Australian sun care line Naked Sundays is gearing up for international expansion.

On July 14, it will debut on Ulta Beauty’s website, and will launch into 800 Ulta Beauty stores in March 2025. The brand is postponing its US brick-and-mortar rollout until next spring so that it can be present for a full summer season for its debut.

Founder Samantha Brett said she was always very sure that the US would be a key market for the brand, and even went to the extent of formulating all the products to meet US requirements for sunscreen — some sun protection filters that are allowed in Australia and the EU are not permitted in the US. It launched into 1,200 Shoppers Drug Mart stores in Canada in June, and over 900 US Target stores at the end of February.

“I always said I wanted to be an international brand and not exclude any markets. I had this idea to make sunscreen accessible and fun and easy to use for everyone, especially younger people that hated sunscreen,” said Brett. Naked Sundays offers unconventional sun protection products such as lip oils, tinted serums and products with iridescent or light-reflecting qualities.

Brett said Naked Sundays was introduced to Ulta Beauty through its Australian retailer, Mecca, and she believes the brand’s format innovation will appeal to US customers. Naked Sundays launches around ten products per year, all with a sun protection factor of 50.

“[We offer products] that are super fun, cool, sexy and good for your skin,” she said.

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What’s Hot in Sunscreen Now

Years into SPF’s beauty-fuelled reinvention, new trends are still emerging, from the growing popularity of foreign formulas to innovations in texture.

From sunscreen to bronzer, classic beauty staples see a seasonal boost each summer. But thanks to product format innovations like sticks and sprays, as well as the impact of influencers such as Alix Earle and Katie Fang, summer-oriented products are evolving. With so many different brands competing in sunscreen, search results are yielding clear trends for SPF in terms of active ingredients. The same can be said of bronzer and tanning products, which are seeing growth this summer. And fragrance continues to be a strong spot not just for brands, but also for consumers, thanks to the ongoing popularity of sweet and tropical scents.

Sugary, Sweet Scents Reign Supreme

There is no denying that Sol de Janeiro has benefited from tweens and teens’ enduring love of sugary and coconut-scented body sprays. Now, competing fragrance labels spanning from masstige to premium and luxury are turning to the sweeter side.

Based on data from consumer data aggregator Spate, Google searches for the “gourmand” fragrance category grew by 77.5 percent year-over-year for the 12 months ending in May 2024, led by notes such as vanilla and caramel. Sol de Janeiro is likely a big part of this: its cult Cheirosa 62 Perfume Mist emphasises its caramel and pistachio notes. “Caramel” fragrance searches surged 78.2 percent year-over-year, and vanilla notes were a top trend for luxury perfume launches in 2023, according to Fragrances of the World’s annual report. This year, vanilla continues to be popular: Kayali has seen growth in searches for its signature vanilla scent Vanilla 28, according to Spate, as does Phlur for its Vanilla Skin line of fragrance products.

Demand for beachy and tropical fragrance notes like coconut is also a trend not limited to Sol de Janeiro. Coconut fragrance searches have grown 43 percent year-over-year, per Spate data. Fragrance influencers have propped up the #islandgirl hashtag on TikTok – which has 1.4 billion views – and have been recommending tropical-themed scents such as Ellis Brooklyn’s Miami Nectar, Ouai’s St. Barts and Snif’s Coco Shimmy.

Fragrance Comes For Hair Care

Ouai’s May 2024 launch of its St. Barts spray points to the rise of another scent-led trend for summer: hair fragrance. Hair fragrance searches are up 16.1 percent year-over-year, according to Spate, with Gisou’s fragrance dominating on TikTok. This comes as launches of specific hair perfumes increase, as well as debuts of multi-purpose scented sprays categorised for both hair and body by brands such as Rare Beauty.

