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The Japanese yen exchange rate has hit a new low, causing tourists to buy luxury goods in Japan

According to Nikkei Chinese website, due to the unchanged pillar strategy of the Bank of Japan, the selling of the Japanese yen against various currencies has not intensified. On April 29th, the Japanese yen further rose against the US dollar, falling below 160 yen per dollar for the first time since 1990. In terms of the euro, there is no situation where 1 euro is exchanged for 171 yen, which is the lowest point since the euro was pushed down by a single currency in 1999.


The continuous rise in exchange rates has made luxury goods in Japan cheaper.
Taking Louis Vuitton as an example, the price of a medium Carryall handbag in mainland China is 21500 yuan, while in France and Japan it is 2250 euros and 396000 yen respectively (approximately equivalent to 17444 yuan and 18415 yuan). But if combined with a tax refund rate of about 10% for Japanese tourists, the selling price of this handbag in Japan is about 16569 yuan.
The most welcomed ones are not top luxury brands such as Louis Vuitton, as they have a strong ability to balance prices in different global shopping malls. But for second tier brands like Miu Miu, their popular leather dress bags in recent years are priced at 29700 yuan and 462000 yen (about 21500 yuan) in China and Japan, and after tax refunds, they ultimately need to pay less than 20000 yuan in Japan.
It can be seen that nowadays in luxury brand dense commercial districts such as Ginza in Tokyo and Kousaibashi in Osaka, there are a large number of tourists at the forefront of luxury brand stores. But for Japanese people, the rise in the yen exchange rate has had a significant impact on their overseas purchasing power. According to the Nikkei Chinese News, due to the appreciation of the Japanese yen, Japanese people tend to avoid traveling to neighboring countries during the May Golden Week period, rather than going to Europe and America.
Due to the financial reporting season, multiple luxury brands have exaggerated the growth of Japanese luxury shopping malls in their performance reports.
LVMH Group, the parent company of Louis Vuitton and Dior, saw a 2% increase in sales in the first quarter, while Asia Pacific malls outside of Japan saw a 6% increase, while Japanese malls saw a 32% increase. Zheyun Group’s sales in Asia Pacific shopping malls, North American shopping malls, and Western European shopping malls that have been removed from Japan have increased by 19%, 11%, and 9%, respectively. The sales volume in Japanese shopping malls increased by 16%.
These brands did not mention in their financial reports that the increase in Japanese shopping malls is partly due to the rise in selling prices due to the appreciation of the currency, and on the other hand, a large number of tourists went to Japan to buy luxury goods due to the expansion of the price difference. Although the proportion of tourists from various countries consuming in Japan has not been disclosed, LVMH Group stated that the proportion of Chinese consumers consuming goods in the first quarter increased to 37%.
According to data from the Japan Travel Agency, the total consumption of tourists visiting Japan in the first quarter of 2024 reached 1.75 trillion yen (approximately RMB 81.9 billion), setting a new historical high for a single quarter. In March, the number of tourists visiting Japan exceeded 3 million for the first time, reaching the highest level in a single month’s history.
The wave of tourists going to Japan to buy luxury goods due to the spread caused by exchange rates has been ongoing for quite some time.
The Japanese yen exchange rate hit a new low in July 2022, and Japan officially resumed its domestic team tours on June 10, 2022 to avoid entry testing and cut-off. Group travelers from Hong Kong, China and the United States were the main consumers. After two years of silence due to the pandemic, many Japanese proxy buyers have once again become dull.
Due to the limited number of products in luxury brand specialty stores, many travelers choose to go to second-hand antique stores to buy goods. According to the CCTV Finance Channel, 30% to 40% of domestic visitors to second-hand jewelry stores in the Ueno commercial district. And merchants have a strong desire to buy second-hand jewelry, with generous discounts.
In response to the trend of booming luxury goods sales, many luxury brands have increased their presence in Japanese shopping malls in recent years.
Against the backdrop of the overall increase in store prices caused by the epidemic in Japan, individual luxury brands are taking advantage of their stores in key urban commercial districts such as Tokyo and Osaka. Louis Vuitton’s flagship stores in Ginza, Tokyo and Osaka were closed in 2021, while Balenciaga recently lost its first flagship store in Ginza.
And the marketing targeting Chinese tourists is also not forgotten. Ginza Six, a luxury shopping hub located in Ginza, Tokyo, has recently officially opened a popular Little Red Book account, with the first one receiving up to 400 criticisms and 1400 likes. Earlier, Zishutang no longer promoted a small French style called “Observing Japan” and announced Japanese civilization, snacks, and travel information to Chinese tourists.

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The effectiveness of emotional skincare strategy is evident. In the first quarter of Yurong Day, various channels have innovated and developed

On the evening of April 29th, Meirenli Makeup (605136. SH) collar cloth reported its achievements in the first quarter of 2024. According to the complaint, in the first quarter of 2024, the company realized a business revenue of 472 million yuan. Looking at the overall situation, by promoting high-quality growth of self owned brands, continuously improving inventory structure, and optimizing overall financial governance, the quality and efficiency of beauty and makeup operations have steadily improved, and resilience has become prominent.


