Asia update: Japan and Singapore benefit from lower spend in Korea


06 June 2017 - Global Blue’s Asian Tax Free Shopping (TFS) sales grew strongly in April, continuing a six-month positive trend. Despite continuing difficulty for the Korean TFS sector, Japan and Singapore remain in healthy growth, helping to drive strong performance across the region.

Highlights

  • 2017 TFS spend growth continues in Asia during April, up +20% calendar year-to-date
  • Singapore enjoys a second month of positive growth, delivering calendar year-to-date sales of +9%
  • The Korean TFS landscape remains challenging, resulting in a -19% sales decrease for the first four months of the year
  • Japan remains the main beneficiary of diverted traffic from Korea, up +26% calendar year-to-date
     

The Asian TFS sector experienced its strongest performance in many months, growing +20% (calendar year-to-date). Transactions across the region increased by +28% (calendar year-to-date), despite continued pressure on Korea’s TFS sector caused by strained political relationship with China.

Key markets
With limitations on travel to South Korea impacting travel plans, Chinese shoppers in the region chose Singapore and Japan as alternative Tax Free Shopping destinations, with both countries benefitting from an influx of Chinese tourists.

Singapore closes in on double digit growth

  • Singapore benefitted from positive macro drivers, including the diversion of tourists from Korea, delivering calendar year-to-date sales of +9%
     

Japan continues to drive Asian growth

  • While the strong Japanese yen could have caused limited TFS growth in April, the country actually saw calendar year-to-date sales up +26%
  • Growth was driven by in strong increase in visits Chinese shoppers, with Japanese TFS transactions up by +47% (calendar year-to-date)
     

Korean decline continues

  • Tensions in Korea continue to impact TFS spend, with Chinese and other key nationalities declining steadily over the last four months
  • Calendar year-to-date sales declined by -19% on 2016 figures, driven by both a drop in transactions and average spend
     

Key nationalities
April performance was strong across all key Globe Shopper markets, with Chinese travellers still the main driver of growth in Asia. Significant growth of both Korean and Japanese transactions helped to deliver further growth across the region.

Chinese spend continues to grow

  • Chinese calendar year-to-date sales grew by +20% across the region, driven largely by an increase in transactions (+17%)
     

Korean and Japanese growth

  • Overseas TFS sales from Korean travellers were bolstered by volatile conditions at home, while the strength of the yen saw Japanese Globe Shoppers also spend aboard in large numbers
  • Korean transactions increased by +69% (calendar year-to-date), while Japanese transactions grew by +74%
     

Category spend
April continues a positive Asian performance across all spend categories. Calendar year-to-date sales increased +52% for department stores, +17% for watches and jewellery and +13% across fashion and accessories.


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