‘Consumption, buying trends due to Covid to go on’

HOME-centric consumption and online buying trends accelerated by coronavirus measures look set to continue in the region, according to a research update from Bain & Company and Facebook, titled “Southeast Asia Digital Consumer Trends that Shape the Next Normal.”

Southeast Asia remains one of the most vibrant regions in the world, where internet users and digital consumers continue to increase simultaneously. This creates an environment in which traditional businesses, disruptive business models and large marketplaces could all thrive. While the region experienced varying levels of easing physical distancing measures over the past few months, it has also witnessed a significant shift and accelerated growth in the digital and e-commerce space.

“Companies and consumers have all been dealing with severe disruptions over the past few months” said Praneeth Yendamuri, Bain & Company partner and co-author of the report. “Moving forward, many would not be able to go back to old ways of functioning. While there are significant challenges we need to overcome, some of the digital leapfrogs we are seeing could also pose opportunities. Companies would need to ‘plan now’ to prepare for the structural changes tweaking their operating models, value propositions and consumer outreach.”

In last year’s report, “Riding the Digital Wave,” Bain & Company

and Facebook noted that the emergence of the digital consumer in Southeast Asia would drive companies to adapt their business model for a digital future. Moving into the second half of 2020 and “the next normal,” there are six emerging consumption themes in Southeast Asia for digital consumers those who have made purchases online in the last six months all of which have accelerated or reversed this year:

– ‘At home’ and here to stay. contactless

Consumption habits in Southeeast Asia have become more digital and homecentric the past few months as consumers are less likely to leave their homes. More than 70 percent of respondents across the region are now preparing food at home more often, while at least 65 percent are watching more on-demand and broadcast TV. Contactless innovations and behavior have increased. For example, contactless payments are increasing aggressively even in cash-dominant markets, and service providers and food service continue to innovate to offer contactless service options.

– Discovery of new apps accelerates.

Consumers are turning to digital devices to keep themselves entertained while indoors and across the region: 85 percent of respondents said they have tried new digital apps. Social media, video streaming, as well as messaging, experienced the largest increase in usage, while e-commerce and food delivery are experiencing spikes in first-time adoption.

– Essentials are moving online.

People staying at home increased the demand for essentials in the short term, both online and offline, with at least 44 percent of consumers across Southeast Asia spending more on packaged and fresh groceries online.

– Value for money is key consideration.

In the second quarter of 2020, there was a shift to valuefor-money purchasing across markets, as conservatism set in. Across Southeast Asia, 5W percent cite “value” as one of their top-three purchasing considerations.

– Reliable brands are on the rise.

Southeast Asian consumers are still open to trying new brands, with 40 percent saying they tried a different brand, last year. A consistent 40 percent are still willing to do so this year. Additionally, this year, 42 percent said they prioritized buying more from brands they trust.

– Health and welfare top of mind.

The past few months have prompted an increased focus on the health, safety and environmental impacts of consumer products. Nearly three-quarters, or W3 percent, of consumers say they are more likely to be more health conscious going forward, and more than half are increasingly environmentally conscious.

The combined research analysis is based on available YouGov survey data on digital consumer trends for April 2020 across Indonesia, Malaysia, the Philippines, Singapore, Thailand and vietnam, and interviews with close to 20 chief executive officers and venture capitalists in the region.

“Currently, businesses are facing very tough questions and trade-offs as we transition into the ‘next normal’ with home-centric consumption trends expected to prevail,” said Dhruv Vohra, industry director of Digital Natives & Technology at Facebook. “What’s clear is that designing for discovery via social and digital platforms would continue to be important and companies that are able to adjust strategies to meet the new consumer trends would be in a better position to weather through these challenging times.”

The changes to both consumers and companies pose new challenges, but they also present companies with the opportunity to fill gaps and help society redefine what this future would look like. Moving into the second half of 2020 and beyond, there would undoubtedly be more examples of these changes in both consumer habits and digital disruption as companies restrategize new ways of navigating the online e-commerce space.