Emerging Consumer Trends in Asia that Global Brands Can Learn from
By Ashley Dudarenok, Founder at Alarice
Global brands are starting to look at trends arising from the Asian consumer market, and for good reason. It is expected that consumers in Asia are to account for half of global consumption growth within the next decade. Besides the fact that Asian consumer markets are growing at an exponential rate, the markets are also diversifying and segmenting.
Asia is also leading in terms of e-commerce and fintech. This is especially true as China has contributed to more than half of the world’s e-commerce retail sales. The country’s sales value surpassed the combined total of Europe and the United States. In fact, the largest digital buyer population in the world belongs to China, amounting to more than 780 million people.
Consumers from other countries in APAC are starting to increase in digital consumers as well. According to a report from Bain & Company, Southeast Asia’s digital consumer population is predicted to reach around 380 million by 2026.
So now that we know that Asia is the continent to look out for, what can we learn from the emerging consumer trends there? What else can we learn from Asia’s e-commerce sector?
Live E-Commerce becoming a standard
Livestreaming has been a huge mode for shopping in China for the past few years. In 2020, there were around 12.34 million people working as livestreamers in China, an increase of more than 350% compared to the previous year. The transaction value of Live E-Commerce in China had even surpassed 1.23 trillion yuan that year.
But what is Live E-Commerce? Live E-Commerce is where live streams that are held by bloggers or brands, feature all kinds of products. Viewers of the stream can interact through the chat function. The stream also has an “instant purchase” function where consumers can instantly buy the products being shown on the screen.
Live E-Commerce in China was purely driven by large KOLs such as Li Jiaqi and Viya. These streamers would give out product recommendations and the best prices online to their viewers, earning their trust. Chinese brands have also ventured into Live E-Commerce. Brands would choose someone to represent the brand and host the stream where they would put on a 3 to 8-hour Livestream trying to sell and entertain the viewers.
It is worth noting that Live E-Commerce has long passed being an e-commerce trend in China, but is instead now a standard for selling. Some trade schools in China have even started holding live-streaming lessons for trade professionals. Livestreamers are the salespeople of the future, and global brands need to start acting now to keep up.
India is starting to learn from China in this retrospect. There are big brands in India that have begun to adopt Live E-Commerce, aiming to also utilize this function as a standard for both selling and shopping online in the country. Live streaming functions have taken effect in multiple Indian applications already.
It is safe to say that the rest of the world and other global brands will begin to see this as the true future of selling online.
Community group buying is rising once again
While having gained a lot of popularity in China, countries like Singapore and Indonesia have adopted community group buying (CGB) as well. But what exactly is CGB? It is a trend that grew significantly in popularity during the pandemic in China when people were either on lockdown or quarantined. It allows a community, mostly people living in the same residential compound, to buy groceries and other essentials in bulk at heavily discounted prices. According to Credit Suisse, the CGB market is expected to reach 2.6 trillion yuan by 2025.
So while CGB has been in China for a long while already, it has begun to take shape in other Asian countries such as Singapore and Indonesia during the pandemic. To get CGB to work, consumers or entire communities are required to coordinate their orders and purchases on digital channels.
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So how are brands utilizing CGB? Let’s take a look at China. CGB is mostly used by people living in fast-developing rural areas. They are a growing consumer group in China, and companies have been trying to penetrate this market. Pinduoduo and Meituan, two popular online shopping platforms in China, have already used CGB to their advantage. They have provided a platform for people in rural areas to do CGB and have since successfully transformed the lifestyles of the people there.
Support for domestic brands
When the pandemic first hit the globe, a lot of businesses suffered from the lack of customers. So there was this drive for people to support their local businesses, governments had their hand in this drive as well. A report from NielsenIQ stated that 62% of FMCG sales in Asia came from local brands. The report went on to say that Asians tend to prefer buying local in order to support domestic brands.
We also see local brands winning in Asia because of the brands’ ability to better address consumer needs than their western counterparts. It also helps that products from domestic brands are relatively lower-priced and are drastically improving in quality.
This is part of the reason why Guochao (国潮) has been trending for a while now in China. ‘Guochao’, literally meaning National Tide, is a trend that refers to the increased support for local Chinese brands, designs and culture.
So what does this all mean for global brands? It means yes, there’s some competition. For example, domestic brands in China have within 3 to 5 years become strong competitors for global brands despite their ‘lesser’ quality. This is because these brands are particularly adept in marketing and have become agile in their strategy. A lot of these domestic China brands have also been recently eyeing to venture outside of China into regions like the Middle East or Africa.
Sustainability has started to be a concern
Just like the rest of the world, Asian consumers have started to show concern on whether their consumption habits are sustainable. This can range from using less plastic to consciously buying from more eco-friendly brands. A study conducted by GlobeScan in 2020 revealed that consumers all around the world show great willingness to make healthy and sustainable changes to their lifestyle. This trend is notably clear in Asia.
According to a study from Kantar, 58% of Asian consumers are said to be personally affected by environmental problems. The study found that a majority of Asians are most concerned about specific issues of water pollution, air pollution, and climate change. Concerns about social issues such as poverty, hunger, health and well-being were brought up as well.
Asian countries like China have started to implement environmental sustainability policies. China plans to hit its carbon emission peak before 2030. And we’re seeing this impact on Chinese consumers. Consumers in China have started paying attention to environmentally friendly packaging or any brands that promise a sustainable product. We even see fashion and cosmetic brands promising an eco-friendly experience to consumers that are highly conscious of this.
Preference for the premiumization of every purchase
Premiumization has been a trend in the Asia Pacific for a while now. It is not just about purchasing premium products and services. Instead, it’s begun to be more about having a new premium lifestyle, where every new purchase and item of the consumers has to have the highest quality. This can include items such as subscription services, food, drinks, etc.
Luxury is aspirational in Asia. Previously, premium goods were bought to look good before other people. It was a way for consumers to boost their social status. But the motive behind purchasing premium products has changed. Instead, consumers aspire to live a premium standard of living because they want to surround themselves with expensive-looking and nice things.
Most consumers today aren’t purchasing expensive items right away because they have massive amounts of wealth. Instead, they spend months to a year purchasing the expensive items. Under this trend, people will always want higher quality products and services to feel that sense of belonging and have a sense of an upgraded identity.
There is no end in sight when it comes to premiumization. The trend is still present to this day and will only continue to increase. Therefore, global brands need to pay close attention to this trend and plan their business and marketing strategies well in advance.
Asia has been ahead with digital developments in the e-commerce sector
As mentioned in the beginning, Asia is leading in terms of e-commerce and fintech. Asian countries such as China, Singapore and Japan have and are planning to set up wide 5G coverage in their countries, surely boosting the e-commerce sector at the same time.
A lot of Asian countries are also quickly moving towards a cashless society, opting for mobile payments instead. According to a report by fintech Boku and digital technology analyst house Juniper Research, one in two people will be using mobile wallets by the year 2025. A lot of merchants in China only accept payment by QR code through a phone instead of cash. The cashless approach adopted by virtually almost everyone in China is part of what makes e-commerce so successful in the country.
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We saw how and exactly why certain e-commerce trends have been emerging in Asia in recent years and how global brands are able to learn from it. Whether it’s tapping into rural communities through CBG or building up a sustainable image to attract environmentally-conscious folks in Asia, it is clear why the Asian consumer market is one to look at.