March Report 2019 Contents

intelligence March Report 2019 Contents Tax Free Trends Summary 03 Tax Free Sales Trends 05 Vietnamese Shoppers 06 Tax Free Sales by Destination and Source 07 Top 5 Visitor Nations per Destination Country 09 Currency Trends 11 Arrivals Forecast Europe Overview 13 France 14 United Kingdom 15 Italy 16 Spain 17 Germany 18 Austria 19 Finland 20 Portugal 21 Ireland 22 Czech Republic 23 Planet International Calendar 24 March Report 2019 Planet Intelligence | 2 Shopping & Arrivals Growth Summary - March 2019 Top 5 Destination Markets +4% Total Sales Tax Free Vouchers/ Avg. Transaction Arrival Sales Turnover Transaction Values (ATV) Numbers France +13% +6% +6% -5% Italy +2% +2% 0% +2% United Kingdom +1% -6% +8% 0% +1% Total Vouchers Spain -10% +20% -25% +4% Germany -11% -20% +12% +7% Top 5 Source Markets Tax Free Vouchers/ Avg. Transaction Arrival Sales Turnover Transaction Values (ATV) Numbers +4% Total ATV China -8% -23% +19% +13% USA +32% +19% +10% +8% Taiwan +26% +2% +24% +17% Russia -8% -10% +2% -4% +2% South Korea +19% +19% 0% -7% Total Arrivals March Report 2019 Planet Intelligence | 3 Shopping & Arrivals Growth Summary - YTD Top 5 Destination Markets +2% Total Sales Tax Free Vouchers/ Avg. Transaction Arrival Sales Turnover Transaction Values (ATV) Numbers France +6% -1% +6% -5% United Kingdom -1% -6% +6% +1% Italy +4% +4% 0% +1% 0% Total Vouchers Spain -1% +23% -20% +5% Germany -7% -13% +6% +3% Top 5 Source Markets Tax Free Vouchers/ Avg. Transaction Arrival Sales Turnover Transaction Values (ATV) Numbers +2% Total ATV China +1% -5% +6% +10% USA +27% +13% +13% +8% Russia -17% -14% -3% -7% Taiwan +36% +10% +24% +20% +1% South Korea +14% +14% 0% +1% Total Arrivals March Report 2019 Planet Intelligence | 4 Tax Free Shopping Sales Trends – March 2019 Overview China’s VAT cuts result in luxury March represented yet another positive month for Europe’s brand price reductions retailers, with Tax Free sales to international shoppers increasing by 4% compared with the same month a year As of April 1st, the Chinese Government reduced its ago. This marks the sixth consecutive month of growth and value-added tax (VAT) rate, in an attempt to stimulate a a 2-percentage-point growth rate compared with February. slowing economy. As a result, a number of luxury brands have already reduced their prices. Encouragingly, the current Tax Free landscape is in a much healthier state compared with this time last year, which Europe has been hailed by many as the “shopping outlet of witnessed an 8% decline in Tax Free sales. the world”, due to the continent’s lower cost of luxury goods relative to many other countries. However, with the prices France and Italy were this month’s highest performing of luxury goods decreasing in China – the world’s number countries, growing 13% and 2% respectively. French one Tax Free shopping nation - some retailers may fear this retailers will be glad to see positive Tax Free growth after could deter Chinese shoppers from travelling abroad in the ongoing political unrest driven by the Gilets Jaunes protests search for cheaper goods. negatively impacting retail sales in recent months. In a further effort to spark domestic consumption, Chinese Not every country has benefited from an increase in authorities have created a new four-day holiday in May, international shopper activity. Spain suffered a 10% decline which may result in increased international travel. in Tax Free sales, largely driven by a fall in average transaction value (ATV), which fell by 25% in March. This follows a However, not everyone is pessimistic about the new government-mandated reduction in the minimum Tax Free regulations. In January, data from investment bank UBS purchase threshold last year. Tax Free sales in Germany also found that product prices in China maintained a significant fell by 11%, as a result of declines in Chinese and Taiwanese premium of 30% compared with Europe’s prices – before spending after February’s Chinese New Year celebrations. any Tax Free saving is factored in. In addition, the euro’s weakness as a result of the downward Y/Y Sales Growth 2018 2019 pressure on the German and Italian economies has also 30% likely had an impact on price differentials. 