Due to changing global demographics and unfolding financial and environmental concerns, consumption patterns have been evolving over the recent years, accelerating the shift towards more budget-conscious and eco-aware shopping. As changing consumer values and motivation drive different consumption pattens, to thrive in the global markets, businesses must cater to the more discerning, value-driven, and experience-seeking consumer.
This report comes in PPT.
Asia Pacific households are set to witness the fastest growth in real disposable incomes, driven by robust economic development, fast-paced urbanisation and widespread technology adoption. In addition to growing affluence in the region, the average wages of the lowest earners are expected to pick up considerably, especially in Bangladesh, India and Indonesia.
Due to economic and political uncertainty, short-term consumer spending in real terms will be sluggish, yet it is expected to pick up from 2024 onwards. Education expenditure is poised to experience the fastest growth in real terms over 2022-2040, driven largely by consumers from China and India, yet housing will jeopardise the discretionary spending and absorb the largest share of consumers’ budgets. Housing spending will grow at a faster pace than disposable income.
While value for money remains a top priority, consumers are also making the choices based on heightened and new-found values, motivations and expectations, such as convenience, sustainability and personalisation. Adoption of minimalism, marked by a shift towards digital and experience-orientated consumption, serves as another area where consumers see added value.
Consumers worldwide plan to increase their savings over the short-term period. Respondents from emerging countries prove to be the most frugal ones. At least two in three consumers in Nigeria, South Africa and the Philippines plan to save more money. Alternatively, significantly fewer respondents in developed markets plan to increase their savings - only one in three consumers in Spain and Italy.
As consumers look for products that offer the best value, they are willing to pay a premium for items that are high quality, eco friendly and can serve multiple purposes. However, increasing connectedness and information availability makes consumers more informed and more likely to flip between brands. Overcoming declining loyalty requires brands to foster a deeper connection with their customers.
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