- POSTED: 08 Aug 2014 22:20
- UPDATED: 08 Aug 2014 23:37
Numbers from global tax refund provider Global Blue show that tourists from China are not spending as much on shopping in recent months and there are concerns that this could be a further squeeze on retailers in Singapore.
SINGAPORE: About 780,000 Chinese tourists visited Singapore in the first five months of this year, according to figures from the Singapore Tourism Board - a drop of about 27 per cent compared to the same period a year ago. Industry players cited a variety of reasons for the dip, including the protest in Thailand, fallout from the MH370 incident and new travel rules imposed in China last year.
This drop has affected retail sales. According to its tax free shopping transaction records, Global Blue said that Chinese visitors accounted for 40 per cent of total spending in Singapore in the first two months of this year, with an average spend of 1,031 euros (S$1,728) per person.
Sales during the period rose by 13 per cent year on year, but the numbers have gradually declined throughout the next few months. For the January to May period, Chinese visitors made up 35 per cent of total transactions while total sales was up by just one per cent compared to 2013. The average spend has also fallen to 994 euros (S$1,665).
Mr Stefan Ellrot, Country Manager of Global Blue Singapore, said: "The money is still there. We just need to bring the people to Singapore and spend in Singapore. The first wave is definitely over. The first need to buy the Rolex watch, to buy the Cartier jewellery is over. Now they are not coming to buy two or three pieces, they are buying one piece and with the anti-bribery and corruption law taking place now in China, it does not allow tourists to bring back a lot of presents for officials or friends."
There are concerns that any further decline in visitor arrivals or spending will heap more pressure on retailers' sales. Mr Kesri Kapur, Honourary Treasurer of the Singapore Retailers Association, said: "In retail, if even a single digit drop of 1, 2 or even 3 per cent store-on-store and like-for-like happens, it means retailers are further sinking into the red. With overheads going north and a reduction in consumption, it is a double whammy for the retailers."
In recent years, retailers have had to deal with challenges like higher rentals, manpower shortage as a result of tighter foreign worker policies, as well as rising competition from e-commerce sites.
Figures from STB show that in the first quarter of this year, tourism receipts from shopping fell 6 per cent on-year. This decline was, however, offset by an increase in spending on other segments such as sightseeing, entertainment and gaming and accommodation. Overall, tourism receipts from international visitors rose 5 per cent to S$6 billion in the first quarter.
Despite weaker tourist arrivals in recent months, MasterCard said visitor spend - on items like hotels, air tickets, mail order and retail products - remains fairly healthy.
"MasterCard spend by international visitors to Singapore in first half 2014 grew by 8 per cent compared to the same period last year. If you look at MasterCard transactions by international visitors, that grew by 23 per cent," said Mr T V Seshadri, Group Executive of Global Products & Solutions in Asia Pacific, Middle East, and Africa for MasterCard.
MasterCard also said that spending from tourists during the first month of the Great Singapore Sale - which started on May 30 - grew at a higher rate of 5 per cent compared to the previous year's 1.6 per cent, to hit nearly US$255 million.