China travelers fuel 33% spike in tax-free spending

Mainland Chinese consumers led the world in tax-free spending for July 2024, with the nation accounting for a 33% YoY increase, according to a recent report from tourism shopping tax refund company Global Blue. This is an uptick compared to the country’s 31% progression for Q2 (April to June 2024), and a significant increase compared to the rest of the world. The numbers showcase a strong revival for the country’s shoppers spending figures with Mainland Chinese also notably leading in the Asia-Pacific region, dominating revenue with a 97% boost YoY and an increase of 107% in terms of number of Chinese tax-free shoppers. The July spike in the region was partly attributed to Hong Kong’s newly introduced duty-free shopping quotas for Chinese visitors, increased from 5000 RMB ($698) to 15,000 RMB overall ($2100). It was also credited to this summer’s influx of Chinese travelers to Asian destinations such as Japan, Thailand, South Korea and Malaysia, with relaxed visa restrictions and favorable exchange rates that saw a surge in visitors across the region. Drop in global growth Overall, global in-store tax-free shopping revenues rose only by 25% for July, which is a significant drop compared to up 41% for last quarter. USA tax-free spend was up 15% for the month, with 20% more shoppers overall, according to the report. In Continental Europe, in-store growth was limited to 12%, with a 10% increase in number of shoppers; and while the numbers seem positive, they represent a drop in growth compared to the 19% from Q2, with the fall largely attributed to France’s declining figures, where preparations and restrictions from the Paris Olympic Games had negatively affected sales and shopping. China on the move, post-pandemic recovery In June, Global Blue revealed that Mainland Chinese shoppers had finally roared back to pre-pandemic levels, reaching 132% of 2019 numbers and highlighting the return of the country’s outbound tourists after years of local spending and tourism. The numbers were a significant boon for retailers, emphasizing the pent-up demand of Chinese consumers for international travel and luxury goods. China's outbound travel market poised to reach 130 million this year, according to ITB China’s latest Travel Trends Report. With tax-free spending numbers only expected to increase for Chinese travelers, brands are presented with a significant opportunity to reevaluate their marketing strategies, creating events and promotions tailored exclusively to the country’s demographic as well as focusing on digital localized solutions that can enhance the overall overseas shopping experience, from Chinese app promotions and enabling Alipay and WeChat wallet payments. Additionally China's outbound travel market is increasingly led by a younger, more educated demographic, according to the China Tourism Academy. Travelers aged 22 to 41 now represent nearly 83% of this group, signaling a significant shift in travel dynamics. A similar trend is echoed by data from Trip.com, showing that combined, post-1990s and post-2000s travelers have surpassed the number of older post-1980s generation. These younger tourists, characterized by their tech-savviness and global outlook, are redefining Chinese tourism, positioning themselves as the dominant force in the outbound travel market.

China travelers fuel 33% spike in tax-free spending

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Published August 19, 2024

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China travelers fuel 33% spike in tax-free spending