumers at the end of the review period. In 2019, the company opened its Tiffany Café at its new Tiffany @ Cat Street concept store in the Harajuku neighbourhood of Tokyo.

VR, personalisation and novel experiences

Tiffany & Co was not the only leading luxury jewellery player to target the sensibilities of Millennials and Gen Z consumers towards the end of the review period. Swarovski introduced a virtual fitting room at its pop-up shop on Omotesando, a prominent shopping street in Tokyo.

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