Quality brings just rewards for Laox

Chinese tourists carry bags of purchased goods while leaving a Laox Co store in the Ginza district of Tokyo, Japan, Feb 16, 2015. [Photo/CFP]

Duty-free retailer enjoys rising customer numbers as made-in-Japan products appeal to Chinese wallets

Liu Yafang, a 35-year-old shopper from Shanghai, busily checks a list of items she has stored on her iPhone.

She's on the lookout for made-in-Japan home appliance products, and she couldn't be in a better place to find them: a Tokyo store owned by Laox Co Ltd, the country's largest duty-free retailer which offers goods ranging from electrical appliances to imported cosmetics.

Liu brought a huge suitcase from China and spent nearly 10,000 yuan ($1,610) very quickly with purchases including a rice cooker, a water heater and an electric tooth brush, packages of medicines, face masks and eye drops.

"Besides trusting the quality, the exchange rate of the Japanese yen against the Chinese yuan makes buying such a lot more affordable," said Liu, who joined a travel tour to Japan, and was transported directly from the airport to this duty-free haven.

The store she's in is Laox's 23rd and newest, opened in the city's Shinjuku district, arguably one of the world's most competitive shopping hubs.

Occupying the fifth to eighth floors of a mall, it's right above a store run by Burberry, the well-known British clothing brand.

It's decorated in bright whites and lights to make the area appear more spacious.

It's packed with customers, and most are tourists like her from China.

This is a dramatic turnaround in fortunes for the store brand first founded in 1930.

In 2008, Laox's then six outlets lost a combined 899 million yuan but last year it delivered revenue of 2.57 billion yuan, and a net profit of 64 million yuan－its first positive figures since 2001, and it now plans to expand to 50 stores.

The turnaround was caused by a change in ownership.

In 2009, Suning Commerce Group Co, China's leading electronics retailer, acquired a 27.4 percent stake in Laox for 57.3 million yuan, becoming its major shareholder. Suning has since increased its stake in the store to 65 percent.

Luo Yiwen, Laox's chief executive officer, said around 80 percent of its revenue now comes from Chinese customers, and its main focus of catering to this growing number of Chinese tourists will continue.