Travel during Chinese New Year 2017 proved popular with Chinese globe shoppers, with leading European and Asian destinations competing for their attention and retail spend. Global Blue looks at some of the trends that influenced Tax Free Shopping (TFS) performance during this crucial period in the international retail calendar.
Strong demand for outbound travel and overseas spending, combined with as relaxed visa policies and the expanding network of international direct flights from China, provided ideal conditions for overseas retailers to enjoy strong start to 2017. Ahead of Chinese New Year, Ctrip, China’s most popular travel firm, forecasted that this year’s holiday season would be the biggest ever for travel, with outbound trips expected to surpass last year's total of six million.
Europe back on the menu
European TFS experienced double-digit growth in the first two months of the year, posing +36% growth against the same period in 2016 as Chinese shoppers descended on the continent during Chinese New Year.
Among major TFS markets, the main beneficiary was the UK. The country saw year-on-year sales increase by +96% for January/February as the weaker pound against the yuan proved a positive sales driver, growing the volume of Chinese transactions (+54%) and maximising spending power to drive up average spend (+28%).
Spain also saw large year-on-year sales gains of +48%. This growth was driven by a strong increase in transactions (+41%), thanks in part to the strengthening of air routes between Spain and China over the last couple of years.
France saw the third largest increase in Chinese New Year TFS sales, with a year-on-year increase of +32% for January/February. This continues France’s resurgence as the leading TFS destination, following a 12 month slump caused by terror attacks, labour protests, strikes and floods,
Japan key for Asian growth
While not as stellar as Europe, Asia enjoyed a strong Chinese New Year period, with year-on-year sales increasing +15% in January and +6% in February, against a very strong base of comparison in 2016.
The positive performance was driven by Japanese TFS sales, as large numbers of Chinese globe shoppers travelled to the country. During January/February, Japanese TFS sales increased by +27%, driven by a +35% rise in transaction volume as Chinese shoppers visited Japan in large numbers.
This high volume of Chinese New Year trips can be attributed to a combination of factors; Japan has relaxed visa rules for Chinese tourists, offering 10-year, multiple-entry visas for Chinese tourists and lowering the visa requirements, as part of a plan to increase the number of tourists to 40 million per year by 2020. Visits have also been boosted by the increased spending power enjoyed by Chinese shoppers as the Japanese yen continued to soften against the Yuan during the first two months of the year.
Global Blue takeouts:
• European TFS saw double-digit growth in the first two months of the year, as Chinese shoppers descended on the continent in droves during Chinese New Year
• UK (+96%), Spain (+48%) and France (+32%) all experienced strong growth over Chinese New Year, as European TFS continues to recover
• Positive Asian performance was almost entirely driven by Japanese TFS sales, up +27% year on year