Asian consumers spend more carefully amid inflation pressures

CONSUMERS in Asia are spending more carefully as inflation continues to hurt purses, with the food, beverage and home care sectors driving growth in the third quarter of the year, according to a new analysis from Kantar.

“Shoppers are feeling the squeeze on their wallets and are using different strategies to adapt depending on the local economic situation where they live,” said the report.

While spending remained higher than a year ago, shoppers in the Philippines have recently taken steps to rein in their fast-moving consumer goods (FMCG) spending as they adapted to inflationary pressure. This is being driven by middle to lower-income homes and less-developed regions, with spending mainly on food and home care.

Asian economies continued to survive in the third quarter of 2022, with some markets enjoying growth. FMCG spending in the Asia-Pacific grew by 4.2 percent, which is higher than the three percent growth seen during the previous quarter. In mainland China, Taiwan, India, Indonesia and Thailand, people are shopping more often in e-commerce, but are spending less each time.

The food, beverages and home care sectors are driving growth this quarter, and growth tripled in the food sector due to significant gains in all Asian markets.

The report released in December gave consumption highlights across key Asian markets.

For Indonesia, FMCG growth is currently seven percent, the same level as Q3 thanks to the positive impact of Indonesia’s festive season. “However, looking at the long-term trend, consumer spending is starting to slow with people shopping less frequently and spending less,” said Kantar.

In-home FMCG consumption in Malaysia declined marginally as consumers adjusted their spending habits due to inflationary pressures.

In Thailand, reduced government support combined with high inflation has led to a drop in disposable income. “Shoppers are therefore becoming more careful about what they spend and buying a smaller number of categories and products and shopping around for better deals,” said the report.

In Vietnam, higher growth of total FMCG was seen in rural areas while growth is slowing in urban areas compared to Q3 last year when the fourth Covid-19 wave hit the hardest. (with PR)