To Win in Asia, Think Like An Asian Consumer
Asia carries more weight than any other market in the world for the simple reason that it houses 4.7 billion people or 60% of the world’s population. That alone makes it a market with a massive middle class, a huge working populace, the largest Gen Z pool, the most coveted talent hub, and booming entrepreneurial ecosystems.
However, Asia is far from being a single market, and can’t be considered as one. From mature economies like Japan, South Korea, and Singapore to rapidly developing ones like China, India, and Indonesia, Asia has multiple high-potential markets that differ vastly in culture, shopping behaviour, consumer preferences, and disposable incomes. Each of these markets comes with its own unique set of nuances.
Despite the tremendous geographical, religious, and economic diversity, as we decode the psyche of Asian consumers, we can see a few common foundational themes that run across multiple Asian markets.
Brands can leverage these underlying trends to connect with Asian consumers at a broader level, before tweaking their strategies further to fit a particular market. Let’s take a look at what makes the Asian consumer truly unique.
1. Value-Conscious Consumers With A Flair For Aspirational Buying
Asian consumers are increasingly becoming value hackers- discerning shoppers who seek quality products at reasonable prices. Constantly comparing prices, reading online reviews, and opting for a channel that gets the best deals without compromising quality is now second nature. In fact, according to Euromonitor International, Asia Pacific has the highest savings ratio compared to other regions globally (25% in Asia vs 3.6% in the US). This budget-consciousness stems from the region's economic uncertainties and rising costs, in addition to its inherent financially conservative mindset.
On the flip side, Asian consumers in developing economies like India, China, and Southeast Asia show a significant willingness to spend to improve living standards and invest in quality products and experiences. Many times, purchase decisions are heavily influenced by cultural emphasis on social prestige and esteem rather than purely functional considerations. This aspirational buying behaviour reflects a robust consumer optimism that contrasts with more conservative spending habits in other parts of Asia.
Retailers focusing on value-driven offerings and helping Asian consumers enhance their social status and reputation will have an advantage.
2. Collective Mindset & Trust Factor
Asian cultures, often characterised by a collectivist mindset, prioritise family and social groups in decision-making, contrasting with the individualism of Western societies. This emphasis on community has profoundly shaped consumer behaviour in the region.
The rise of group buying, particularly in China, exemplifies this trend. Initially starting with Pinduoduo in China, which capitalised on the power of collective buying, other major players like Meituan, Didi Chuazing, JD .com and Alibaba soon joined in investing in this shopping trend. This has been exemplified outside of China by Meesho, Dealshare in India, WeBuy in Singapore, Super, Dagangan in Indonesia and Aemi, Selly in Vietnam.
While group buying's initial fervour has tempered due to regulations and shifting market dynamics, its legacy underscores the importance of community in Asian consumerism. Even as digital commerce booms, Asian consumers still value physical experiences and social interactions.
This has transformed retail spaces into social hubs, where shopping malls and markets offer more than just goods – they provide spaces for connection. FairPrice's multi-format store in Singapore, incorporating dining and wine-tasting areas, exemplifies this shift towards experiential retail. Decathlon's experiential stores in Bengaluru, which cater to sports enthusiasts, further demonstrate this trend.
As the business model continues to evolve, we are now seeing social commerce firmly established as an important shopping format. Retailers' commerce platforms are bridging the gap between online communities and the need for offline experiences, thereby building trust and creating a more reliable experience that aligns with the preferences of Asian consumers.
Retailers who can execute these online-to-offline ( O2O) commerce models will have a headstart in gaining a larger share of wallets. Brands that invest in fostering a sense of trust and establishing credibility via recommendations, expert opinions, and influencers stand a better chance of retaining these consumers.
3. Shifting Loyalties- The Rise Of Brand Experimentation And Local Authenticity
Amid economic uncertainties and a persistent frugal mindset, traditional brand loyalty is waning among Asian consumers. This shift has fueled a surge in brand experimentation, particularly in countries with large youth populations like India and Indonesia. Consumers are increasingly seeking out new brands that offer better value, quality, novelty, and alignment with their values.
This evolving landscape has paved the way for local and culturally authentic brands to flourish. Across categories like food, fashion, and beauty, Asian consumers are showing a preference for products that reflect their heritage and local tastes. The rise of direct-to-consumer (D2C) brands, facilitated by reduced barriers to entrepreneurship and increased access to e-commerce, has further amplified this trend. These brands provide unique, relatable, and affordable options that resonate with local consumers.
While leveraging local preferences and tailoring better value-for-money offerings, most local brands rely on transparency and authenticity to connect with customers. But as challenger brands, continuous innovation and distinctive value propositions are crucial to capturing and retaining the loyalty of these increasingly discerning consumers.