With a growing number of TikTok hairfluencers encouraging their followers to go without washing their hair for a week at a time, the rise of hair fragrance is part of a launch strategy by haircare brands to offer more products for unwashed hair in between blowouts. So far, hair fragrance has shown more growth potential than dry shampoo, a category with a deluge of launches in the past year. (According to Spate, dry shampoo searches last peaked in October 2022, due to a report about dry shampoo in spray bottles containing the carcinogen benzene. The category has declined 66.3 percent year-over-year since then.) One exception has been K18′s new AirWash Dry Shampoo, which sold out after tapping into the hair scent trend through videos with Earle discussing its odour-fixing properties.

Legal or Not, Chemical Sunscreens Win

Thanks to the virality of French pharmacy and K-beauty trends on social media, international sunscreens are having a moment, with Google searches for chemical sunscreen brands outpacing mineral options. While French pharmacy brands can often be found at US drugstores and retailers, consumers are also seeking out harder-to-find K-beauty labels with ingredients not yet legal in the US.

According to Spate’s ranking of the brands with the fastest-growing sunscreen searches through May, L’Oréal-owned La Roche-Posay dominates after seeing viral success on TikTok. The TikTok K-beauty wave is also driving sunscreen interest, as three of the five brands are Korean: Beauty of Joseon, Innisfree and Tocobo. Bemotrizinol, the active ingredient in Beauty of Joseon sunscreen as well as many other K-beauty brands, is also seeing a surge of interest in the US as Google reported that searches for the ingredient were at an all-time high in May. The ingredient is not approved for use in the US, but searches for the ingredient have been on the rise after Dieux co-foudner Charlotte Palermino and US Representative Alexandria Ocasio-Cortez have been calling for its legalisation. Influencers are a big driver of sunscreen trends, and influencer marketing platform LTK said that the searches for the sunscreen category are up 168 percent in the past 90 days on its platform.

Success of the Spritz

When Tower 28′s five-year-old SOS Spray containing hypochlorous acid went viral on TikTok last year, it was the start of a new obsession with face sprays of all kinds.

In skincare, mist and spray products saw 24 percent year-over-year growth in searches in the first quarter of 2024, according to Spate. The Tower 28 effect is apparent. According to the brand, one is sold every 15 seconds, and the search term “hypochlorous acid spray for face” more than doubled in May, according to Google’s weekly trends report. Recently, a growing number of independent beauty labels such as Prequel, Peace Out and Magic Molecule have launched their own hypochlorous acid sprays, which are marketed to combat acne.

It’s not just one buzzy ingredient driving the spray craze: Kosas’ probiotic spray – another Fang get-ready-with-me favourite – is listed under Sephora’s bestsellers category.

In the makeup category, setting spray is seeing an even faster rise than skincare sprays with 27.8 percent growth in first-quarter searches. Viral TikTok setting sprays such as Patrick Starrr’s One/Size On ‘Til Dawn Mattifying Waterproof Setting Spray and Charlotte Tilbury Airbrush Flawless Setting Spray are both listed as Sephora bestsellers.

Bringing Bronzer Back

Brands have been working to encourage a resurgence of all the beauty trends of the 2000s, and self-tanning and bronze faces are no exceptions. Paris Hilton and Miley Cyrus have both partnered with self-tanning startups, Tan-Luxe and Dolce Glow, and influencers are helping boost the category: LTK said self-tanner is a top-searched topic on its platform with 41 percent growth in the past week.

Searches for bronzer, meanwhile, are up 120 percent in the past week. For the face, the all-over-bronzer look that took hold in the early aughts started last year, thanks to Drunk Elephant’s viral D-Bronzi™ Anti-Pollution Bronzing Drops. Since influencers like Fang helped the drops take off, over a dozen brands have launched their own versions, such as Glow Recipe, Innbeauty and Saie. But many of these launches could be too late; Spate reports that searches for bronzing drop have declined in 2024, while face bronzer sticks, however, are seeing 14.7 percent year-over-year growth.

“We’ve seen an explosion of launches, and none of them are catching on quite as much as Drunk Elephant,” said Addison Cain, beauty strategy and innovation manager at Spate, of bronzer drops. “There’s just something to say about being the first mover on a trend.”