Among them, self owned brands represented by Yurong Chu have maintained healthy growth, while the company’s growth strategy of focusing on emotional skincare and streamlined skincare has lost strong evidence. In addition, through perfect financial governance, the ending inventory balance of Beauty Makeup has continued to decline and its structure has been continuously optimized. According to the data, the inventory cost at the end of the first quarter of 2024 increased by 18.94%, and the loss of property added value provisioned in the first three months increased significantly compared to the same period last year. The overall operational quality of the company continues to improve.
Meiren Beauty Action is a leading domestic cosmetics development and wholesale service provider, actively providing changes in the industry, exploring new growth trends, starting from research and renovation, mall structure, and maintaining growth. Focusing on emotional skincare and streamlined skincare, the company accelerates the renovation and iteration of its own brands such as Yurong Chu and Meiyitang, and strives to discover more products with strong research and development capabilities and high product quality for Chinese consumers, as well as multi-point structured “emotional+beautiful” consumer malls.
The effectiveness of emotional skincare strategy disappears, and various channels of Yurong are undergoing renovation and growth
During the complaint period, Yurong Chu stopped at the emotional skincare track and maintained a new brand strategy of promoting new brands, products, and channels. On the product side, based on market reactions and the latest research results of the R&D team, Yurong Chu has stopped cutting the entire product matrix and has successively launched star single products in multiple categories such as saffron Yinghua oil, dual phase Yinghua, oil applied point film, point cream, lip gloss, etc; On the channel side, Yurongchu has opened private stores in many online channels, such as Tomorrow Cat, Tiktok, Little Red Books, and WeChat, and has reached consumers through offline scenes such as Joyce Beauty and CiE beauty refurbishment shop; On the brand side, Yurong Chu has reorganized its brand positioning, focusing on emotional sensitive groups, advocating for a new Chinese style skincare metaphysics, and providing a comprehensive treatment plan for emotional allergic and emotional skin groups with products that are more suitable for Chinese consumers.
With the leading force in research and development, product strength, brand strength, and other aspects, as well as precise marketing essence and multi-channel communication strategy, Yurong Chu successfully closed the mall, achieving a dual promotion of sales quality and sound quality. Among them, the founder of the brand, Mr. Huang Tao, for the first time, lured users to share and discuss through a video account live broadcast. During the live broadcast, there were over 2000 criticisms and over 10000 likes, which not only closed new channels but also strengthened consumer awareness of the Yurongchu brand; Through daily broadcast and several KOLs, the popular single product of saffron Yinghua Oil has been planted grass on the Tiktok platform, making it onto the top list of Tiktok Timing Yinghua Oil; On the Xiaohongshu platform, Yurongchu participated in the “Everyone’s Spring Festival Gala” collaboration, with a GMV exceeding one million in just 30 days and a brand exposure quality of up to 5 million. Famous artist Wu Qianyu was also invited to the Xiaohongshu live broadcast room to share and recite emotional clearing novels, helping Yurongchu make it to the top of the brand list, with a single live broadcast exposure of over 3.2 million.
At present, the self owned brand strategy of Beauty Beauty has achieved phased results, and the successful history of the self owned brand will also provide a self created history for future incubation. The company will continue to promote brand renovation and iteration, focusing on emotional skincare, providing consumers with a happy skincare experience, and fundamentally improving the condition of emotional skin.
Steady improvement in operational quality and efficiency, holding absolute profits and actively repaying investors
Always striving for excellence, Beauty Makeup aims to empower efficient operations with technology, continuously increasing support for cutting-edge technologies such as advanced information systems and artificial intelligence, and providing strong support for the stable growth of the company. During this period, the company actively promoted the growth of intelligent and efficient operations, improved governance effectiveness, and improved the quality of resolution plans.
During the complaint period, through a perfect financial governance system and standard financial governance process, the scope and structure of beauty and beauty inventory have been continuously improved, and multiple financial data have lost promotion and optimization. According to the data, the ending inventory balance of Meiren Beauty cosmetics continued to decline and the structure was continuously optimized. The inventory cost at the end of the first quarter increased by 18.94%, and the provision of property value-added income in the first three months increased significantly compared to the same period last year. Other payables increased by 120 million yuan compared to the same period last year. The net operating cash flow turned positive from negative, and the overall operational quality of the company continued to improve.
In addition, the company actively responds to the “National Ninth Article” promotion by increasing the mid-term share of 2024 to better repay investors. Not yet, Beauty Beauty will adapt to the growth trend of shopping malls. Based on the actual situation, we will actively promote the restoration of suspicious information and digital systems, steadily promote the restoration of financial shared central modules such as capital governance and expenditure management, and further assist in business growth and governance effectiveness improvement.
The National Development and Reform Commission pointed out that in the first quarter of this year, the overall national economy surpassed the upward trend since last year, fulfilled the good situation, and laid a solid foundation for achieving the annual growth goal. With the trend of domestic consumption continuing to grow steadily, it is doubted that Beauty Makeup can rely on the potential and scope accumulated before, while empowering mutual aid brands to increase certainty, continuously expanding the market share of its own brand, creating a stable and healthy business form, and launching the company’s business to achieve high-quality growth.

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