Southeast Asia is projected to welcome over 50 million new consumers by 2030, positioning it just behind India and China in global consumer growth. However, a recent report by Bain & Company and NielsenIQ reveals that the region’s fast-moving consumer goods (FMCG) sector has experienced stagnant growth since 2023. This trend persists despite steady GDP growth, with Singapore’s consuming class expected to remain at 6 million through 2030.
The report highlights that whilst economic growth is robust, consumer spending is lagging due to slower real wage growth and high household debt. Approximately 30% of consumers in Indonesia, Singapore, and Thailand report being financially worse off than a year ago, leading to more cautious spending habits.
Local and regional brands are gaining ground, now holding over half of the FMCG market value across the region, except in alcohol and baby care categories. This shift is attributed to hyper-localised products and digital-first marketing strategies. Meanwhile, consumer discovery is increasingly moving online, with 80% of consumers using AI in their shopping journey. TikTok Shop’s e-commerce share has notably doubled in a year, indicating a shift in consumer behaviour.
Praneeth Yendamuri, partner at Bain & Company, emphasised the need for brands to adapt, stating, “Consumer products companies can no longer rely on broad-based consumption growth or traditional definitions of premium and value.”
As the region continues to evolve, brands must navigate these challenges by reimagining consumer engagement and adapting to the rapidly changing retail landscape.
