Tax-free shopping continues strong growth

By

Jean-Paul Leroy

Published
Feb 16, 2015

Tax-free shopping is continuing to grow, according to the latest research published by the tax refund service provider Global Blue. The growth is in large part due to an 18% increase from 2013 to 2014 for China, the largest spending group.

China and Russia are by far the countries with the largest spending per number of shoppers, reports Global Blue, while Chinese customers now account for nearly a third of all tax free shopping expenditures. The top five are: China (30%), Russia (14%), USA (4%), Indonesia (3%) and Japan (2%). 

Five out of the top ten nationalities in the tax free shopping rankings (Taiwan, Hong Kong, China, Kuwait and Saudi Arabia) spent 15% more in 2014. 

Almost 50% of these purchases were related to fashion and clothing, by far the largest category, followed by watches and jewelry, comprising 17% of purchases.

"Clearly we are entering a new normal in terms of Tax Free Shopping growth, however it is important to remember that for the seventh consecutive year, Chinese globe-shoppers are still the biggest spending nationality, spending on average €736 ($840/£546) per transaction. In 2014, the number of Chinese transactions increased by 38%." 

Residents of Taiwan, Hong Kong and China have certainly benefited from a favorable exchange rate against the euro, said Global Blue, an advantage it seems that they will continue to enjoy in the absence of signs of economic recovery in Europe. 

The residents of these countries are getting better value compared to shopping at home with every month that passes.

Due to the fall of the ruble, spending by Russian travelers has instead fallen by 17% compared to 2013. Despite this decline, Russia’s spending remains more than three times that of shoppers from the third highest ranking country: the United States. 

Other nations have also recorded noteworthy numbers. In sixth place, Taiwan recorded a huge 29% increase as compared to 2013. The emergence of Taiwanese globe-shoppers was not only felt in Asia, but also in Europe’s leading destinations. 

In October 2014 in Paris, the Taiwanese were the fourth most valuable tourist nationality, with a year-on-year increase of 15%, while in November, their spending increased by 65%. At this rate, their spending will exceed that of the Japanese in 2015, according to estimates by Global Blue.

In Seoul, which is becoming Southeast Asia’s shopping paradise, the Taiwanese spent 25% more in October. Only the Chinese spent more. In November, spending in Seoul rose by 30%, while it jumped by 44% in December. 

In terms of shoppers’ favorite destinations, Paris has largely maintained its top position, ranking five times as the preferred city within the top ten globe-shopper nations: China, the US, Japan, Taiwan and Hong Kong. London ranked second, the favorite city of Thai, Saudi, UAE and Kuwaiti globe-shoppers.

Only the Russians preferred Milan, which is certainly not the best thing for Italy’s economic capital right now. Finally, Singapore is the preferred city of Indonesian shoppers.