On the back of a slower Chinese economy and sluggish household consumption, current trade war between the US and debt crackdown, Chinese consumers are limiting their spending and travels during Chinese New Year 2019.

In China, the Commerce Ministry, National Bureau of Statistics reports that 1.01 trillion yuan ($149 billion) were spent in restaurants, shopping malls and online outlets during the Lunar New Year holiday in the country. If this is a +8,5% increase compared to the same time period in 2018, it is the slowest growth recorded since 2011 with retail sales hitting a record-low since 2002.

This trend persists into the travel and tourism industry with the Chinese Ministry of Culture and Tourism confirming 513.9 billion yuan were spent at tourist venues during the festive holiday, a +8% growth in revenue compared to the year before, but slower than the +13% growth witnessed in 2018. In this context, Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More performance are negatively affected, both locally in the APAC region and in Europe with an increasing number of Chinese globe shoppers choosing to travel locally.

In APAC, January 2019 performances are strongly disconnected from the dynamic witnessed over the past 12 months. Chinese travellers, the key motor behind regional Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More overall trend, are hit by negative exchange rates against a stronger Japanese yen. In parallel, it is most likely that the Electronic Commerce Law which came into effect last January 1st to limit Chinese Daigou business and encourage consumption within national borders, is slowing down the number of transactions and sales in store (SIS) in the region.

Looking closer at Chinese New year 2019 Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More results*, performance is mitigated in the APAC region. Most notably, a strong Japanese yen against the Chinese yuan affects Japan’s Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More performance negatively with a -13% decrease of its SIS and -14% of Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More transactions emitted in the country. However, more favourable exchange rate benefit Singapore which registers a +14% progression of its SIS and +2% progression of Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More transactions.

In this context, Europe is even more exposed to Chinese gradual switch to travelling locally. France and Italy especially fail to see their Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More performance evolve positively. France registers a -20% decrease of its SIS and -24% of the number of Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More forms emitted compared to 2018. Italy endures a rather similar situation over the same period, with Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More SIS slowing down by -2% and a whopping -17% decrease of Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More forms emitted.

Chinese New Year 2019 will end with the Lantern festival from the 16th to the 19th of February.

 

*Chinese New Year celebrations starts on a different date every year. Global Blue data reported in this article starts from 01/31/19 and ends on 02/11/19.