Nearly 7 in 10 SEA consumers prioritise essential purchases due to inflation | Asian Business Review
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Nearly 7 in 10 SEA consumers prioritise essential purchases due to inflation

To cope with inflation, 69% are sticking to essential purchases, while 55% are cutting back on non-essentials.

Around 69% of Southeast Asia consumers were sticking to essential purchases, whilst 55% are cutting back on non-essentials to cope with the impact of inflation, according to an EY report.

The EY Future Consumer Index survey found that 89% of consumers, particularly in Indonesia, Thailand and Vietnam are worried about the increasing cost of living, particularly regarding utilities, fuel, groceries, and household essentials,

Fashion accessories (59%) topped the list of items SEA consumers are willing to spend less on, followed by toys and gadgets (47%), home furniture (45%), and clothing and footwear (45%). 

“The rising cost of living is hitting home for Southeast Asia’s consumers, who are concerned about realizing savings and are seeking ways to limit spending on non-essential categories,” said Olivier Gergele, EY Asean Consumer Products and Retail Leader, citing the need for businesses to reassess strategies amidst changing consumer behaviour.

ALSO READ: ASEAN consumer activity to moderate in 2024: report

Meanwhile, 77% of SEA consumers participate in major sales events whilst 71% delay some purchases until the next event.

Approximately 56% of consumers also prefer online shopping and only 4% prefer in-store shopping. 

Gergele urged traditional retailers to integrate online and offline shopping experiences through omnichannel strategies to succeed in the digital era.

The survey also revealed a lack of understanding and trust in artificial intelligence among SEA consumers, with only 19% claiming to understand AI well and 29% trusting AI-generated recommendations for promotions and purchases.

Moreover, SEA consumers are showing interest in eco-friendly habits but most believe that the responsibility lies with governments and companies rather than individuals.

Gergele also noted the need for companies to prioritize sustainability and integrate it into their operations. 

“In a landscape where sustainability and ethical consumerism increasingly shape consumer choices, companies must embrace these trends, align their practices with evolving consumer expectations and diligently work toward sustainable growth.”

The survey is comprised of over 22,000 consumers across 28 countries, including 3,000 respondents from SEA

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