Japan’s leather and luxury retail market is facing increasing pressure from inflation, labor shortages and a sharp decline in Chinese tourism, according to a new report published by Alliance France Cuir. Despite these challenges, the report said demand for French leather craftsmanship remains strong in the Japanese market.
Japan is currently the 4th largest export market for the French leather industry. However, the country is going through major economic and demographic changes, including a weakening yen, rising import costs and an aging population.
The report said tensions with China have reduced Chinese tourism to Japan by 60% since late 2025. Chinese tourists are considered key luxury consumers in Japan and the decline could lead to a potential $9.6 billion loss in tourism spending during 2026, according to projections by China Trading Desk.
Japanese department stores have already started feeling the impact. Takashimaya reported a 19% drop in tax-free sales earlier this year. Alliance France Cuir said many retailers are now redesigning stores and expanding food and lifestyle experiences to attract consumers.
The report also highlighted Tokyo’s Seibu Ikebukuro store, which reduced its retail floor space by one-third to focus more on food and gastronomy.
Despite the slowdown, French leather exports to Japan have increased significantly over the past 6 years. Japan imported €1.48 billion worth of French leather and leather products in 2025 compared to €406 million in 2019.
According to Alliance France Cuir’s economic observatory, the €1.48 billion exports included €1.3 billion in leather goods, €18.4 million in leather garments and €139.6 million in footwear.
French footwear brand J.M. Weston remains one of the strongest examples of success in Japan. The company entered the Japanese market in 1993 and now operates 15 stores in the country, representing 20% of its €55 million turnover.
Marc Durie, President of J.M. Weston, said to Alliance France Cuir that Japanese consumers are highly knowledgeable and place strong importance on craftsmanship, construction quality and materials.
The report also highlighted the rapid growth of Japan’s second-hand market. A study by Japan’s Ministry of Environment found that 44.1% of Japanese consumers buy second-hand products, while McKinsey estimated the country’s second-hand apparel and footwear market at $7.2 billion.
Alliance France Cuir also pointed to growing pressure on Japan’s leather manufacturing sector. The country’s weak yen has increased import costs, while labor shortages continue to affect businesses across industries.
According to Teikoku Databank, 60% of Japanese companies are struggling to recruit workers. Japan’s population has also declined from 128 million to 122 million over the past fifteen years, with around 30% of the population now aged above 65.
The report also highlighted the historical cultural challenges faced by Japan’s leather industry. Buddhist and Shinto beliefs historically associated leather work with animal carcasses, which contributed to the industry being socially marginalized for many years.
Japan’s leather industry currently includes around 130 tanneries, mainly concentrated in Himeji near Kyoto, with the automotive sector accounting for nearly 60% of leather demand in the country.
To know more, click here to read the original report on the Alliance France Cuir website.
Source: Alliance France Cuir
