The Asian TFS market grew for a second consecutive month in January, posting a +8% sales in-store increase last month. This growth was driven by an increase in transactions, which were up +8% month to date, while average spend also increased for the first time since early 2016, up +1%.

Japan drives regional growth

Asia’s upturn in performance can be attributed wholly to a very strong month for Japanese TFS, which saw large numbers of Chinese globe shoppers travel to the country and create positive momentum for the TFS industry. During January, TFS sales increased by +28% month to date, driven by a +35% rise in transaction volume as Chinese shoppers visited Japan in large numbers.

This high volume of trips was driven by the increased spending power enjoyed by Chinese shoppers, as the Japanese yen continued to soften against the Yuan during January. Last month’s growth was also boosted by an earlier than usual Chinese New Year, which saw more Chinese globe shoppers travelling than the January average.

During January, Japan saw positive transaction growth across all spend brackets – a positive sign for the longer term health of the Japanese TFS market. Lower value transactions (below 50,000 JPY) increased by +50%, while high value luxury purchases (above 600,000 JPY) increased by +16%, showing desire to spend from all economic groups.

Korea struggles as Chinese visits decline

The Korean TFS industry has experienced challenging conditions over the last few months and during January the country’s negative performance continued to inhibit growth across Asia. During January, Korean sales declined by -19%, driven fully by a drop in the number of transactions (-18% month to date) as political instability and security concerns deterred Chinese consumers, who account for the majority of Korean TFS spend.

Improvement for key nations

Most key globe shopper nationalities posted sales in store growth in Asia during January, largely due to the softening of currency in Japan, which encouraged Tax Free activates from two lead nationalities. Chinese sales grew by +15% in January across the region, driven by a +11% increase in transactions. Korean sales grew by +14%, posting an impressive +37% increase in transactions last month.

Japanese globe shoppers also delivered a stellar month in terms of TFS, with sales up +28% year on year and transactions up by +21%.

Global Blue takeouts:

• Asia’s January performance was boosted by an extremely strong month for the Japanese Tax Free Shopping (TFS) market

• An early Chinese New Year boosting traveller numbers across the region, increasing month to date transactions by +8%

• Korean sales declined by -19%, driven by a drop in the number of transactions as political instability and security concerns deterred Chinese consumers