While Covid-19 may be among the most devastating of all black swan events to hit Southeast Asia, it by no means is the first and like previous crises in the world, it is introducing long-lasting changes to consumer behaviour and digital adoption.
As appeared in The Edge Malaysia Weekly &
Facebook Business.
Covid-19 has intensified the move online and serves as a catalyst for important changes. Online purchasing, digital consumption and average online basket size have all risen substantially and will continue to grow at record-setting rates, providing an opportunity for traditional businesses, large marketplaces and disruptive business models to thrive.
Worried consumers stockpiled basic goods during the pandemic, looking for value and trusted brands. They cut back on apparel and consumer electronics. And, in record numbers, they started buying online. Analysis of buying patterns of 8,600 consumers in six Southeast Asian countries found that while 47% of consumers decreased offline purchases, 30% increased their online spending.
This analysis helped to identify six critical themes in Southeast Asia among digital consumers who have made purchases online in the period of the last six months of 2020.
Home and contactless is here to stay: Southeast Asia’s digital consumers report that they intend to stay at home for shopping and leisure more than they did pre-Covid-19. The region’s consumers are 1.5 times less likely to dine out or visit a cinema than their counterparts in the US. Meanwhile, consumers in Southeast Asia are embracing innovative contactless services. Even in the region’s cash-dominant markets, contactless payment platforms have achieved high growth in both users and transaction volumes.
Discovery of new apps accelerates: The pandemic has opened the region’s consumers up to more options. Seventy-seven per cent of surveyed digital consumers tried a new app that they plan to continue using post-Covid-19.
Essentials are moving online: Consumers across Southeast Asia are spending more online during the pandemic, with essential goods such as fresh or packaged grocery accounting for many of their purchases. Roughly 83% of those shopping online said they are likely to continue their increased spending online after restrictions are lifted.
Indeed, during the current environment, at least 44% of digital consumers across Southeast Asia have spent more on packaged and fresh groceries online. This trend is here to stay. Among consumers who have been buying more since April, at least 80% indicated they plan to continue buying groceries online even in the future.
Indeed, during the current environment, at least 44% of digital consumers across Southeast Asia have spent more on packaged and fresh groceries online. This trend is here to stay. Among consumers who have been buying more since April, at least 80% indicated they plan to continue buying groceries online even in the future.
Value for money is a key consideration: Facing economic uncertainty, digital consumers now are more thoughtful about their purchases and are turning their backs on splurges and impulsive spending. Value for money is a key purchase criterion for 57% of Southeast Asia’s digital consumers. The effect differs by country, and is more pronounced in Thailand and Singapore, where ~70% cite it as a top consideration purchase.
Reliable brands are on the rise: 42% of digital consumers surveyed said they had bought more established brands in recent months. In addition to consumer trust, established brands have robust supply chains to ensure their products are available. That’s important because one out of three digital consumers in Southeast Asia will switch brands when they do not find preferred brands, according to a survey by Toluna, a global online research panel and survey technology provider.
Health and welfare top of mind: When asked to prioritise their purchasing criteria, 39% of digital consumers in Southeast Asia cited health and wellness as a top priority. In the Philippines, 81% of consumers said they are likely to be more health conscious in the future.
Consumer goods companies that come out of the pandemic the strongest will be those that have adapted quickly to these long-lasting changes in consumer behaviour and digital adoption.
For example, some companies have swiftly increased product availability and visibility online, targeted digital engagement across platforms or optimised pricing and value perception while offering a dynamic mix of stock keeping units. Some have focused on improving their supply chain resilience or adapting purposeful messaging and offerings. Others have redesigned their operating norms and consumer reach models.
As Covid-19 rewrites the rules, such flexibility will be a key for survival. Companies that view the pandemic as a catalyst for change and an opportunity to get closer to their consumers will maintain their footing and grow stronger in the recovery.
The pandemic has pushed consumers to adapt new habits and behaviours that are likely to continue in the long term. Gifting has also evolved according to the consumer needs. Digital Gift cards are the safest option that caters to all the safety norms in the gifting industry. From buying for self use to gifting others to motivating employees, channel partners with rewards, gift cards are the right tool for anyone, anywhere at any time. Digital Gift cards are not only used for gifting but also used to provide refunds, cashbacks and manage store credits which increases customer retention.
Explore more on gift cards and how it can help your business to digitalize, satisify and engage your consumer. Click here to know more on consumer promotions.