According to a recent report from Global Blue, a leading provider of tax-free shopping services, the number of affluent travelers spending at least €70,000 annually on tax-free luxury goods increased by 168% between September 2023 and August 2024 compared to pre-pandemic levels. Affluent tourists from the U.S. and the Chinese Mainland predominantly choose France for luxury shopping, while wealthy Indian travelers prefer Singapore.
Ultra-high-net-worth individuals (UHNWIs), despite accounting for only 0.1% of tax-free shoppers, contributed 13% of tax-free expenditure during the reporting period.
Based on location, Paris emerged as the top destination for UHNWIs, with one in two high-net-worth shoppers opting to shop there. The Paris Olympics boosted sales, particularly for sporting goods, which saw a 76% increase year-over-year. Sales of watches and jewelry also rose by 30%. Lesser-known European destinations, including Mykonos, Athens, Courchevel, St. Moritz, and Ibiza, have also grown in popularity, with UHNWI visitor numbers up 56% compared to 2019.
By nationality, Chinese affluent consumers led global tax-free luxury spending during the reporting period, accounting for 25% of the market, though this was a drop from nearly 37% in 2019. Wealthy travelers from Southeast Asia and the Middle East ranked second and third, contributing 18% and 14% of the market share, respectively, while affluent Americans accounted for 10% of spending.
Image above: CDF Sanya International Duty-Free Shopping Complex
Additionally, data from Agility Research & Strategy, a co-author of the report, indicates that while affluent Indian travelers currently make up just 1% of global tax-free luxury spenders, their purchasing power and numbers are expected to rise. During the reporting period, India’s wealthiest travelers spent an average of €140,000 on tax-free purchases.
Unlike American and Chinese luxury shoppers, who primarily choose France, affluent Indian travelers favor Singapore as their shopping destination. Singapore’s proximity to India (just a six-hour flight) and the convenience of e-visas make it particularly attractive to Indian high-net-worth individuals, who spent an average of €125,300 there during the reporting period. Paris ranks as the second choice for Indian affluent tourists, though with a lower average spend of €41,100, followed by Geneva, where they spent an average of €82,600.
Regarding product preferences, 86% of wealthy Indian tourists prefer limited-edition or customized luxury items, followed by 78% of British consumers. While affluent American and British shoppers tend to favor classic styles, Indian and Chinese consumers lean towards trendy products. Additionally, Indian and British luxury shoppers prefer visible brand logos, while American and Chinese affluent shoppers prefer subtler branding.
In terms of VIC/VIP (Very Important Customer) membership services, British consumers hold the most VIP memberships, followed by Indians, with Chinese and American consumers in third and fourth place. Chinese and British shoppers are more drawn to exclusive offers and sales, while Americans prefer personalized information. Indian consumers are most attracted by priority access to events and other key privileges.
The report also revealed that during the reporting period, ultra-high-net-worth tax-free shoppers visited an average of nine different brands, though their spending was unevenly distributed. The top two brands accounted for 75% of their total tax-free spending, while the other seven brands received significantly less. This uneven distribution could mean that these seven brands miss valuable opportunities to identify and engage with ultra-high-net-worth customers.
Data from Agility Research & Strategy indicates that by 2027, the number of ultra-wealthy individuals is expected to rise by 38%, with Americans, Chinese, British, and Indians comprising the largest share. Ninety percent of Indian respondents anticipate an increase in their luxury tax-free spending, followed by 78% of Americans. In the coming 12 months, 95% of affluent Indian consumers expressed a strong desire to travel internationally, followed by 88% of British consumers, and 81% of both American and Chinese consumers expect an increase in luxury tax-free spending.
| Source: Global Blue, luxurytribune.com, Montenapodaily.com
| Image Credit: Pexels, Sanya Tourism Development Bureau Official Website
| Editor: Liu Jun
