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Consumption’s ‘sleeping giants’ about to wake up

Consumers in Southeast Asia are „sleeping giants” who will wake up to their full potential over the next 5-10 years, recent reports show. Robust consumption fueled by rising income levels and urbanization are expected to generate an additional $770 billion as 60 million people join the region’s consuming class or move into more affluent consumer

Consumption’s ‘sleeping giants’ about to wake up

Consumption’s ‘sleeping giants’ about to wake up

Consumers in Southeast Asia are „sleeping giants” who will wake up to their full potential over the next 5-10 years, recent reports show.

Robust consumption fueled by rising income levels and urbanization are expected to generate an additional $770 billion as 60 million people join the region’s consuming class or move into more affluent consumer segments by 2020, according to a study this month by Accenture involving more than 1,800 people in the region.

The formation of the Asean Economic Community (AEC), scheduled to take effect this year, will also enhance the attractiveness of Southeast Asia’s consumer markets by making it easier for companies to do business across borders. By 2020, the region could become a $3 trillion economy, making its mark as the world’s sixth biggest, Accenture noted.

„The spectacular growth of the Southeast Asian economy represents one of the biggest opportunities for consumer goods companies today,” said Dwight Hutchins, managing director in Accenture Strategy, Asia-Pacific.

Emerging hotspots

While the region’s „megacities” like Singapore are set to grow further, smaller emerging cities and rural areas are where the potential lie, according to a report released Monday by marketing research firm Nielsen.

Describing Southeast Asia’s consumers as „sleeping giants of the next decade,” Nielsen said the fastest growth is set to occur in mixed-density cities that have 1-5 million people, like Malaysia’s Johor Bahru and Cebu in the Philippines. Population in these cities are forecast to skyrocket 51 percent by 2025 to a combined 52.6 million people, compared with the 32 percent growth to 69 million expected in megacities.

Industrial cities, defined as areas with population of 500,000, are also forecast to be consumption hotspots. The size of the already-large cluster could increase 18 percent to 231.8 million over the next decade, accounting for nearly 63 percent of Southeast Asia’s total population, Nielsen said.

„As costs in bigger cities like Bangkok and Jakarta rise, businesses are going into second-tier cities with cheaper land and labor. This move has created clusters of industrial estates, especially in the smaller provinces of Philippines, like Lipa and Yogyakarta, which has a knock-on effect of stimulating local economies,” Regan Leggett, Southeast Asia, North Asia and Pacific regional director of client services at Nielsen, told CNBC.

The development of Southeast Asia’s smaller cities drive healthy demographic growth and a rising middle class, which transform consumer spending and offer „considerable rewards,” Nielsen added.

Challenges

Wooing Southeast Asian consumers, however, can be a challenge. According to Accenture, the region’s highly-connected consumers have minimal brand loyalty, with almost two-thirds of respondents open to switching brands. Meanwhile, a physically and culturally-fragmented landscape make Southeast Asia difficult to navigate.

Still, it’s not impossible for businesses to map out strategies applicable across the region.

For one, many rural consumers in the region are „at the very beginning of their relationships with packaged and branding goods,” and „finding commonalities across cities can be done,” Legget said.

Businesses must be ready to offer affordable pricing, smaller product sizes or single-use portions for these first-time consumers, he added.

 

#binzes #Indonezja #export #Azja

(source: cnbc.com)

„Wzrost gospodarczy w Indonezji wyniósł w 2013 roku 5.6%”


Ludność: 252 000 000


Powierzchnia: 1 919 440 km²


PKB całkowite: 870,3 mld $ *
PKB na osobę: 3510 $ *


Wzrost gospodarczy: 5.6% *


Stolica: Dżakarta (8,4 mln)


* Dane za 2013 r.

 

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