After 58 per cent growth last year, Chinese tax-free shopping has gone into reverse gear, according to the Global Blue China Shopper Report.

However, China has retained its position as the number-one global shopper market, accounting for a third of tax-free shopping sales worldwide.

Switzerland-based Global Blue says May and October are set to be busiest months for travel by “regular” Chinese travellers, offering opportunities for global retailers, who need to focus on value and convenience to attract them.

Its China report combines data from more than 27 million tax-free shopping transactions with the opinions of 5000 regular Chinese travellers about their travel and spending plans for this year. Regular Chinese travellers are defined as survey respondents who have been on an international holiday in the past two years or plan to go on one this year.

Despite the recent turbulence, Chinese global shoppers remain a lucrative market, says the report. Last month, Chinese tax-free shopping dropped into negative growth, falling 24 per cent year-on-year. This followed slow growth for the first two months of the year (11 per cent in January and 5 per cent in February).

Reasons for the decline include the ability to obtain visas (an important consideration for 22 per cent of regular Chinese travellers), and terrorist attacks (safety and security were cited by 56 per cent of respondents as an important destination factor).

Shopping important

Fluctuation of the yuan on tax-free shopping sales is likely to be minimal, says the report, as the yuan weakened by just 3 per cent against the euro this first quarter. However, the research indicated that nearly half of those surveyed would reconsider their destination (46 per cent) or cut their shopping budget (47 per cent) because of exchange rates.

Shopping remains a hugely important part of the holiday experience for regular Chinese travellers, says the report, as 81 per cent of those planning international travel this year will shop during their trip with an average shopping budget of 25,902CNY (US$3997) when travelling to Europe and 18,398CNY for Asia visits.

May is expected to be the most popular month for travel to Europe, Japan and South Korea, while October will be attractive for visits to other Asia-Pacific destinations such as Australia and Singapore. These two key months coincide with major Chinese holidays: Labour Day (May 1-4) and Golden Week (October 1-7).

Asia is the main destination for Chinese visitors throughout the year, with 73 per cent of those planning a holiday this year intending to travel within the region. South Korea is targeted by 26 per cent of Chinese travellers this year, followed by Japan (23 per cent).

When it comes to Chinese tax-free shopping spend within Asia, Japan was the region’s strongest performer during the first quarter with 50 per cent growth. Chinese shoppers accounted for 54 per cent of APAC’s sales. Also, Chinese transactions in Asia increased by 32 cent during the quarter.

What they like

When asked what makes a good shopping destination, 35 per cent of respondents opted for a good selection of shopping malls or retail parks, while 33 per cent said they looked for a destination with famous international brand stores. For 31 per cent, the availability of products at better prices than in China was important.

The research also revealed the top five services that should be offered by retailers looking to attract Chinese shoppers: tax-free shopping (65 per cent), ability to pay with China Union Pay (55 per cent), ability to pay in their home currency (46 per cent), retail staff who speak their language (39 per cent) and Wi-Fi in-store (26 per cent).

Their main research points for international shopping include travel, shopping and fashion websites (43 per cent) and recommendations from friends and family (also 43 per cent), Social media also plays a key role, either through the brand’s own site (38 per cent) or via inspiration from friends’ pages (36 per cent).

Opinium Research ran the survey, sampling 5005 Chinese travellers between January 22 and February 1.

Global Blue came up with the concept of tax-free shopping more than 35 years ago and now creates value for retailers and partners through a range of products and services. It has a presence in 51 countries, employing more than 1800 people worldwide. Global Blue last year powered more than 27 million transactions involving 22 million dynamic currency conversions and €19 billion (US$2.1 billion) worth of sales.