25% March saw a slight decrease in Tax Free sales to Chinese 20% shoppers across Europe, but the 8% decline can largely be 15% attributed to Chinese New Year falling earlier in 2019 than 10% last year. 5% 0% -5% -10% 1. www.businessoffashion.com/articles/news-analysis/apple-louis-vuitton-gucci- JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC luxury-brands-drop-china-prices-as-vat-cuts-take-effect March Report 2019 Vietnamese shoppers’ spending power goes from strength to strength Vietnamese nationals are playing an increasingly The Planet Shopper Index, which uses Tax Free purchasing Despite this growth, Vietnam’s GDP per capita is still low, nd important role in driving global Tax Free sales. data and key economic measures including inflation, GDP ranking 132 out of the 184 countries measured by the growth and currency movement, tracks the spending power World Bank in 2017, highlighting the substantial wealth Although European retailers saw a 6% decline of the 25 most lucrative international source markets. The gap throughout the nation. However, GDP per capita in in purchases by Vietnamese shoppers in 2018, latest index saw Vietnam climb two places to 8th overall1. the emerging manufacturing powerhouse grew by an astounding 160%3 across the last ten years of available the ATV for Vietnamese shoppers has continued This rise in Vietnamese spending power seems to correlate data, with its latest quarterly growth measuring 6.9% to grow. The country’s average spend for March with the expansion of the country’s middle class. According year on year4. came in at a massive €1,036, and continues to to Boston Consulting Group, the number of middle class rank higher than the traditional big-spending citizens is expected to increase from 20 million in 2015 to 33 million in 2020, representing a 65% increase. nations of the United Arab Emirates, Taiwan This socioeconomic boom is being driven by the growth of 1. www.planetpayment.com/media/4306/planet-shopper-index_issue2_uk.pdf and China. the upper middle class, which is expected to double in size 2. www.bcg.com/publications/2016/globalization-growth-capitalizing-asias- booming-upper-middle-class.aspx In fact, the ATV for Vietnamese shoppers has grown by 14% from 5 million to 10 million within the same period2. The 3. data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=VN year-on-year for the past two years. As a result, Vietnamese average upper-middle-class Vietnamese spends 87% more 4. en.nhandan.org.vn/business/item/7309602-robust-production-fueling- shoppers have moved from the 27th highest-ranking country on international travel per year than the average middle- economic-growth.html in terms of ATV in 2017, to 17th in 2018. class citizen. [Chart] https://tradingeconomics.com/vietnam/gdp-growth Top 25 Countries - ATV and SiS mix % 2018 2018 ATV 2018 SiS mix Vietnam - Quarterly Year-on-Year GDP growth €1200 €814 35% 10% 31% 30% €814 €1000 €814 7.7% 8% €814 7.0% 6.9% €814 25% 6.7% 6.7% €814 €814 6.3% €800 5.8% 7.5% 7.5% 6.9% €814 €814 6% €814 €814 20% €814 6.6% €814 €814 €814 €600 €814 €814 5.5% €814 5.1% €814 €814 €814 15% €814 €814 4% €814 €400 €814 9% €814 10% 6% 4% 4% 2% €200 3% 5% 2% 2% 2% 2% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% €0 0% 0% USA UAE Qatar India Jul 16 Jul 17 Jul 18 China Russia Japan Israel Brazil Egypt Jan 16 Apr 16 Oct 16 Jan 17 Apr 17 Oct 17 Jan 18 Apr 18 Oct 18 Jan 19 Taiwan Kuwait Ukraine Canada Thailand Malaysia Lebanon Morocco Australia Vietnam Hong Kong Singapore Indonesia South Korea Saudi ArabiaSwitzerland March Report 2019 Planet Intelligence | 6 Sales Performance - March 2019 By Destination By Source Market FRA +13.1% CHN -8.3% ITA +1.6% USA +31.8% GBR +0.8% TWN +26.4% ESP -9.5% RUS -7.9% DEU -10.9% KOR +18.8% AUT +0.3% HKG -3.0% PRT +26.6% THA +0.2% CZE -6.1% KWT +20.4% CHE -2.6% JPN +25.3% IRL +13.2% UAE +25.1% March Report 2019 Planet Intelligence | 7 Sales Performance - YTD By Destination By Source Market FRA +5.7% CHN +1.2% GBR -0.5% USA +26.8% ITA +4.2% RUS -16.7% ESP -1.5% TWN +36.3% DEU -7.4% KOR +13.9% AUT +3.9% HKG +1.2% PRT +9.4% THA -0.6% CZE -1.9% KWT +10.0% IRL +8.5% JAP +21.4% CHE -14.1% UAE +4.1% March Report 2019 Planet Intelligence | 8 Top 5 Visitor Nations per Destination Country – March 2019 Top 5 Share ATV Y/Y Sales Top 5 Share ATV Y/Y Sales FRA CHINA 39% € 1,971 +17% AUT CHINA 23% € 669 -23% USA 9% € 1,416 +33% TAIWAN 11% € 619 +61% TAIWAN 8% € 2,677 +53% RUSSIA 11% € 442 -17% SOUTH KOREA 5% € 700 +4% SWITZERLAND 10% € 483 +11% HONG KONG 3% € 2,869 -17% UKRAINE 6% € 461 +27% ITA CHINA 22% € 1,026 -33% PRT CHINA 29% € 2,561 -6% RUSSIA 11% € 720 -8% BRAZIL 22% € 455 +48% USA 8% € 989 +26% ANGOLA 16% € 418 +33% SOUTH KOREA 8% € 763 +51% USA 5% € 1,746 +616% TAIWAN 7% € 1,030 +17% UAE 4% € 9,961 +349% GBR CHINA 17% € 443 -29% CZE TAIWAN 30% € 239 +12% KUWAIT 9% € 368 +20% CHINA 24% € 312 -22% USA 8% € 513 +31% RUSSIA 21% € 270 -12% UAE 6% € 732 +49% SOUTH KOREA 4% € 203 -22% HONG KONG 5% € 479 -13% UKRAINE 3% € 384 +18% ESP CHINA 29% € 618 -34% CHE CHINA 21% € 1,278 -26% USA 7% € 663 +23% RUSSIA 9% € 1,633 -7% RUSSIA 6% € 341 -18% THAILAND 8% € 1,438 +88% SOUTH KOREA 5% € 324 +69% USA 6% € 1,442 +28% ARGENTINA 4% € 211 -18% KUWAIT 5% € 2,347 +161% DEU CHINA 42% € 910 -17% IRL CHINA 38% € 449 -15% RUSSIA 9% € 630 -20% USA 33% € 144 +35% THAILAND 6% € 1,030 +20% CANADA 3% €

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