4. The Rise of Conscious Consumerism- Health, Sustainability and Ethical Choices
The pandemic has significantly accelerated the rise of conscious consumerism in Asia, particularly among the region's vast youth population. With over 1.1 billion young people aged 15 to 29, Asia is the world's most youthful region, and these consumers are increasingly embracing a "Good for Me, Good for the Planet" value system. This translates to a strong preference for sustainable and healthy products, as well as a willingness to experiment with brands that align with their values.
A 2022 survey by Bain & Company found that 51% of consumers in Asia Pacific are health conscious, far more than in Europe (27%) and the US (31%). Given their family-oriented mindset, Asian consumers prioritise making healthier choices for themselves and their families, often considering sustainable products as a route to better health. While 90% are willing to pay a premium for sustainable products, trust in brand claims remains a barrier.
Sustainability is also a growing factor in brand switching, with consumers opting for more eco-friendly alternatives. In fast-growing markets like China, India, Indonesia, and others, awareness of environmental and social impacts on purchasing decisions is higher compared to more mature markets like Australia, Singapore, and Japan.
A rising number of slow fashion brands from China, India and Southeast Asia such as SiiZU, Ziran, The Terra Tribe, Good Krama and Mix Mitti have garnered a following among the younger generation for their positive impact on the environment and local communities. This burgeoning conscious consumerism is reshaping the retail landscape. Brands that prioritize sustainability, transparency, and ethical practices can capture a growing market of value-driven consumers.
5 . Mobile First Mindset- A Catalyst For Innovation.
Mobile devices are the dominant platform for online shopping across Asia, from emerging markets like India and Southeast Asia to mature ones like South Korea. Developing economies have often leapfrogged desktop internet, embracing mobile due to lower costs and easier access, with technology innovation leading to speed and convenience.
With 1.45 billion mobile internet subscribers and 2 billion 4G connections in the Asia Pacific in 2023, tapping the mobile-first mindset has become non-negotiable for brands to reach the masses. This mobile-centricity has spurred the evolution of innovative business models. Live streaming and social commerce have become immensely popular fueled by high social media penetration and influencer marketing leading to many platforms across every country in the region. Consumers are now able to discover, share and purchase products seamlessly across multiple channels.
Super apps, primarily concentrated in Asia, are another testament to the mobile-first mindset. WeChat in China, Grab in Southeast Asia, and Tata Neu in India offer a comprehensive suite of services through a single app, catering to various needs like ride-hailing, food delivery, and e-commerce.
The convergence of the mobile-first mindset with a preference for physical shopping experiences presents a unique opportunity for retailers & brands to engage with their shoppers while offering a unique buying experience
Navigating The Asian Consumer Landscape- Strategies For Success
Asian consumers represent a dynamic and evolving segment, reshaping retail with their unique preferences. They are omnichannel shoppers, balancing frugality with aspirational buying, and increasingly prioritizing health, sustainability, and local authenticity. Their mobile-first mindset has fueled the rise of innovative business models like live commerce and super apps.
For brands seeking to thrive in Asia, understanding and adapting to these trends is paramount. Here are key strategies for success:
Embrace OmniChannel: Provide seamless shopping experiences across online and offline channels, integrating mobile apps, websites, and physical stores. Leverage data to personalise interactions and offer targeted promotions.
Balancing Value with Aspirations Through Product Innovation: Asian consumers seek high-quality products at accessible prices, while also aspiring to premium experiences. Leverage technology to fast-track product innovation, developing a diverse range that balances affordability with quality, catering to both practical needs and aspirational desires. Focus on innovative concepts that resonate locally, while ensuring value at every price point.
Prioritise Local Authenticity: Develop products and marketing campaigns that resonate with local cultures and values. Partner with local influencers and creators to build trust and credibility.
Invest in Mobile-First Experiences: Optimise websites and apps for mobile devices. Explore innovative formats like live commerce and social shopping to engage consumers on their preferred platforms.
Champion Sustainability and Health: Demonstrate a commitment to environmental and social responsibility. Offer transparent information about product sourcing and manufacturing processes. Cater to health-conscious consumers with options that prioritize well-being.
By embracing these strategies, brands can effectively navigate the complexities of the Asian market and forge lasting connections with consumers in this diverse and dynamic region.
The key lies in understanding that Asian consumers are not a monolithic group, but rather a collection of individuals with unique preferences and values. By tailoring their approach to each market and embracing emerging trends, brands can unlock immense opportunities for growth and success in Asia.