What Happened
Tax-free shopping returned to pre-pandemic levels last month, according to a recent update by tourism shopping tax refund company Global Blue.
The global recovery for tax-free shopping surged to 172% of 2019’s level, showcasing a robust revival in international shopping. Mapping tax-free shopping across Continental Europe and Asia-Pacific (APAC), Global Blue highlights the key role of Chinese shoppers in driving the segment’s post-pandemic recovery.
APAC, led by Japan and buoyed by strong performances in South Korea, is seeing a particularly vigorous recovery. In May, tax-free spending by Mainland Chinese shoppers reached 132% of 2019’s level, underscoring the return of Chinese outbound tourists after years of domestic travel and spending. Examining the year-on-year growth, tax-free shopping by Mainland Chinese shoppers jumped 164% in May on a global basis.
These figures highlight a recovery long welcomed by retailers, along with a notable shift in consumption patterns influenced by pent-up demand and a keen interest in luxury goods and international travel.
Spending soared 250% YoY across APAC in May. Mainland Chinese consumers spearheaded this increase with an impressive 272% jump over May last year. Spending by travelers from Hong Kong and Taiwan, meanwhile, rose a remarkable 705%, and those from Northeast Asia showed a 378% increase.
The recovery was strong in Continental Europe, too. Spending rebounded 145% YoY, propelled by France, Spain, and Italy. Mainland Chinese shopper spending in Europe grew 39% YoY.
The Jing Take
The resurgence of tax-free shopping, especially driven by Mainland Chinese consumers, presents luxury brands and retailers with a unique opportunity to reassess and realign their strategies.
This includes focusing on personalized services, understanding regional preferences, and integrating digital solutions to enhance the shopping experience for Chinese luxury consumers.
Moreover, as Chinese consumers increasingly engage in international shopping, brands need to create more tailored, culturally resonant experiences catering to their specific interests and preferences. This demographic continues to shape the global luxury market, necessitating strategic adaptations from brands.
The Jing Take reports on leading news, presenting our editorial team’s analysis of the key implications for the luxury industry. This recurring column covers everything from product launches and mergers to significant discussions on Chinese social media.