SINGAPORE – Media OutReach – October 10, 2023 – Meta, Bain & Company, DSG Consumer Partners, launched their annual report
SYNC Southeast Asia Report “Bold Steps: Leading the Next Wave of Consumption Growth in Southeast Asia” Today. The report reveals insight into Southeast Asia’s evolving consumer landscape and how this diversity presents significant opportunities for businesses in the region, both in the short and long term.
A new hierarchy between needs and desires emerges
39% of consumers surveyed in Southeast Asia reported a reduction in their average spending over the past year, citing top concerns around economic stability (63%) and cost of living (58%). The largest drop in spending was seen in the alcohol and electronics sectors, while the food, personal care and wellness categories remained resilient.
However, the report observes that despite reducing spending, consumers are reprioritizing what they perceive as needs over wants. The previously mentioned luxuries, such as eating out every week, designer clothes and the latest gadgets, have become what consumers perceive as new “needs”. Regardless of income level, social media was cited as the top essential category, and streaming emerged as a growing essential category.
Gen Z and the solo economy are important cohorts to engage
According to the report, Southeast Asia’s working population is expected to increase by 24 million people by 2030. With rising incomes as well as the growth of the middle and upper class, the region is moving closer to a consumption inflection point that will accelerate the trajectory of consumption. growth in consumption. Two consumer segments in particular are driving this growth: Generation Z and single households.
Generation Z currently makes up 23% of Southeast Asia’s total population, while the individual economy, made up of individual households, is growing and driven by three key demographic groups: older singles, young people professionals and young urban migrants. Changes in household size are expected to be more pronounced in the Philippines, Singapore and Thailand, where the number of single households is expected to increase by 20% by 2030.
“Southeast Asia, as a region, has shown resilience in the face of the global slowdown and consumer confidence is rebounding in most markets. This is a great opportunity for businesses to meet the needs of approximately 700 million consumers in a US$4 trillion economy that is expected to grow by $4 trillion. 4.6% by 2030 (compared to 2.7% globally). EES has repeatedly demonstrated its importance as an integral part of investors’ portfolios with global valuation and significant impact on profits and losses. To exploit the full potential of the region, bold measures are necessary: rethink your HEI ambition by prioritizing them, sequencing them and, above all, financing them. Companies should also become obsessed with local consumers and evolve their operating models to be locally responsive – balancing the incumbent’s scale advantage and disruptive insurgent mindset,” said
Praneeth Yendamuri, partner at Bain & Company.
According to the report, Generation Z values individuality, authenticity and identity more than other generations. Generation Z is not only digitally centric, but they are also highly engaged in the digital community, messaging businesses an average of eight times per month, and 82% of respondents say they are part of a community in line.
AI Powers Personalization Across Generations
While Generation Z is at the forefront of digital-first behaviors in Southeast Asia, older generations are quickly catching up and are not far behind in experimenting with new technologies. As all generations in the region spend more time online and experiment with new technologies such as AI, virtual reality and health technology, it will affect how businesses in Southeast Asia can interact successfully with consumers.
This report identifies how companies in Southeast Asia are beginning to use AI for marketing purposes and to address region-specific issues, such as diversity in languages, cultures and preferences. “AI enables better experiences for people and better outcomes for businesses. At Meta, we combine our AI-powered discovery engine with the social connection that has always been at the heart of our platforms to deliver more relevant, entertaining, and relevant content. experiences adapted to the local level. With new tools capable of making a big impact, it’s no surprise that marketers across Southeast Asia are already starting to rely on AI to drive greater engagement and performance. impactful,” said
Benjamin Joe, Vice President, Southeast Asia and Emerging Markets at Meta.
Looking ahead, the report found that 73% of business leaders surveyed recognized the opportunities presented by AI, but also admitted that they were not ready to seize them. The report suggests that a focus on personalized marketing and investment in AI-enabled tools to facilitate personalization at scale will enable businesses to effectively reach consumers in Southeast Asia and to generate a strong return on investment. “Adopting AI is now more crucial than ever for businesses wanting to thrive in Southeast Asia’s ever-changing digital landscape. »
Mr. Joe said.
Dawn of the Insurgent Disruptor
Defined as new-to-market brands with revenue growing five times faster than their category growth rate, disruptive insurgents are now responsible for $52 billion in revenue in Southeast Asia alone and accounted for 23% market share in 2022. Main categories where Insurgent disruptors have managed to gain market share, notably in the areas of beauty, personal care and packaged foods.
“Insurgent disruptors are new brands less than 10 years old that have demonstrated strong market share growth. With the shift from “wants” to “needs” and dissatisfaction with what legacy brands offer, it’s no surprise that Southeast Asian consumers are choosing insurgent disruptors to satisfy their unmet needs and ever-changing expectations,” said
Mr. Sameer Mehta,
Head of South East Asia at
DSG consumer partners.
For more information, read the full report online here: https://www.facebook.com/business/m/sync-southeast-asia
Hashtag: #Meta #Bain&Company #DSGConsumerPartners
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