Asia-Pacific region drives tax-free purchases in department stores in 2018

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Isabelle Crossley
today Jun 13, 2019
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In the last five years, department stores have seen an average growth rate of 21 percent in the amount of tax-free shopping compared to nine percent growth in the same time period for other retailers offering tax free shopping. This significant increase is due to growth in APAC department stores. 

Like their European counterparts, APAC department stores are seeing an increase in tax rebate shopping thanks to Chinese shoppers. - Shutterstock

Department stores in the APAC zone saw a 47 percent increase in tax-free shopping sales over the past five years, according to figures from the tax rebate specialist Global Blue released at the sixth World Department Stores Forum which took place on June 7 in Tokyo. The APAC growth rate was sharply contrasted by the moderate growth rate of seven percent seen by European department stores. 

Chinese shoppers have contributed significantly to the boom in sales of tax-free products in European and APAC department stores. However, although Chinese shoppers accounted for 76 percent of growth in APAC department stores, the situation is considerably different in Europe where Chinese tourists accounted for less than a third of the recent sales growth.

“When we look at the nationalities that are driving tax free sales in European department stores, a quarter of purchases were generated by shoppers visiting from the Gulf,” said Global Blue. “Despite this, Americans, who make up four percent of tax-free shopping in European department stores, are the only nationality that witnessed an increase in tax free purchases over the past year, amounting to a 5.4 percent increase. 

And what about Elite buyers (who made over €40,000 in tax-free purchases over the past 24 months) and Frequent buyers (who made over three purchasing trips in the last 24 months)? Both groups represent 40 percent respectively of the growth in tax free purchases in Europe and APAC department stores. This specific clientele is also responsible for valuing the average one-time transaction for tax-free shopping in a department store at over €750 in 81 percent of transactions in Europe and 63 percent of transactions within the APAC region.

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