In a time of widespread technological, environmental, cultural, and organisational transformation, people are looking to brands to guide them through change.
While APAC is generally financially optimistic, consumers in the region are now bracing for slower growth and a potential downturn. With a shift in priorities, we’ll be seeing a change in consumers’ spending habits, and in turn, shopping lists.
Using insights from our data partner GWI, we share some of the prominent changes in consumer mindsets and spending habits throughout APAC, and touch on how brands can appeal to them in 2023.
#1 Personal finances – Consumer finances affected by inflation & global events
Most APAC countries have seen a substantial rise in consumers who think their personal finances will get worse. In Australia, consumers have been hit by the cost of living crisis. 2023 has begun with an inflation rate of 7.3%, the highest in 30 years.
Although price rises don’t spell the end of consumer spending, APAC consumers are now bracing for the economic downturn and will be making changes to the way they spend.
- Most Chinese customers will either delay their purchases or bear with increased cost.
- Indian consumers will be on the hunt for cheaper stores to purchase the same item.
- Australian customers are open to buying a cheaper alternative or buying from a cheaper store.
- Singapore consumers are more transactional and open to the purchasing a cheaper alternative.
Brands should apply different marketing strategies based on consumers’ spending habits in respective markets. Price is a more important factor to affect purchase decision than before. There are upwards search volume for ‘dupe’ when there is new product launch from luxury designer brands, mainly due to the affordability of dupe. How can brands stand out in the intensive price competition?
Lululemon hosted a “Dupe Swap” at its store in Los Angeles, encouraging customers to bring in their knockoffs of its incredibly popular Align pants to trade in for the original. The brand launched this campaign as it is confident that Lululemon’s products are the best.
#2 Appealing to a changing mindset – Consumers lean towards what they know and trust
Consumers lack the mental space for keeping up with ever-changing fads and some are getting tired of chasing trends.
Consumers who are pessimistic about the economy are 22% more likely to prefer reliable brands and 15% more likely to prefer authentic brands.
APAC consumers want take their mind off the doom and gloom through humour and experience a sense of comfort and familiarity through traditional qualities they know and love. Being trustworthy also becomes especially important for brands.
Build a trustworthy and reliable brand perception is the key for customer retention. Social proof is an effective way to improve brand credibility and sends a clear signal that you are real and legitimate. For example, a brand can feature third-party aggregated reviews, and feature UGC content on social media. Another technique is to create impression of parallel real-time purchases, which is a good way to urge new users to make a purchase/booking.
#3 Travel and experiences – APAC consumers are splurging on travel
Apart from Chinese consumers, the APAC region is experiencing growth in international travel purchases year on year in reaction to the world opening up again post pandemic.
People are craving freedom, and the number of APAC consumers who say they’ve bought a vacation abroad or travel tickets in the last 3-6 months has grown by 32% since Q3 2021.
According to GWI, slightly less consumers in APAC consider value for money as the most impact on their travel decision after the pandemic, however, being able to visit friends/family has play a more important part.
With a third of APAC consumers making a New Year’s resolution to travel more in 2023, travel providers should show how worthwhile these trips are from an emotional connection purpose.
For example, Cleartrip reminds us that making memories is more important than shopping for material goods, and Trip.com shows us how easy it is to meet loved ones abroad again.
#4 What are consumers spending on? – Small luxuries consumers are willing to buy on a limited budget
When times are tough, people often try to cheer themselves up with little treats. 65% of APAC consumers admit that they make impulse purchases at least once a month. This desire to feel good when things are tough has opened up new opportunities for brands to reach consumers.
Over 20% of APAC consumers said they would purchase clothing, food delivery, electronics, and personal care items on a limited budget as treats. Clothing’s resilience is likely down to a combination of factors: more socialising, affordability, and emotional connection.
The need to feel good is arguably even more important during hard times. It’s really the emotional connection that keeps consumers hooked, and something brands need to emphasise more in their campaigns.
For example, Louis Vuitton has launched a #LVGifts campaign to help present their brand as a luxury gift-giving option for the holiday season. They have created a video revolving around the small moments of joy around preparing and participating in the holidays. The theme is both relatable and heartfelt.
#5 Purchase driver – Quality comes out on top
While price is important, it’s not always the wisest move to lower it – particularly for luxury brands. Decreasing prices could potentially reduce the aspirational power of a purchase, and even reduce trust.
Especially if consumers get to buy these products less often, many will want to know they’re buying quality items. 53% in APAC agree they’d rather buy from a luxury brand than buy multiple cheaper items.
Quality is the top purchase driver overall, so brands should hone their messaging around the quality and durability of their items, as consumers look to make their money count.
For instance, Miele has launched a brand new global campaign called ‘Quality Ahead of Its Time’ in 2021, underpinned by the company’s core values of craftsmanship, performance and sustainability. The campaign highlights the quality and durability of Miele products to make an important counterpoint to a throwaway culture.
Curious about the trends impacting your brand? Get in touch with our data and insights specialists here.