Gen Zs, single households to drive demand in SE Asia

MANILA, Philippines — Gen Zs and single households are expected to drive consumption growth in Southeast Asia, according to a report from global consultancy firm Bain and Co., Meta and DSG Consumer Partners.

The report that looked into emerging consumer trends in Southeast Asia, showed that Gen Zs and single households are influential groups that will fuel the rise in consumption in the region.

“Gen Z is an influential group due to size and growing spending power,” the report read.

Gen Zs, or those born between 1997 and 2012, make up 23 percent of Southeast Asia’s total population.

Gen Zs value individuality, authenticity and identity more than other generations.

They are also at the forefront of digital-first behavior and are highly engaged in the digital community.

Aside from Gen Zs, the report cited single households as another emerging demographic to look out for that will drive consumption in the region.

Single households currently make up half of the region and are growing at 2.4 percent every year.

This is driven by three key demographic groups such as the older singles who are investing more in products and experiences to enhance quality of life; ambitious young professionals who often delay marriage and parenthood and focus on their careers; and young urban migrants who are mostly in manual and service jobs, are sending money home and have spending power during off-hours.

Bain and Co., Meta and DSG expect growth in single households to be more pronounced in the Philippines, Thailand and Singapore, which are projected to see a 20-percent increase by 2030.

With the rise of the solo economy driving change in different sectors in developed countries, the report said Southeast Asia is likely to go through the same shifts.

As consumer needs and expectations change, the report cited the need for businesses to think and act differently.

Despite economic headwinds, Praneeth Yendamuri, partner at Bain and Co. said Southeast Asia has shown resilience and consumer sentiment is rebounding in most markets.

He said this provides an opportunity for businesses to address the needs of approximately 700 million consumers in a $4 trillion economy that is forecasted to grow 4.6 percent by 2030.

“To take the region to full potential, bold moves are required: relooking at your SEA (Southeast Asian) ambition by prioritizing, sequencing and most importantly funding them,” Yendamuri said.

“Companies should also form an obsession with local consumers and evolve operating models to be locally responsive - balancing the incumbent scale advantage and the disruptive insurgent mindset,” he said.