CONSUMERS in Southeast Asia are expected to keep their home-centric habits even when physical distancing requirements are lifted, a joint study by Bain & Company, Inc. and Facebook, Inc. found.
In their report “Southeast Asia Digital Consumer Trends that Shape the Next Normal,” Bain and Facebook said online buying trends that emerged from the coronavirus disease 2019 (COVID-19) pandemic are likely to outlive mandated social isolation.
“Companies and consumers have all been dealing with severe disruptions over the past few months. Moving forward, many will not be able to go back to old ways of functioning,” Bain Partner Praneeth Yendamuri, who co-authored the report, said in a statement on Tuesday.
The study is based on April 2020 data from a YouGov survey about digital consumer trends across Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. It also included interviews with about 20 C-level executives and venture capitalists.
The report identified six themes that shape new consumption habits, all of which companies must learn to adapt in what it called the “next normal.”
When quarantine measures were imposed in Southeast Asian countries on different dates during the first quarter, consumers were forced to resort to digital platforms for most activities, including consumption of essential goods. The report said this behavior is likely to stay.
“As businesses adjust to the new normal, this shift to online purchases has accelerated, mainly for essentials. People staying at home has increased the demand for essentials in the short term, both online and offline,” it said.
Affinity for digital platforms is also seen to grow, with most people being more open to discovering new applications. “Consumers are turning to digital devices to keep themselves occupied while indoors. As a result, the usage and adoption of different digital apps have accelerated and will likely continue,” the report said.
Not all applications may be getting an equal amount of attention, but those that are attracting most users are social media, video streaming, instant messaging, e-commerce, food delivery and digital payments platforms.
The pandemic also gave birth to the rise of value-for-money as a key consideration for consumers in making purchases. Specifically, it said more than half of consumers in the Philippines say they prioritize value in purchases when shopping.
“The trend is likely to continue, as Southeast Asians say they expect to be less materialistic, save more and take out more insurance in the new normal… [A]s a whole Southeast Asians are, on average, twice as likely to save more for a rainy day or take out insurance,” it said.
But while there is openness for new applications, the pandemic also set the stage for reliable brands to rise. “Southeast Asia’s digital consumers have always been open to trying new brands… This year we looked closely at the types of brands consumers buy — and they showed a strong preference for trusted and established brands,” it said.
It noted this behavior is largely driven by the ability of established brands to offer better availability and pricing. This fits perfectly with consumers who choose to buy by the bulk to reduce the need to leave homes.
And with COVID-19 still a very much active health issue, the report said health and welfare consumptions will remain the priority of Southeast Asian consumers. “In countries like the Philippines and Vietnam, consumers prioritize health and wellness or corporate social responsibility even more highly than value-for-money,” it said.
Lastly, the report said consumers in Southeast Asia are more likely to choose at-home activities long after physical distancing is required.
“Southeast Asian consumers adopt more favorable attitudes to working from home and use remote-presence apps more often. At least a third of respondents felt more productive when working from home and felt that doing so has improved their mental health and stress,” it said.
It noted companies have also adjusted to this better with the introduction and enhancement of contactless innovations. It specifically mentioned the increased adoption of Ayala-owned GCash, which it said recorded a 30% increase in transaction volumes since March.
“While there are significant challenges we need to overcome, some of the digital leapfrogs we are seeing could also pose opportunities. Companies will need to ‘Plan Now’ to prepare for the structural changes tweaking their operating models, value propositions and consumer outreach,” Mr. Yendamuri said.
“What’s clear is that designing for discovery via social and digital platforms will continue to be important and companies that are able to adjust strategies to meet the new consumer trends will be in a better position to weather through these challenging times,” added Dhruv Vohra, industry director for digital natives and technology at Facebook. — Denise A. Valdez