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Ultra-fast-fashion giant Shein said it will invest €250 million ($271 million) in British and European designers and circularity initiatives over the next five years as it seeks to manage a regulatory crackdown targeting “fast fashion” and drum up support for a potential IPO in London.

The disruptive Singapore-based e-tailer said Tuesday that it plans to launch a €200 million circularity fund focused on textile-to-textile recycling and related innovations, inviting other businesses and financial institutions to co-invest. Shein said it will set aside another €50 million to help fashion businesses in the UK and EU join its marketplace and support its Shein X incubator programme, which connects emerging designers to the company’s supply chain, in the region.

The moves form part of the company’s efforts to address criticisms and controversies that have dogged its ambitions to go public and made it the focus of regulatory scrutiny that could stunt future growth prospects.

The company reportedly filed confidential papers with Britain’s market regulators for a London listing in June. It has declined to comment on its plans.

Founded in Nanjing, China, in 2012, Shein is now one of the world’s most popular clothing brands, a rise that has been fuelled by a pioneering and hyper-efficient test-and-learn manufacturing model that allows it to produce a dizzying assortment of new styles in small batches and sell them at rock bottom prices. Gross merchandise value, a measure of the value of sold goods on its website, reportedly reached around $45 billion in 2023. Its London IPO could be one of the largest stock offerings globally this year.

Escalating tensions between the United States and China, where most of the company’s manufacturing still takes place, disrupted previous plans to list in New York. And its fast-paced, low-cost business model has made it a regulatory lightning rod. The company has attracted a barrage of criticism over issues including its supply-chain labour practices, product safety, copyright infringement and environmental impact.

In Europe, which has been moving to protect local producers from the flow of cheaper Chinese goods and address criticism that new green rules disadvantage businesses operating in the trading bloc, the company is seen as a key target of proposed and incoming regulations that take aim at fast fashion. These include moves to address a loophole which allows foreign companies like Shein, that ship low-value parcels direct to consumers, to sidestep import duties and higher fees for fashion retailers that produce large volumes of clothes.

“Compliance and circularity are the priorities I wake up with,” Shein executive chairman Donald Tang said, adding that the company prefers to style its business as “on demand” fashion, rather than “fast fashion.”

Though the e-tailer produces many styles, each one is manufactured in small quantities that are only increased if there’s clear demand, avoiding the wasteful overproduction associated with many established mass market rivals, according to Tang. With its circularity fund, Shein said it is moving to take more responsibility for what happens to clothes at the end of their life — a trickier challenge for a company that has been blamed for fuelling overconsumption.

While the €200 million fund represents a tiny fraction of the profits in excess of $2 billion that the company reportedly generated last year, Shein said it can have a bigger impact by leveraging its size and scale to support innovators through things like offtake contracts or other commercial arrangements.

Tang said he has spent the last few weeks talking with the venture community and fund managers to “very, very enthusiastic feedback.” Still, establishing the mechanics of the fund, including putting someone in place to oversee it, is still in progress.

“The tradition and hallmark of Shein is waste reduction,” said Tang. “This is the beginning of the effort.”

🇨🇱 Chilean retail giant Parque Arauco acquires Colombia’s Parque Alegra. The Santiago-based firm, whose shopping malls in Chile, Peru and Colombia house retailers like Gucci and Guess, has completed its ownership of the Colombian mall through a local subsidiary, acquiring the remaining stake from Colvalor Propiedades Colombianas. “Taking full control of Parque Alegra [in the city of Barranquilla] reaffirms our commitment to growth in Colombia, after the significant steps taken in recent months including the increased ownership stakes in Titán Plaza [in Bogotá] and Parque Fabricato [in Medellín],” said Diego Bermúdez, CEO of Parque Arauco’s Colombia division. Home to brands like H&M and Pandora, Parque Alegra is now one of Parque Arauco’s seven malls across the country. [Business Wire]

