Duty-free Domination? Global Blue, Union Pay Partner to Entice High-end Chinese Market

    Global Blue and UnionPay are doubling down on their ongoing partnership to make further inroads with China’s most valuable consumers: travelers.
    Global Blue also points out that fast fashion and high street brands can still benefit, with around 25% of total spend being made in the lifestyle, premium, and affordable luxury categories. Photo: Shutterstock
    Jing TravelAuthor
      Published   in Fashion

    Editor's Note:#

    Traveling Chinese consumers have long been one of the most important forces in driving the growth of the global duty-free retail market. The market leader Global Blue teamed up with the Chinese government-backed payment solution UnionPay to best target this affluent segment. This story originally appears on Jing Travel, our sister site.

    Tax-free shopping market leader Global Blue and China’s UnionPay are doubling down on their ongoing partnership to make further inroads with China’s most valuable consumers: travelers. The most recent result of Global Blue and UnionPay’s partnership is the introduction of a Global Blue-operated tax-free shopping portal on UnionPay platforms.

    Initially, UnionPay will roll out Global Blue’s so-called Tax-Free Shopping Portal on its mobile and PC websites as well as its WeChat account. More important in terms of real estate, perhaps, will be the planned rollout of the service on the UnionPay app in “early 2019.”

    Feature-wise, the shopping portal is set to include things like a refund calculator, intended to help travelers understand what refunds they’re eligible for around the world; a refund tracker, for tracking the processing of one’s refunds; as well as a refund office locator.

    However, this is far from the first tangible result to come out of the two companies’ partnership. Last year, Global Blue started providing UnionPay cardholders with preferential tax-free refund options, including in-store cash refunds, in-store UnionPay refunds, downtown cash refunds, and airport UnionPay refunds.

    For UnionPay, partnerships with travel-oriented companies like Global Blue are vital for the card scheme to stay relevant in the world of global Chinese travel. Long considered the “gold standard” for accepting payments by Chinese travelers, UnionPay is now struggling to keep up with advances by mobile payment solutions Alipay and WeChat Pay—both aggressively expanding beyond China’s borders. Fortunately for UnionPay, shopping remains a vitally important part of most Chinese consumers’ travels, with tax-free shopping particularly important to capture high-end consumption.

    In other words, positioning itself as the payment option with the best tax refund policies through a partnership like it has with Global Blue could prove crucial for UnionPay as it fights to retain market share. Of course, catching up with the competition through features like QR code payments is also important to close the technological gap.

    For Global Blue, the continued partnership with Union Pay—and the introduction of features that facilitate refunds—is undoubtedly important. Solutions to speed up the often notoriously slow tax refunds are popping up around the world, and Chinese travelers are increasingly well-educated on what to expect from tax-free shopping. All other things being equal, why not pick the tax refund company with the fastest or most seamless refund experience?

    Chinese consumers are not only the largest tourism source market but also the most valuable tax-free shopping source market, They are certainly a market segment worthy of the industry’s attention.

    But all customers aren’t equal: big spenders are particularly important—and their importance only seems to have grown as of late. One recent example of this was the 2018 Lunar New Year holiday when both the number of Chinese arrivals and transactions in Europe were down. However, the average spending per transaction was up in several European countries, which Global Blue considered a sign that “elite Chinese globe shoppers are continuing to spend and will do so in the future.”

    The top segment of Chinese travelers may just be both more valuable in general and more resilient in times where things like exchange rates and rising fuel costs depress mainstream travel—making them all the more important to keep happy and keep coming back. Global Blue and UnionPay’s partnership addresses that as well: holders of UnionPay’s most premium cards receive priority access to Global Blue’s VIP lounges.

    Meanwhile, Global Blue’s closest competitor—Premier Tax-Free—and UnionPay’s closest competitors—Alipay and WeChat Pay—have partnered up to take on global Chinese tax refunds as well.

    With all this competition and innovation, maybe the consumer will be the biggest winner for once. Needless to say, cheaper and more seamless tax-free shopping for Chinese travelers can only mean good news for destinations and retailers around the world as well.

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