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Asia update: Japanese growth rockets and high-value spend grows


28 July 2017 - Global Blue’s Asian Tax Free Shopping (TFS) sales performance remained strong during June. Japanese performance was the sole driver of growth across the region caused by increased traffic from China.

Highlights

  • Asian TFS sales growth continues during June, up +14% year-on-year
  • Japan experiences exceptional June growth of +52% as both average spend and transactions increase
  • Ramadan limits Indonesian travel to Singapore, slowing down growth in the market during June

 

Falling between two Golden Week periods (Chinese New Year and National Day), Summer is historically a quieter time for TFS in Asia. Despite this, June saw the sixth month of consecutive growth for TFS sales across the region, up +14% year-on-year.

Japan delivers stellar growth

Japanese TFS sales (+52% year-on-year) continue to drive all regional growth in Asia. As Korea’s economic and political situation worsens, Japan remains the main beneficiary of visits from Korean Globe Shoppers and their subsequent TFS spend. Japan’s retail sector has reacted to this surge in transactions (+36% in June) and a rise in average spend (+12%), with several high profile brands expanding operations, further reinforcing the country’s status as a global luxury retail location.

Singapore feels Ramadan impact

While traffic remains strong in Japan, Singapore was negatively impacted by the softer performance of Indonesians who avoided travelling during Ramadan. Indonesians make up around a quarter of TFS sales in Singapore and contributed to a flat performance of +0% during June. Transaction growth was also limited by a high base for comparison in June 2016, when large numbers of travellers from Tier Two Chinese cities visited the country. Average spend was up +7% as higher value customers visited Singapore, balancing the drop in transaction growth.  

High value spend rises

Chinese, Indonesian and Korean Globe Shoppers drove high-value spend growth across Asia during Q2, with June contributing to an increase in high-value sales in Singapore and Japan. Singapore saw solid increases in sales between 3000SGD and 5000SGD from Chinese (+13%) and Indonesian (+16%) Globe Shoppers.

Meanwhile, Japan experienced rapid high-value growth across the quarter, with an increase in sales between 400JPY and 600 JPY from Chinese (+91%) and Korean (+97%) Globe Shoppers.

Key nationalities in growth

Aside from the Indonesian sales, which were impacted by Ramadan (-6% year on year), most leading Globe Shopper nationalities posted strong Asian performance during June.

  • Chinese sales in store increased by +20%, driven by a sharp rise in average spend (+25%)
  • Korean TFS sales grew by +57% year-on-year as large numbers of travelers continued to buy goods outside the country 
  • Taiwanese and Malaysian sales-in-store grew by 15% and 24% respectively during June


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