Public backlash in South Korea against Japanese products has dented some sales of beer and tour packages, and analysts say the boycott could spread to luxury cars and retailers as a trade spat between the two countries shows no sign of abating.
Sales of Japanese beer at South Korea’s convenience store chain CU have dropped 40 percent this month compared with last month, the JoongAng Ilbo said, citing unidentified industry sources.
If the report is true, Asahi Group Holdings Ltd, which is the most popular foreign beer in South Korea, might lose about 30 billion to 50 billion won (US$25 million to US$42 million) revenue this year, said Park Sang-jun, an analyst at Kiwoom Securities Co in Seoul.
Japanese beer makers have a market share of about 6 percent in South Korea, he said.
While Fast Retailing Co does not have a large exposure to South Korea through its Uniqlo stores, the clothing chain might see a decline in annual sales growth, said Na Eun-chae, an analyst at Korea Investment & Securities.
Some traders are betting that some low-end domestic apparel makers will benefit, she said.
Japanese luxury cars might also take a hit, said Kwon Soon-woo, an analyst at SK Securities.
Toyota Motor Corp and Honda Motor Co have a combined market share of about 19 percent of the foreign car market, data from Korea Automobile Importers & Distributors Association showed.
Anti-Japan sentiment is already hurting some travel companies.
Hana Tour Service Inc saw sales of tour programs to Japan fall 30 percent in the second week of this month compared with a year earlier, spokeswoman Song Won-sun said.
Shares of Hana Tour fell 13 percent this month, while low-cost carrier Jejuair Co plunged 19 percent.
Tomoichiro Kubota, an analyst at Matsui Securities in Tokyo, said that while the impact on Japanese exporters of consumer goods appears to be limited, “there is a possibility of greater overall impact,” should relations deteriorate.
Meanwhile, Fast Retailing Co issued an apology on its South Korean and Japanese Web sites for chief financial officer CFO Takeshi Okazaki saying on July 11 that he thought the impact of the boycott would not last long.
His remarks were intended to mean that the company “hoped” the impact would not be long-lasting, the company said.
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