Against the backdrop of a thriving inbound tourism market and preparation for the 2020 Olympic Games, we provide an overview of Japan’s unprecedented Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More growth.

Recent years have seen Japan rise to become one of the most popular travel destinations in the world. In 2017, a record 28.7 million tourists visited Japan, increasing +19% from 2016. This is good news for the country, which is well on its way to reaching its target of 40 million annual visitors ahead of the 2020 Olympic Games.

A boost from major origin markets; China and South Korea

In 2017, 7.35 million Chinese tourists visited Japan, up +15% from the previous year. Of notable impact was the increased travel from China’s tier two and three cities thanks to higher disposable incomes and better flight connectivity. With Japan representing a convenient and ‘safer’ destination, it is one of the most popular options amongst this newer traveller group.

In addition, inbound tourism numbers from South Korea increased by +40% in 2017, to 7.14 million visitors, as South Koreans favoured Japan over traditionally popular China. This is against the backdrop of diplomatic disputes between the two countries.

What is the impact on Japan’s Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More?

Reflecting the inbound tourism boom, Japan’s Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More performance is also thriving. According to Global Blue data, sales-in-storeSiS refers to the total spend by Globe Shoppers for a given ... More have shown remarkable growth of +51% from April 2017 to March 2018.

Chinese Globe Shoppers are Japan’s largest market, representing 65% of the country’s Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More results. Sales-in-storeSiS refers to the total spend by Globe Shoppers for a given ... More progression from the Chinese Globe Shopper‘Globe Shopper’ is a term coined by Global Blue to descr... More market posted an impressive +73% growth from April 2017 to March 2018.

Meanwhile, spend by South Korean Globe Shoppers is growing fast. From April 2017 to March 2018, this nationality represented 5% of the country’s Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More spend in Japan, explained by the +43% growth of sales-in-storeSiS refers to the total spend by Globe Shoppers for a given ... More.

What favourable conditions are driving this growth?

In preparation of the 2020 Olympic Games, the Japanese Government has developed numerous initiatives to stimulate the tourism industry. These include improved access to visas for countries like China, Indonesia and Thailand and significant investment in promotional tourism campaigns.

In parallel, positive macro trends include a weaker yen (trading below ¥110 to the dollar for most of 2017), which made travelling and shopping in Japan more affordable. This had a positive impact on average spendRefers to average value of a transaction (usually applying t... More per transaction, which increased +10% across all Globe Shopper‘Globe Shopper’ is a term coined by Global Blue to descr... More nationalities from April 2017 to March 2018.

Finally, the Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More process in Japan is very easy for travellers; minimal input is required, as the VAT is deducted from the total purchase amount, in-store. This has led to a high ratio of completed refunds, highlighting the importance of making the Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More process as easy as possible for Globe Shoppers.