I saw a very popular seasonal KitKat stand within Seibu department store when I was visiting Japan, and I didn't notice any other tourist-looking people around. Is it possible that it's just not popular in the convenience store market, but is more popular in competition with all of the higher-end sweets people were constantly giving me, talking about, and eating while I was there?

Maybe magic of department store. You put the same thing in Tokyu Store and the same in depaato, make sure to overprice it. People will buy from depaato. Probably for a gift. It just works like that in Japan.

Plenty of KitKats is in my local Tokyu Store - no one is buying them. I never saw anyone in my office eating KitKat even once. They eat plenty of other sweets, often local. Also no one ever brought it as a travel gift (omiyage.)

This is what I saw too.

I bought a Kit Kat Chocolatory gift box large for 45 USD as a gift for our anniversary (my partner & me). The S&H was 25 USD.

It was OK, an interesting experience. Just not worth that amount of money (YMMV and the surprise effect was worth it). It contained about 5 different types of Kit Kat (maple & strawberry, green tea, butter, ..pistachio?) including 4 Sublime Bitter. The latter were, IMO, ace but I already regularly eat pure sprinkles and pure chocolate spread and I am already used to Belgian bonbons and German/Swiss chocolate. I bought it for the Japanese twist...

Strangely, a month or 2 after I received it (it was stored as a present, meanwhile) PayPal send me an e-mail that the payment wasn't claimed and I got my money back from PayPal (???). Peculiar experience.

Tourists, yes, but to a large extent internal tourism due to the tradition of bringing back regional snacks for friends, family and coworkers. If you visit the gift shops along the highways in Japan they are stacked high with kitkat boxes of the local specialty flavours.

I was basically going to write the same but to avoid being a me too comment, here's the catalog to show you the diversity:

https://nestle.jp/brand/kit/gotouchi/

It's a not so uncommon omiyage to buy. Each region has their own flavors, so you are more likely to get them from co-workers than friends.

There was also the marketing ploy around 15? years ago that they did a play on Kit Kat to be きっとかつ/きっと勝つ/kitto katsu for students that wanted to feel like they would surely win a game or pass a test.

Same. Lived in Japan, rarely saw anyone outside of tourists buying them. Combinis and grocery stores hardly ever feature them (unless those stores get tourist traffic).

Can second this. I travel to Tokyo often and have purchased Kit Kat to bring back home. Mostly tourists buy these, none of my local japanese friends do

Speaking of tourist candy, what's with M&M stores being at all the off-broadway/times square ripoffs in every major city?

Spending 50% of my time in an investment office in Japan - at least one secretary I know loves Kit Kat and Reese’s

Same observation here, before my first trip I expected Kit Kat to be huge there