Singapore’s tourism sector is showing signs of recovery following the COVID-19 pandemic, with 2023 tourism receipts reaching approximately US$24.5 to US$26 billion, surpassing earlier forecasts.

However, this still represents only 88 per cent to 94 per cent of pre-pandemic levels recorded in 2019. Despite the positive trajectory, socio-economic factors are expected to temper the pace of recovery. One such factor is the current process of GST refunds for tourists, where refunds are only processed upon their departure from Singapore, potentially resulting in revenue leaving the country.

Recognising the disconnect between the intended purpose of tax-free shopping and the tourist experience, utu, a Singapore-based company, seeks to revolutionise the tax-free shopping experience. By offering tourists the option to upsize their GST refunds instantly, utu aims to provide immediate value that can be used for additional purchases in-store. This approach addresses the limitations of traditional VAT refunds, allowing tourists to unlock the full potential of their refunds before leaving the country.

Partnering with retailers, travel rewards programmes, and exploring duty-free collaborations, utu aims to enhance tourists’ shopping experiences while benefiting local businesses and economies.

“We understand traditional VAT refunds can be limiting for tourists. That’s why we empower them to unlock the full potential of their refunds right away before leaving the country. We transform their VAT refunds into instant rewards – tourists still follow the regular tax-refunding procedures, but utu adds that extra layer of excitement,” says co-founder Ameer Jumabhoy in an email to e27.

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Transforming GST refund with utu

In recent years, utu has made several notable milestones, starting with its ability to weather through the COVID-19 pandemic, which affected the travel and tourism industries significantly. It has partnered with brands such as Qatar Airways, Singapore Airlines, and Accor.

utu has also introduced utu Privileges, a programme that allows tourists shopping in Singapore to upsize their tax refunds by up to 110 per cent of the Goods and Services Tax (GST) paid on their purchases. According to the company, this upsized refund can be used immediately to offset purchases at participating retailers, boosting sales and keeping tourist dollars circulating within Singapore’s economy.

“We’re still in the early stages, but utu Privileges has the potential to be game-changing. It’s designed to generate additional tourist spending, and retailers are seeing the value proposition. This product signifies a shift in how tax-free shopping can benefit everyone involved,” Jumabhoy explains.

“We built this model with a win-win mentality. I, like most people, am totally over subscription fatigue – my streaming bills alone are scary! With utu Privileges, we’re performance-based. We only earn a fee when our technology drives an additional sale for a merchant. No subscriptions, just a focus on boosting their bottom line.”

utu defines its primary users as everyday shoppers wanting to stretch their tax-free refunds further. “We focus on typical purchases – maybe a nice handbag, a wallet, or a pair of shoes – that represent the majority of tax-free spending,” explains Jumabhoy.

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The company has two main focuses for its user acquisition strategy: Collaborating with Travel Partners and Retail Partners to offer utu Privileges to their customers.

“We collaborate with major airlines such as Etihad, EVA Airways, and THAI, as well as hotel groups like Accor, to onboard their members onto the utu
platform. This lets them boost their refunds with miles or rewards points,” the CEO says. “Our retail partners such as La Martina and Coccinelle directly promote utu Privileges to tourists in their stores.”

Jumabhoy also stresses that while utu tracks its user acquisition, its true success measure is the transactions it drives. “That is when we know we have helped tourists get more from their shopping experience.”

Empowering travellers with AI

utu is currently run by a team of 50 from its offices in Singapore, Bangkok, Hyderabad, and Milan. According to Jumabhoy, the company’s global presence allows it to tap into unique perspectives and better understand the needs of its international partners.

It also counted SC Ventures as one of its key investors.

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When asked about their major plan this year, Jumabhoy hints about introducing a new AI-based tool to support its Privileges programme.

“This year, we’re focused on revolutionising the way tourists experience tax-free shopping. We’re about to launch a cutting-edge AI tool that will transform how our utu Privileges programme is used, making it even more seamless and rewarding. While we’re not primarily an AI company, we recognise the power of this technology to drive exceptional user experiences,” Jumabhoy closes.

“Additionally, we have several major partnerships in the pipeline that will extend the benefits tourists can enjoy with utu. Our goal is to create a truly connected journey, from the moment they shop to the moment they depart. Keep a close eye on our announcements – exciting things are on the horizon!”

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Image Credit: utu

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