JAPAN. Japanese downtown tax free retailer Laox is launching an online-to-offline (O2O) campaign that includes a first-of-its-kind partnership with Alibaba and Alipay, reports Jing Daily*, a content partner of The Moodie Davitt Report.
Laox’s aim is to simplify the tourist shopping experience for Chinese travellers. They will be able to order products through Alibaba’s online travel agency Fliggy up to a month in advance, make a tax free payment via Alipay, and then pick them up at one of Laox’s 38 locations in Japan by showing their Alipay transaction and passport.
The company also has an e-commerce shop on the Chinese home goods retailer Suning’s website (Suning acquired Laox in 2009).
“Making the shopping experience more convenient sounds like a smart plan at a time when Chinese travellers are more interested in seeing the sights and experiencing local culture than spending time in a shopping centre,” Jing Daily commented.
“This doesn’t mean that those same travellers aren’t interested in buying a few things, such as Japanese electronics, watches, and cosmetics, particularly when it won’t hinder their ability to partake in all the activities they have planned.”
Laox is planning to enhance its product offerings for O2O sales in a bid to boost overall revenue from Chinese tourists. The retailer currently offers about 100 products, including cosmetics, skincare and small appliances, on the O2O marketplace, but it plans to offer more than 5,000.
The company hopes the new sales strategy will reverse a downward trend that began in July 2018, Jing Daily said. “[Laox] has yet to benefit from Japan’s relaxed tax-free shopping initiative that went into effect last summer, particularly as the policy relates to cosmetics that remain popular among Chinese tourists.”
Overall sales at Japan’s duty free shops totalled US$235 million (¥26.2 billion) in January, a year-on-year decline of 7.7% and the first in 26 months. This was despite a 19.3% year-on-year increase in Chinese arrivals.
The Jing Daily report speculates whether China’s new e-commerce law is to blame, or whether there are other factors. To read the full report and to subscribe to Jing Daily, click here.
*This article was originally published by the much-respected JING DAILY, a Moodie Davitt Report content partner.