Credit card sales of Japanese Retailers Falling due to Koreans’ Boycott of Japanese Goods

Credit card sales of Japanese retailers and travel-related companies dropped sharply due to the spreading boycott of Japanese products and services among Koreans following Japan’s economic retaliation against Korea.

Sales of Japanese brands began to drop in the second week of July, a Korean credit card company said on July 29. Uniqlo's second-week sales fell 36.7 percent from the first week while those of Muji fell 33.4 percent. In addition, ABC Mart’s sales shrank 11.4 percent in the same period and sales of DHC (online), a Japanese cosmetics brand, plunged 55.3 percent.

However, Japanese convenience store brands suffered less damage. Ministop sales in the second week of July fell by 1.0 percent from the first week. "Since the portion of small payments is high at convenience stores, the boycott is having a small impact on Japanese convenience store brands," said an industry insider.

As the number of Korean tourists visiting Japan has dropped sharply, the amount of card payments by Korean tourists in Japan has also sharply decreased. In Okinawa, one of the most popular tourist attractions for Korean travelers, Korean travelers’ credit card spending shrank by 31.8 percent in the second week compared to the first week in July. In the same period, Osaka posted a 27.0 percent drop, followed by a 18.7 percent fall in Tokyo and 18.2 percent decrease in Fukuoka. Korean customers’ direct purchases through Japanese online shopping sites slid by 24.4 percent. Daimaru Department Store's Tenjin Branch in Fukuoka Prefecture suffered a 25 percent drop in sales by Korean shoppers in the past week from July 17. JTB, the largest travel agency in Japan, said that the number of Korean travelers who recently visited Japan declined by about 10 percent from the previous year.

A recent survey also confirmed the strong wave of Japan boycott. The Consumer Rights Forum and the C&I Consumer Research Institute conducted a survey on consumer participation in and awareness of the Japanese product boycott through Research and Research. The percentage of respondents who participated in the Japanese boycott campaign was 71.7 percent. The most boycotted Japanese goods were food (88.3 percent), clothing (86.5 percent), household goods (82.6 percent) and travel products (73.9 percent). About 90 percent of the respondents said that they were angry with Japanese behaviors. If the Japanese government scratches off Korea from its whitelist next month, it is highly likely to fuel Koreans’ Japan boycott movement, which is expected to affect domestic card companies' business results.