Convenience Store Owner Arrested for Buying ¥100 Million in Cigarettes — The Reason Japanese Tobacco Is Booming Among Chinese Resellers

Arrest made for unauthorized purchase of large quantities of cigarettes

On May 14, the Tokyo Metropolitan Police arrested a 50-year-old convenience store owner and four Vietnamese nationals in their 20s — two men and two women — in Kabukicho, Shinjuku Ward, Tokyo, on suspicion of computer fraud for using illegally obtained credit card information to purchase heated tobacco products.

The five are suspected of conspiring with others between November 8 and 10 last year to fraudulently purchase about 2,800 packs of tobacco worth approximately 1.63 million yen at the convenience store run by the owner, using offline smartphone payments linked to stolen card data. Police believe the group illicitly purchased and resold roughly 170,000 packs of tobacco worth about 100 million yen between May and November last year, profiting from the scheme.

“It appears the credit card information used had been obtained through phishing scams and similar means. Normally, when a card’s unauthorized use is detected, transactions are blocked — but by putting the smartphone into offline mode, the suspects were able to conduct offline payments.

The upper limit for offline payments is 10,000 yen, and it seems they repeatedly purchased 17 packs of tobacco priced at 580 yen per pack, totaling 9,860 yen each time. The Vietnamese nationals were reportedly called into the store late at night by the owner, and for about three hours, they used smartphones at the store’s self-checkout to continuously buy tobacco, a process caught on the store’s security cameras,” a social affairs reporter explained.

Given the location, there are many people making suspicious purchases

The convenience store run by the arrested owner was located in one of the busiest parts of Kabukicho, where countless people pass by. A man who operates a nearby restaurant said he had seen people making suspicious purchases there.

“I’ve seen people occupying the register for a long time at that convenience store, buying large quantities of cigarette cartons. I had no idea those people might have been buying them for resale. I’ve bought cigarettes at that store many times myself, and at night, people working in the nightlife business would come by to buy cigarettes for their customers — the demand for tobacco was pretty high. It also seemed like the store kept a lot of stock on hand.”

The store was in an area with heavy foot traffic, and being in Kabukicho, it wasn’t unusual for many shady transactions to take place.

“On nights when a hostess club held a birthday celebration for one of the girls, I saw big-spending customers buying out the store’s entire stock of heated tobacco products. There are so many eccentric customers in Kabukicho that no one really pays attention even if someone makes several suspicious card payments. You’d see people with blood streaming from their heads or half-naked men walking around — so to the locals, someone buying a huge amount of cigarettes wouldn’t seem strange at all,” the man added.

In China, Japanese cigarettes are popular

Purchases of cigarettes for resale purposes have been occurring frequently for several years now, with most of them exported overseas and resold at high prices. In particular, the resale of Japanese heated tobacco products to China is notable — several sites selling them for overseas markets can even be found on social media.

In fact, Japanese-made heated tobacco is popular in China and traded at higher prices than in Japan. Although the import, sale, and possession of Japanese heated tobacco are illegal in China, smuggling and resale by trafficking groups continue. A writer familiar with the resale trade explained the reasons behind this.

“They sell well. Japanese tobacco is consistently popular in China for its quality and taste, and there are plenty of people who want to buy it. Most of it is sold through social media, and on an app called WeChat, resale by dealers is a daily occurrence.”

While high demand is one factor, there are other reasons why cigarettes are chosen as a resale item.

“Prices aren’t always clearly listed in online transactions, but generally, they’re said to sell for about 1.5 to 2 times the price in Japan. A carton bought in Japan costs around 5,800 yen. Compared to iPhones or gaming consoles, the unit price is lower, but cigarettes are sold for the same price anywhere in Japan, so it’s easy to gather large quantities. For resale organizations, it’s a profitable product. Customs inspections are also relatively lax, and large amounts can be brought in via suitcases, making for high profit margins — another reason for their popularity.”

Since purchasing tobacco itself is legal for adults in Japan, it’s also common for international students and others to be recruited through social media for easy part-time work, sending cigarettes from Japan to China.

In the Kabukicho case, the suspect was arrested for fraudulent credit card use — not for buying large amounts of cigarettes, which isn’t illegal in Japan. However, in many cases, it’s illegal for individuals to bring large quantities of tobacco into other countries, and China bans heated tobacco entirely. It’s precisely because of this legal risk that resale organizations can profit.

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