Where did China’s ultra-rich travelers spend tax-free in 2023?
Analysis of Chinese travelers’ tax-free spending reveals that Europe came out on top for luxury buys, while APAC was the preferred destination for big-ticket watch and jewelry purchases.
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Published March 01, 2024
What Happened
Asia-Pacific received the largest share of Chinese travelers’ tax-free spending in 2023, capturing 60 percent versus continental Europe’s 40 percent. But for the country’s biggest spenders, Europe reigned supreme, according to a new report from Swiss tax-free services provider Global Blue.
In Europe, 84 percent of Chinese travelers’ tax-free spending was in the luxury and exclusive product categories, versus 47 percent in APAC, where the majority of spending occurred in the lifestyle and premium brand categories.
Globally, the tax free spend recovery by China’s travelers was highest among the ultra rich. A 62% recovery was noted for high net worth individuals who spend between €20,000 to €70,000, annually, on tax free shopping. Meanwhile a commendable 77% tax free spend recovery was established among the ultra high net worth individuals who spend more than €70,000, annually on tax-free shopping.
Japan remained the top destination for Chinese tourist spending, thanks to its geographical proximity to the mainland, speedier visa processing times, and a weaker Yen. Chinese travelers spent twice the average amount in Japan last year than they did in 2019. However, France remained the top destination for China’s overseas luxury shoppers.
The Jing Take
Several factors are hampering a full recovery to pre-pandemic levels of spending, including lengthy visa-processing times, fewer group travel options, and rising costs in Europe. However, these latest figures indicate growth is accelerating, led by high-net-worth travelers, which is good news for luxury brands.
The slowest recovery was seen among Chinese nationals classified as affluent or aspirational shoppers, who spend up to €20,000 ($21,632) overseas.
The slowest recovery was seen among Chinese nationals classified as affluent or aspirational shoppers, who spend up to €20,000 ($21,632) overseas.
Europe saw a modest uptick in Chinese shoppers in terms of value. Wealthy Chinese who made their way to Europe spent an average of 3,450 euros ($3,731), nearly 33 percent more than they did in 2019. Paris and Milan claimed the top two spots for tourists from China.
Leather goods and bags were the most popular hard luxury items, followed by ready-to-wear apparel, and then watches and jewelry.
In APAC, department stores, perfumes, sportswear were the biggest attractions for Chinese shoppers, followed by leather goods, apparel, and watches and jewelry.
Interestingly, Chinese shoppers chose Asia instead of Europe to splurge on big-ticket watches and jewelry. The average spend in Asia in this category was 6,200 euros ($6,706), compared to 5,400 euros ($5,840) in Europe.
Global Blue forecasts a resurgence of Chinese shoppers in Europe this year as visa processing times shorten, flight capacity expands, and inflation weakens in Europe. Retailers and brands alike continue to wait with bated breath.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.