Lisbon, April 3rd – Jacques Stern, Global Blue President & CEO, presented the audience of the Luxury Shopping Talks with key data on Portugal’s current A number of countries offer VAT/GST refunds to international... More (TFS) market and the opportunities ahead.
The composition of the country’s TFS market is encountering many changes, both in terms of visiting tourists and purchased goods, and suggests many opportunities ahead including:
1. Capture more of Brazilian Elite globe shoppers’* spend: As of now 20% of Brazilians travelling to Europe register at least 1 TFS transaction in Portugal, with an average spending capacity of €15,200. Yet, Portugal only manages to capture 40% of Elite globe shoppers’ spend. Looking forward, increasing Lisbon’s reputation as a luxury shopping capital and promote the country’s craftmanship would be a great boost to Portugal’s TFS market.
2. Gain market share with Chinese globe shoppers: In 2018, Chinese shoppers realized 1% of their European TFS spend in Portugal. Still they account for 15% of Portugal’s performance, the #3 nationality in the country. In the future, tapping into Chinese potential could involve new air routes between Portugal and China, increase the acceptance of Chinese digital payments (Alipay and WeChat digital wallets) throughout the country and adapt the retail offer to the Chinese market, including exclusive editions during Chinese New Year or Golden Week.
3. Leverage the growing potential of Millennials: Out of all Millennials travelling to Europe, 24% of them came to Portugal against 31% in France. There is room to increase the market share of this specific segment of globe shoppers, changing the perception of Portugal as a trendy destination for example.
4. The potential of Brexit: Every year, 2 million** British travellers visit Portugal. In 2018, their TFS spend amounted around 1.6Bn€. In case of Brexit, Global Blue estimates a boost on TFS spend up to +20% and British travellers’ spend to go up +10-15%.
Focus on Portugal’s last 5 years
Portugal is part of the new trend which sees Mediterranean countries as Europe’s new TFS growth engine. The country experienced a TFS CAGR*** growth of +12% over the same 5-year period. Portugal is gaining the interest of two new nationalities, Chinese and Americans, known for their high-spending potential. Their CAGR growth multiplied by x3.6 and x5.8 respectively in Portugal over the past 5 years. The Portuguese luxury segment is showing double-digit growth in 2018, +12%.
* Individuals who have spent more than €40,000 over the last 24 months
** Portugal Tourism Office & Global Blue
*** Compound Annual Growth Rate