The Loyalty System in Japan

Loyalty systems are very typical when shopping in Japan as they reward customers for purchasing products. Many companies in Japan have developed loyalty programs to increase customer retention and create an incentive for consumers to shop and purchase their products. Loyalty systems and programs in Japan are very similar to what credit card companies do in the US. Here in the US, if you have a credit card that gives out rewards and cash-back based on purchases, customers tend to use the card more as they receive points and cash-back towards future purchases. In Japan, many e-commerce sites and stores have their own loyalty systems that they have created to give customers cash-back not only toward their site, but toward other e-commerce and brick-and-mortar stores and sites as well. Rakuten Ichiba Rakuten Ichiba, Japan’s largest marketplace, has a very strong loyalty ecosystem called Rakuten Super Points that allows customers to receive a minimum of 1% back on all purchases. Many times, Rakuten will run promotions on 3%, 5%, or even sometimes 10% back on purchases made through their site. These points are not only redeemable on their site but can be used in convenience stores, travel sites, and banks. Becoming a member of Rakuten’s global network allows members to utilize all parts of the Rakuten Group’s services to earn points through their services. For example, Rakuten has a credit card called Rakuten Edy, where customers are able to earn points through purchases on the card. These points in turn can be redeemed through other Rakuten network services such as Rakuten Travel or Rakuten Ichiba. Convenience Stores Convenience stores in Japan are very...

China Imposes New Tax on Overseas Purchases

China’s Finance Ministry announced that they would be raising the tax currently imposed on foreign goods that e-commerce companies ship into China to help their economy with consumption instead of relying on investment and industry. The new tax is said to be implemented on April 8, 2016 and will cover not only commercially imported goods but personally imported goods as well. This means that goods sent to individual customers in China from overseas will also be subject to import taxes, tariffs, and consumption tax. For example, tariffs on watches ordered from abroad are to be increased to 60% from 30% and on jewelry to 15% from 10%. With the new tax law, the Chinese government is hoping to encourage its citizens to purchase domestically instead of purchasing overseas. According to Fortune.com, although Chinese shoppers account for a third of global sales of luxury goods, only a fifth of those sales where made in mainland China while the rest of the purchases were made abroad either though e-commerce or by Chinese tourists who smuggle products into China to sell. Luxury consumption in China fell 2% in 2015, even though purchases by Chinese consumers rose 251% in Japan, 31% in Europe and 33% in South Korea. Many Chinese consumers prefer to purchase products abroad as they are sure to be genuine compared to the products at home. Products such as maternity and baby products (ex. baby formula and diapers) are bought overseas for safety issues and Chinese consumers have shown that they are willing to pay more for products such as cosmetics, infant formula and other baby products. The question remains if these new taxes will...