🇮🇳 Reliance is reportedly preparing to launch Shein in India. Reliance Retail Ventures, the retail arm of oil-to-telecoms conglomerate Reliance Industries, is planning to sell products from the ultra-fast fashion giant on its app and offline stores, according to “multiple executives aware of the developments,” speaking to the ET. An imminent launch would come a year after the partnership was reportedly struck between the two firms, and four years after India banned Shein and other apps originating in China from operating in the country over border disputes. A deal could also help Shein reduce dependence on China by scaling up sourcing from India. Reliance, a leading player in India’s fashion industry, recently struck a deal with Britain’s fashion e-tailer Asos. [Economic Times]

🇨🇳 Uighur group wins UK appeal over forced labour in Chinese cotton. A British court of appeal has ruled that the UK National Crime Agency’s decision not to launch an investigation into the importation of cotton products believed to be manufactured by Uighur and other Turkic Muslim people through forced labour in China’s Xinjiang province was unlawful. The appellants, the Global Legal Action Network and the World Uyghur Congress, said that their win could lead to UK retailers being prosecuted under the Proceeds of Crime Act if imported products are found to be made through forced labour. [Sourcing Journal]

🇦🇺 Australian regulators ban Honey Birdette’s “sexually suggestive” advert. The Ad Standards Community Panel has forced the upmarket Sydney-based lingerie brand co-founded in 2006 by Eloise Monaghan to remove an advert from a store window after a customer complained that it exposed too much of one of the model’s genital regions. This isn’t the first time the brand has faced opposition from the organisation over ads deemed too racy or explicit, with local media reporting in 2018 that its adverts had already been banned over a dozen times. [Ragtrader]

🇮🇳 India’s Baba Ramdev claims a cartel wants to “destroy” his firm. The popular and controversial Indian yoga guru and founder of Patanjali Ayurved, an ayuverda consumer goods company based on India’s ancient philosophy of holistic healing which sells skincare, personal care and food products, has said that a group of ‘anti-ayuverda’ companies, politicians and intellectuals seek to damage his company’s reputation. India’s Supreme Court has previously banned ads for the firm’s medicinal products claiming to cure cancer. In 2021, the government intervened over herbal tablets claiming to cure Covid-19 and in 2022 the Indian Medical Association took the firm to court over products claiming to cure diabetes. [Economic Times, BBC, BoF]

🇨🇳 EU may close off duty exemption that aids China’s Shein and Temu. The European Union is working on a proposal to impose import duties on cheap goods bought from online platforms outside the bloc, a move that would impact all non-EU e-commerce platforms but primarily targets China-founded firms Temu, AliExpress and Shein, according to people familiar with the matter. The EU currently has a €150 ($161) duty-free de minimis threshold for online purchases which has enabled a surge in small-value imports from those platforms. The move follows the EU’s recent toughening of tech compliance requirements for the platforms. [BoF]

🇿🇦 South Africa’s Rich Mnisi wins top award at Africa Fashion Up. The competition founded by Share Africa, a platform supported by Balenciaga and Galeries Lafayette, named Mnisi the “Best Designer Africa” for the latest edition at a ceremony in Paris last month. Founded in 2021 by Valérie Ka, the contest’s other 2024 prize winners included Niuku founder Kadiata Diallo from Senegal and Mauritania; Gugu Peteni, the South African founder of Gugu by Gugu; and Mohamed Youss, founder of Anouri, from Morocco and Kader Diaby, from Côte d’Ivoire, founder of Olooh. [Africa News Agency, Semafor]

🇮🇳 Indian watch and jewellery giant Titan reports 9 percent revenue growth. The Tata Group-owned firm, whose portfolio includes its namesake brand alongside Tanishq, Zoya, Mia and CaratLane, posted 9 percent growth in the first quarter ended June 2024. It added 61 stores during the period, bringing its combined retail network presence to 3,096, amid a domestic and international expansion drive across the US, Middle East and Southeast Asia. [Economic Times]

