Global Blue international tax free spend figures for the first quarter of 2015 reveal SEATs (South East Asian Territories) are catching up with their Chinese neighbours in terms of UK spend power.
From January to March, Hong Kong, Malaysia and Thailand have accounted for a total of 11% of tax free spend in the UK and seen double digit growth as they all secured their position in the top 10 spending nations. As May, the key time for SEAT travel arrives retailers and hotels should get set for the influx.
“The Q1 figures have highlighted the SEATs growing desire to shop in the UK as they follow their Chinese neighbours,” comments Gordon Clark, Country Manager UK & Ireland at Global Blue. “Early summer has been clearly identified as the prime time for travel and is now as significant as Golden Week is for Chinese shoppers in terms of the peaks of the UK’s international shopper calendar. Retailers should be taking every measure to attract this core shopper group over this key period by offering tax free service and preparing staff with cultural training.”
According to Global Blue, a retail tourism specialist, Hong Kong is the new top spender to look out for, with the most significant rise in spend in store for Q1 at 38% year-on-year, more than any other nation including top spender China whose growth was only 10% year-on-year for the period. The most significant influence was over the period following Lunar New Year, which also coincided with London Fashion Week this year, when Hong Kong spend soared 63% year-on-year (March 2015), as they followed the Chinese trend of flocking to UK to buy high end luxury British designers on territory.
Thailand and Malaysia are also in the top 10 for overall tax free spend in the UK. Despite severe political unrest seen across Thailand last summer, spend by Thai shoppers has seen impressive strength this year, up 11% year-on-year for Q1, highlighting the power of the appeal to shop in the UK. Thai shoppers have also shown steady growth in average spend per transaction, up 15% year-on-year to date to £856, just behind Hong Kong shoppers’ £881 and ahead of Chinese’s £786.
Malaysia’s collapse in oil prices last June also had a huge effect on their public finances with a deteriorating balance of payment which led them to fall behind Thailand in 2014 as the top SEAT spenders. However, they are climbing back this year, and in March in particular saw a huge increase of 34% year-on-year for the month as they extended their stay around the Lunar New Year celebrations. As the second country after China to believe shopping is the most important past time when travelling, their strength is expected to continue as economic factors resolve.
Although many SEAT globe shoppers have easy access to global designer brands at home, it has become clear there is now a ripple effect out of China for the trend to travel to the UK to shop because of the premium placed on authenticity in their purchases and the ability to now so easily reclaim their VAT. SEAT shoppers are still slightly behind the Chinese as shopping experts, as according to Global Blue insights despite China’s growing trend to buy from more unique British designers in addition to the traditional designer powerhouse labels, SEATs are still favouring big department stores and it’s those businesses who should expect to benefit from the influx.
Myf Ryan, Westfield Director, comments, “China is the number one international market to visit Westfield London, particularly The Village. The purchase power of this market has become increasingly evident with the rise of Chinese shoppers visiting Westfield year-on-year. But the Chinese market isn’t the only South East Asian market to visit Westfield. 20% of Westfield’s overseas visitors come from Asia with three quarters of these visi