When predicting the future, we must root our assumptions in the past/present. During the past decade, consumer spending in Asia-Pacific grew rapidly, the region now representing over half of the global consumer class, according to a report by The Brookings Institution. Furthermore, Asia-Pacific is set to add some 40% of new consuming class people by 2030. Yet, history does not repeat. There have been several key watersheds in recent years that will reshape the way Asia develops as a retail market in the future.
Pandemic lockdowns, soaring inflation, reduced economic growth, widespread pollution and climate crisis events are all shifting the background behind which Asian consumers frame their lifestyle choices.
What do consumers want now? The median of Mintel’s Global Consumer data across 13 markets in Asia-Pacific shows us a few key indicators. Since the pandemic and the rise in inflation, APAC consumers are looking to learn more things than they used to (78%), love trying new experiences (79%), are always on the lookout for things to make life easier (84%) and are actively seeking ways to reduce stress (81%).
The pandemic and inflation have helped to raise the stress levels, but Asians were already seeking more ways to achieve equilibrium. 80% of people in the region are actively seeking a more active lifestyle and 76% are making sacrifices for their long-term health. 77% are also trying to act in ways less harmful to the environment.
The upshot is that consumers in Asia-Pacific are increasingly focusing on ‘better’ rather than ‘more’. As the quality of life, spending power and life expectancy increase, more people will seek better, less stressful and less cluttered lives. They will seek more ways to stick to their budgets (76%) by investigating products and services more thoroughly before they buy. They are willing to exchange their data to help get better products but increasingly want brands to assure them that their data will be protected (82%).
The relationship with retailers will therefore shift. Expect to see more consumers coming to understand the value of their data to brands and seeking a more transactional relationship with those that serve them, demanding more back for the data they give. They will continue to shop increasingly online but will also seek out physical retailers for proof of the value of not just products, but also the service behind them. Human service will become more of a brand differentiator.
Sustainability will become an even bigger issue as the climate crisis manifests itself more blatantly in consumers’ lives. They will favour brands that can prove their ethical and environmental credentials. Ethics will become a key hygiene issue separating those that walk the talk from those that don’t.
Asia-Pacific’s consumer culture will diversify, forcing retailers to adjust to new expectations. Changes in the consumer environment have already created a culture where people are more open to new ideas, including a greater focus on wellbeing (including mental health), demanding more rights (for themselves, their families, communities and those around them, including animals) and shifting perceptions around identity. Gender identity fluidity, national, regional and cultural identities are all being overhauled. Aging is being re-examined as Asian societies get older.
In this environment, retailers will be required to ditch many long-held assumptions about who Asia-Pacific’s consumers are and what they want. A more intimate dialogue is needed between brands and consumers.
Retailers will rely even more heavily on technology and data to understand the shifting needs of people in the region, across markets, demographics, genders and ages. Identities will become even harder to pinpoint as more of the region’s consumers go into a wider array of virtual spaces via digital avatars, exploring further their identity not just in the real world but also in the virtual one.
This article originally appeared in Retail World’s 75th-anniversary issue.