🇯🇵 Japanese beauty giant Shiseido wins Max Mara fragrance license. The Tokyo-based conglomerate will develop, produce and manufacture fragrances for Max Mara, which has not sold perfume since it discontinued a line of scents launched in the mid-2000s. Shiseido has several fragrance licensing deals with fashion houses, including Narciso Rodriguez, Issey Miyake and Tory Burch. [BoF]

🇮🇳 India’s Malabar Gold & Diamonds accelerates UK expansion. The jeweller has opened a store in the city of Leicester, following its debut in London’s Upton Park district. The Kozhikode-based company, which operates 350 stores across 13 countries, said it plans to strengthen its footprint in existing markets in Europe, the Middle East and North America, and enter new countries in Africa, Asia and Oceania. In the UK, “we have…immediate openings planned in Southall and Wembley in London, as well as Birmingham and Manchester,” said Shamlal Ahamed, MD of international operations. [Economic Times]

🇹🇭 Thai textile leader calls for companies to innovate to aid recovery. “It is time for us to take … a new direction, with a different focus … towards more creativity and technology,” said Setthapong Srisuphonvanij, president of the Thai Textile Merchant Association, at last month’s GFT Expo trade show in Bangkok, referring to the need for more Thai sourcing partners of global fashion companies to provide “specialty textiles to meet consumer needs.” Thailand’s apparel and textile exports decreased from $6.85 billion to $6.03 billion between 2022 and 2023. [Sourcing Journal]

🇮🇳 India’s Kalyan Jewellers plans US debut by Diwali. The Thrissur-based company whose portfolio includes its namesake brand and digital-first brand Candere has said that part of its plan to launch over 130 new stores during the current financial year will include its first in the US by Diwali, which falls on 1 November. The firm currently operates more than 270 stores across India, the UAE, Qatar, Kuwait and Oman. [Economic Times]

🇨🇳 Chanel chooses Hangzhou for its next Métiers d’Art show location. The French luxury brand will showcase its collection featuring the house’s special artisanal skills, on December 3 in the Chinese city, an historic centre of the global silk trade. Hangzhou’s Métiers d’Art show will follow those in Manchester, UK and Dakar, Senegal. Chanel presented a repeat cruise show in Shenzhen, China last year. [Jing Daily]

🇰🇷 LVMH-owned jeweller Fred names Jin from BTS as brand ambassador. The brand has tapped the South Korean singer and member of K-pop boyband BTS, which has been on hiatus while the band members complete mandatory military service. Jin, who has over 48 million followers on Instagram, was the first to be discharged last month. [Billboard Philippines]

🇨🇳 Gucci taps Chinese actor Zhang Linghe as brand ambassador. The Italian luxury brand has partnered with the star of TV series including “Story of Kunning Palace” and “Sparkle Love,” who has nearly 10 million followers on Weibo, to endorse its products. [Dscene]

At a recent Singapore retail convention, an Australian financier recounted how his wife spent her time on a trip to Tokyo. Speaking privately on the sidelines of the event, he revealed that she didn’t spend a single minute sightseeing in the city because she was laser-focused on buying a haul of luxury goods. By taking advantage of highly favourable exchange rates, she found that it was cheaper to purchase a plane ticket from Melbourne to Tokyo and buy the items from major French houses in Japan than it was to shop at the brands’ Australian boutiques.

With the Japanese yen continuing to plummet against major currencies — last week it dropped to its lowest level since 1986 against the US dollar — shopping sprees like this have become increasingly common. Wealthy and aspirational consumers from around the world have been flocking to the Japanese capital as the yen hit multi-year lows against the euro, the Australian dollar and the Chinese yuan.

“Top luxury brands, especially in the Ginza district [of Tokyo] and department store shop-in-shops, are performing exceptionally well,” said Maiko Shibata, head buyer and creative director at Japanese multi-brand boutique Restir, which sells an edit of products from both big brands like Balenciaga, Valentino and Burberry and niche names including Marine Serre, Sacai and Maison Mihara Yasuhiro.

