Japan sees recovery in tax-free spending by Chinese tourists

Japan is seeing a clear recovery in tax-free spending by Chinese visitors, which was the key driver of consumption among inbound tourists before the coronavirus pandemic.

International tax-free service operator Global Blue says Chinese tourists visiting Japan spent 25 percent more on tax-free goods in October than in the same month in 2019. That's on a same-store comparison.

The company does business in more than 40 countries and territories worldwide, including Japan. Global Blue says the growth has been apparent since August this year.

Tax-free purchases were down 45 percent from 2019 as Chinese tourist numbers have yet to bounce back to pre-pandemic levels. But average spending per purchase was up 85 percent in yen terms to over 91,000 yen, or about 600 dollars.

Consumables like cosmetics have not sold so well but sales of ornaments, bags and other general goods accounted for 87 percent of all purchases, up from 56 percent. Global Blue says the weak yen is behind the rise in the demand for more expensive items, including brand-name products.

Global Blue CEO Jacques Stern says the recovery in the number of Chinese visitors to Japan is only beginning. He says he expects group tours to return around the time of the Chinese New Year in February.

Stern says shopping demand by inbound tourists will likely remain on a recovery path next year.