The Power of Globe Shopping in 2014 - Global Blue

UNDERSTANDINGTHE UHNW CONSUMER

LONDON, May 3, 2023

Manelik Sfez@GlobalBlueBiz

UNDERSTANDINGTHE UHNW CONSUMER

LONDON, May 3, 2023

UNDERSTANDINGTHE UHNW CONSUMER

LONDON, May 3, 2023

UNDERSTANDINGTHE UHNW CONSUMER

LONDON, May 3, 2023

The power of globe shopping

UNDERSTANDINGTHE UHNW CONSUMER

LONDON, May 3, 2023

globe shop per∙/ˈglōbˌSHäpər/

noun

1. a person who considers shopping as a fundamental part of their travel

experience.“globe shoppers are the sixth continent

for the retail industry”

2. a fast-growing retail market segment, which global worth was estimated at

more than EUR 48 billion in 2013.“building growth from globe shoppers –

the world’s most valuable customers.”

/ˈglōbˌSHäpər/

noun

1. a person who considers shopping as a fundamental part of their travel

experience.“globe shoppers are the sixth continent

for the retail industry”

2. a fast-growing retail market segment, which global worth was estimated at

more than EUR 48 billion in 2013.“building growth from globe shoppers –

the world’s most valuable customers.”

globe shop per∙/ˈglōbˌSHäpər/

noun

1. a person who considers shopping as a fundamental part of their travel

experience.“globe shoppers are the sixth continent

for the retail industry”

2. a fast-growing retail market segment, which global worth was estimated at

more than EUR 48 billion in 2013.“building growth from globe shoppers –

the world’s most valuable customers.”

Russians Mid-Easterns Chinese

48%56%

82%

“Shopping is my priority when I travel”

Sour

ce: G

loba

l Blu

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1. a person who considers shopping as a fundamental part of their travel

experience.“globe shoppers are the sixth continent

for the retail industry”

2. a fast-growing retail market segment, which global worth was estimated at

more than EUR 48 billion in 2013.“building growth from globe shoppers –

the world’s most valuable customers.”

Russians Mid-Easterns Chinese

48%56%

82%

“Shopping is my priority when I travel”

40%

60%

Share of sales for luxury brands

Domestic shoppers Globe shoppers

Jean-Paul Agon

“Travel Retail is a key channel for winning over one billion new consumers; it is present

around the world as a sixth continent.”

Where do they come from?

27%

17%

4%3%3%

46%

JAN-DEC 2013: top 5 globe shopper nations by share of total spent

China Russia Indonesia USA Japan Others

Source: Global Blue Analytics

22%

20%

5%4%3%

47%

JAN-APR 2013: top 5 globe shopper nations by share of total spent

ChinaRussiaIndonesiaJapanThailandOthers

27%

17%

3%3%3%

47%

JAN-APR 2014: top 5 globe shopper nations by share of total spent

ChinaRussiaIndonesiaUSAJapanOthers

Source: Global Blue Analytics

Angela Ahrendts

“Investors should switch their focus from China to the TLC (Travelling Luxury Consumers), a more powerful

force than the Chinese market alone.”

Where do they shop?

18%

16%

15%12%

11%

27%

JAN-DEC 2013: top 5 destination countries by share of total spent

FranceItalyUKGermanySingaporeOthers

18%

16%

16%12%

12%

27%

JAN-APR 2014: top 5 destination countries by share of total spent

FranceUKItalySingaporeGermanyOthers

Source: Global Blue Analytics

How much do they spend?

China USA Indonesia Japan Market Russia

€ '815

€ '647 € '608

€ '509 € '501

€ '356

JAN-DEC 2013: average spend of top 5 globe shopper nations

Thailand China Indonesia Japan Market Russia

€ '870 € '846

€ '648

€ '514 € '502

€ '358

JAN-APR 2014: average spend of top 5 globe shopper nations

Source: Global Blue Analytics

Source: Global Blue Dossier “The growing complexity of the Chinese globe shopper”

Welcome to the new normal

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Chinese total spend

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

-20%

-30%

-10%

Source: Global Blue Analytics

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Chinese total spend

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

-20%

-30%

-10%

Source: Global Blue Analytics

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Chinese total spend

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

New tourism law

-20%

-30%

-10%

Source: Global Blue Analytics

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Russian total spend

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

-20%

-30%

-10%

Source: Global Blue Analytics

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Russian total spend

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

-20%

-30%

-10%

Source: Global Blue Analytics

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Russian total spend

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

-20%

-30%

-10%

Crimean crisis

Source: Global Blue Analytics

The Chinese spending slowdown

20022003

20042005

20062007

20082009

20102011

20122013

20142015

20162017

20182019

2020 -

25

50

75

100

125

150

175

200

225

Chinese outbound travel growth 2002-2020M

illio

n tr

avel

lers

Source: Global Blue based on CNTA, Xinhua, UNWTO

Middle-class households in China by 2020 (MasterCard)

The Chinese spending slowdown

Not related to outbound travel

New tourism law

Anti-corruption storm

Full stop of official travel

Destination shift to USA / Australia

Change in travel purpose

Rise of FIT / decline of groups

Impacted W&J, boosted F&C

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Chinese spend on Watches & Jewellery

140%

120%

100%

80%

60%

40%

20%

0%

-20%

-40%

Source: Global Blue Analytics

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Chinese spend on Watches & Jewellery

140%

120%

100%

80%

60%

40%

20%

0%

-20%

-40%

Source: Global Blue Analytics

18th National Congress

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14

2012-2014: year-on-year growth rate of Chinese spend on Watches & Jewellery

140%

120%

100%

80%

60%

40%

20%

0%

-20%

-40%

Source: Global Blue Analytics

The Russian spending slowdown

The Russian spending slowdown

Rouble has been falling for a year

Russian spending down 8.5% in 2014

Economy was hit before the Crimean crisis

Crimean crisis impacts spending, not travelling

Outbound travel still steadily increasing 5%

Frankfurt and Milan mostly hurt in March

What can we expect for the future?

In 2014 we expect stronger tourist arrivals in APAC (and USA) than in Europe

Nation 2014 2015 2016

China 13% 13% 13%

Russia 9% 13% 15%

Japan 2% 3% 3%

Indonesia 8% 8% 9%

USA 2% 2% 2%

General outbound travel Europe-bound travel

Nation 2014 2015 2016

China 6% 9% 7%

Russia 5% 7% 6%

Japan 0% 0% 0%

Indonesia - NA - - NA - - NA -

USA 2% 2% 2%

Source: Global Blue based on CNTA, Xinhua, Euromonitor, TTG Asia, Jakarta News, Tourism Economics, UNWTO, PATA, TourMIS.

Travel growth from core markets still positive, with a stress on APAC

Major globe shopper currencies

to strengthen against EUR and

SGD

A better economic outlook, yet with

downside risks

Rise of middle-class in China, but with travel ban for officials and new

tourism law

Globe shoppers are a demographic, not a geography.

Is your company structured to harness their power?

Thank you.