SEA consumers spend less but invest on new needs: report

Respondents see unstable economy and high cost of living as reasons to spend less.

Nearly two in five Southeast Asian consumers were to be reducing their average spending in the past year, but respondents also see a redefinition of “needs” versus “wants,” a report found.

According to the joint survey conducted by Meta, Bain & Company and DSG Consumer Partners, consumers cited economic stability (63%) and cost of living (58%) as several of the main reasons to cut their expenses.

The largest drop in spending was seen in alcoholic products and electronics, whilst the food, personal care and wellness categories persisted.

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However, the report also noted that despite the reduced spending, consumers see their priorities shift, with regard to their perception of “needs” and “wants”.

Previously perceived luxuries like eating out in restaurants, buying branded apparel, and catching the latest gadgets are now recognised as new “needs.” Social media and streaming apps also landed as “essentials.”

This shift of “needs” versus “wants” indicates a road for a rebound of consumer spending, as Southeast Asian consumers are spending carefully on products and services of greater value.

The report also pointed to “insurgent disruptors” in the market as the drivers of this shift for value-dependent spending by SEA consumers.

“With ‘wants’ transitioning into ‘needs’ and dissatisfaction with what the incumbent brands provide, it is no surprise that Southeast Asian consumers are choosing insurgent disruptors to satisfy their unmet needs and evolving expectations​,” Sameer Mehta, Head of Southeast Asia at DSG Consumer Partners.