“There’s a trend among wealthy shoppers, [both tourists and locals], to spend money on very rare, hard-to-get products, or limited-edition items such as Hermès and The Row Margaux [bags]. We even have a word [in Japanese to describe them] called ‘her-pat,’ [a codename for those who shop enthusiastically as if they’re on ‘Hermès patrol’ and] post their trophy items on social media,” she added.

The boom is motivating luxury brands like Hermès, Tiffany & Co and Balenciaga to boost their operations in the country, expand their retail footprint or accelerate existing expansion plans. Hermès, which posted a 25 percent sales jump in Japan for the first quarter, opened its second location in Ginza last month at the Mitsukoshi department store, following its Azabudai Hills store launch in February. In April, Balenciaga opened a three-level flagship store in Ginza, bringing its Japanese store count to 37.

There has also been an influx of emerging jewellery and accessible luxury brands into the country, with Gemmyo, Ganni, Studio Nicholson and Polene entering or opening their first stores in the last year.

“[Other] luxury brands are investing more in their presence in Japan by modernising stores and enhancing their digital infrastructure,” said Federica Levato, senior partner and a regional leader of fashion and luxury at consultancy Bain & Company. “[In addition to] personalised customer experiences and exclusive events to engage wealthy local clients, [they] are also revamping interest in exclusive partnerships with local craftsmanship and creativity to increase cultural relevance.”

Some of the industry’s biggest players have been duly rewarded. French luxury conglomerate LVMH reported a 32 percent sales surge in Japan in the first quarter, the highest growth rate among regions. Kering posted revenue Q1 growth of 16 percent and Prada Group’s retail sales in the country were up 46 percent, which the company said was “sustained by local consumption and increasingly by tourists”. Meanwhile, Richemont saw sales surge 20 percent at constant exchange rates in Japan in the year ended March.

Factors driving the sales boom

In stark contrast to the slowdown in the Chinese market, Japan’s luxury sector has been experiencing a substantial and sustained increase in sales since last year driven in part by international tourists — including Chinese and many other nationalities.

“Luxury retailers in Japan have undergone a period of strong acceleration in 2023 and [have remained] on a positive trajectory over the first months of 2024,” said Levato. “The market has seen robust growth, driven by solid demand on behalf of locals and an increase of tourist inflows, partially attracted by the weak local currency.”

The Bain analyst said the value of the Japanese luxury market was at 29 billion euros ($31 billion) last year, up 27 percent year-on-year at constant exchange rates.

According to the Japan Department Stores Association, duty-free sales by visiting foreign nationals marked a record high for the third consecutive month in May, more than tripling year on year to 71.8 billion yen ($450.7 million), driven by the surge in international tourists purchasing luxury goods. It marked the 27th consecutive month of overall sales growth across department stores.

Department store giant Takashimaya confirmed in its 2024 financial statement that “inbound net sales were favourable on luxury brands and other high-ticket items as sales were propelled by an increase in per-customer sales due to yen depreciation.”

The luxury department store chain, which has branches offering tax refund counters in Greater Tokyo and Osaka and in at least one branch in Kyoto, Nagoya, Okayama, Gifu and other cities around the country, is popular among international tourists, many of whom travel to Japan for a combination of sightseeing and shopping.

“Once lagging in innovation, [Japanese] department stores have now become better at capturing new trends and consumer desires, although this remains an area needing further improvement to attract younger customers,” said Levato.

An example of this is Seibu & Sogo Co which is reconfiguring its Seibu Ikebukuro main store in Tokyo under a theme it dubbed “inclusion” which will move away from the traditional segregation of men’s and women’s sections and welcome all customers in “unifying spaces where friends, couples, and families can shop and enjoy time together.”

How reliant is Japan on Chinese shoppers?

