Five emerging trends among Southeast Asia's youth consumers

In general, Southeast Asian consumers are expected to behave cautiously for the rest of 2020, as the economic fallout from the coronavirus bites harder. Rising unemployment among young people may see prudence replace the previous spend-free mindset.

The WEF reveals that 58 percent of ASEAN youth consumers say lockdowns made them think more about budgeting, 56 percent evaluated their emergency savings and 31 percent want to improve their income.

Takeaway

The prolonged nature of the pandemic is denting consumer confidence. But this transitional period is prime time to research sentiment shifts among youth consumers undergoing spending constraints for the first time. Economists expect most Southeast Asian economies to rebound strongly in 2021, and youth consumers may be motivated by a pent-up desire to “revenge spend” on lifestyle products and experiences.

Southeast Asia’s youth consumers are early digital adopters. From e-gaming to ride-sharing and online shopping festivals to live streaming, they aspire to be at the cusp of new trends. This was evident pre-pandemic.

The Mintel Global Consumer survey in December 2019 revealed 97 percent of 16-24 year olds in both Vietnam and Indonesia had shopped online in the previous three months, and 89 percent (Vietnam) and 93 percent (Indonesia) used price comparison apps.

Takeaway

The convenience and safety of home consumption mean the frequency and volume of smartphone purchasing are likely to expand. The WEF says 87 percent of youths increased usage of digital tools during the pandemic. Indonesia and Singapore saw a strong boost in digital adoption, with over 50 percent of youths increasing eCommerce buying. Similarly, Bain & Co and Facebook research in six Southeast Asian nations reveal that while 47 percent of consumers reduced offline purchases during lockdowns, 30 percent spent more online.

More online shopping will redefine the range of products and services youth consumers choose, especially if they spend more time at home rather than going out and socializing. The WEF says 38 percent of surveyed youths used video streaming for the first time during the lockdown and 34 percent tried out food delivery services.

Meanwhile, 33 percent ventured into e-gaming and 13 percent experimented with telemedicine. Online buying also accelerated the shift toward digital payments, with 34 percent of youth consumers using an e-wallet for the first time.

Takeaway

With over 70 percent of Southeast Asian youths planning to continue buying online beyond the pandemic, and 58 percent saying they will use e-wallets more often, previously unexplored spending patterns may transpire. Retailers and brands will need to collate and analyze rich streams of behavioral data through the “New Retail” journey. These data sets can be used to build untapped paths for digital engagement with consumers, and forge partnerships with complementary brands.

Youthful consumers utilize social media in numerous ways, but its interactive powers of influence are undoubted. While reading new style innovations, peer reviews and KOL endorsements, young netizens are unafraid to share their own opinions about products and brand experiences.

Beyond the medium of engagement, 24/7 app interactions are fueling rising interest in social commerce and live streaming. Hybrid formats from China that combine virtual travel with entertainment and eCommerce also appeal to early adopters.

Takeaway

Southeast Asia’s social media ecosystem is a gateway to better understanding of how youth consumers respond to evolving “shoppertainment” trends. The WEF says 51 percent of the region’s consumers extended their social media usage during lockdowns, and 71 percent expect to further expand it in the coming months. Meanwhile, 18 percent of consumers became involved in online selling of products, and 53 percent expect to step up this activity in the future.

While 2020 will be remembered for movement restrictions and a fear of social interaction, youth survey respondents showed a desire to utilize the downtime positively. During lockdowns, 48 percent said they became more resilient, 41 percent learned new skills and 38 percent used the time to think creatively. Also, 31 percent researched new ways to improve their post-COVID-19 income.

Takeaway

A renewed strength of purpose and self-motivation, and the adoption of agile, entrepreneurial principles may be an unexpected outcome of the pandemic. The WEF report reveals that young consumers in Southeast Asia understand the challenges ahead. By undertaking online education and skills learning programs, they are preparing for a post-COVID-19 future, whether or not that will involve more home time and social distancing.