Japan's Tourism Caters to Chinese Visitors

Tokyo's Akihabara neighborhood, a warren of narrow streets and storefronts selling every conceivable electronic gadget, is a perennial attraction for visitors to Japan. While it's common to hear a mishmash of foreign languages among the Japanese voices, Mandarin has lately become a growing part of the mix. "My favorite brand is Sony (SNE) because it's the most famous," says Na She, a 42-year-old from China's Hubei province who spent about $1,000 for a Sony camera. "The latest models are hard to find in my town."

Chinese visitors to Japan may soon outnumber tourists from any other country. Visits from China grew by 0.6 percent, to 1 million last year, while those from South Korea dropped by 33 percent, to 1.6 million, and Taiwanese were down 26 percent, to just over 1 million, according to the Japan National Tourism Organization. The Japanese Foreign Affairs Ministry expects China's numbers to soar to 10 million annually in coming years because of relaxed visa rules for Chinese that went into effect on July 1.

The Chinese are also the biggest spenders, dropping an average of $1,300 per trip, vs. $340 for Koreans and $280 for Americans, according to the tourism organization. If the yuan strengthens, that spending gap could widen. "Chinese people have a strong brand consciousness, and the currency's appreciation would make overseas brands more appealing," says Yoshinobu Uehara, who oversees an $830 million China-focused fund at Sumitomo Mitsui Asset Management.

Akihabara, which started as a black market after World War II, is on the itinerary for more than 40 percent of Chinese visitors to Japan, according to the Akihabara Tourism Promotion Assn. Electronics giant Sony has printed up Chinese-language maps of Akihabara to steer mainlanders to the coolest shops (especially those selling Sony goods, of course). Yamada Denki, Japan's biggest electronics retailer, has hired 100 Mandarin or Cantonese speakers. Laox, a Japanese electronics chain controlled by Chinese companies, expects customers from the mainland to triple next year because of the easier visa rules. The company is talking with hotel operators and travel agencies about offering Chinese tourists discounts. Says Hajime Kikuchi, a director in Laox's business planning section: Chinese "buy one thing after another without a second thought."

The bottom line: Chinese tourists to Japan may soon outnumber visitors from any other country, and Akihabara's gadget sellers are ready for them.

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