Japan recorded more than 3 million visitors for a third straight month in May, according to the Japan National Tourism Organisation (JNTO). Arrivals during the month were up 60 percent year on year and 9.6 percent compared to 2019.

The JNTO noted that Chinese travellers accounted for 16 percent of tourists and 20 percent of overall tourism spending in the first quarter of the year, which is still about 30 percent lower than pre-pandemic levels.

However, overall spending on products that tourists typically claim tax refunds — such as luxury goods — are up on pre-pandemic levels, according to data from a report by Global Blue. Despite fewer trips in 2023 compared to 2019, the average amount of tax-free spending by Chinese visitors in Japan was more than double that of 2019, marking a 117 percent increase.

“Mainland Chinese tourists and currency depreciation are key levers. However, there is also strong inbound tourism from South Korea, the US and Hong Kong SAR,” Daniel Zipser, McKinsey & Company’s senior partner and leader of the consultancy’s consumer and retail work in Asia. “Japan has taken the lead as the top destination for South Korean travellers due to the favourable exchange rate.”

According to JNTO, South Korea had the highest number of foreign visitors to Japan in April at 661,200, followed by China at 533,600, and Taiwan at 459,700. Both Hong Kong- and Taiwan-based consumers have been travelling and spending abroad enthusiastically as markets such as Japan and Europe offer retail prices on luxury goods that are significantly cheaper after currency exchanges and tax rebates, according to the latest annual report by Dickson Concepts.

“The local market is also growing,” said Zipser, citing research by NRI showing that “the total number of wealthy and ultra-wealthy [Japanese] households in 2021 increased by 158,000 households from 1.327 million households in 2019, the highest number since the estimate began in 2005.”

EY’s Asia-Pacific strategy execution leader Nobuko Kobayashi said that “while [foreign] visitors account for one-third of sales in major luxury brands [in Japan] according to the FT, Japanese locals show resilience in supporting the post-Covid luxury market in the country, particularly since [outbound] overseas travel appetite wanes in the face of yen depreciation,” citing figures from Morgan Stanley’s luxury analyst Edouard Aubin in the Financial Times.

Levato echoes that sentiment. “Domestic spending on luxury goods in Japan remains sound, particularly among wealthier Gen X consumers less impacted by general macroeconomic pressures,” she said. “Yet, aspirational customers started to resent inflationary pressures more recently, and brands are still facing harder times in capturing a younger customer base.”

Shibata suggests that recent price hikes by European luxury brands have disproportionately impacted the Japan market in the current economic cycle of a weak yen, leading to an increase in sales revenue for some retailers, despite a slight decrease in the number of units sold.

“Prior to Covid-19, or when exchange rates were more favourable [to Japanese customers], they readily spent money on new and emerging brands. Now, with the weak yen, [locals] think carefully before shopping and only buy if they believe they won’t regret it,” said Shibata.

Another reason for caution among some locals is that they “may be tired of the rapid fashion cycle and obvious marketing,” she conceded. “They [hesitate to purchase because they] simply want to make the right decision.”

How long will the boom last?

Hirofumi Suzuki, chief foreign exchange strategist at Sumitomo Mitsui Banking, recently told The Japan Times that if there are no major changes in monetary policy, the yen will continue to weaken. But the near-term course the Japanese government will take with fiscal policy remains shrouded in conjecture at the time of writing.

Finance minister Shunichi Suzuki commented on July 2 that currency moves were being watched vigilantly, but analysts speaking to Reuters observed an absence of any usual reference to the government being “ready to act” to support the yen’s recovery.

Levato said that while the recent boom driven by the weak yen and tourism may normalise, positive signals from the local customer base suggest that the market is well-positioned for future growth.

“The key for brands to continue growing will be increasing relevance toward local consumers, capturing younger generations and innovating to respond to changing consumer trends and market dynamics [such as]... weakening macroeconomics...impacting confidence in recent months, with consequences hitting the aspirational segment.”