In the diverse and dynamic region of Southeast Asia, a shift is taking place within the consumer landscape. Influenced by rising demand from consumers with increased spending power, greater knowledge and more sophisticated tastes, two major trends stand out — premiumization and sustainability — which are now requiring brands to consider both the environmental impact of packaging as well as how to keep products standing out on the shelf.
Premiumisation simply means the use of product traits and features to influence consumer perception, increasing their willingness to pay more for products or services. The key driver for this is the shifting economic power in ASEAN and a burgeoning middle class. It is projected that the number of middle-income and affluent households in economies such as Vietnam, Indonesia, and the Philippines will grow by 5% annually through to 20301.
This is coupled with population changes such as urbanization, increase in households without children and a more educated younger generation. Furthermore, the penetration of
Boston Consulting Group: How ASEAN Can Move Up the Manufacturing Value Chain (15 June 2021) - Source
Smartphones and the internet are also creating more knowledgeable consumers — who now have more ways to purchase personalised, niche products through e-commerce, regardless of location.
Fueled by all these changes, new consumer demand is emerging. As disposable income grows in the middle class, individuals are willing to pay more for products that offer quality, aesthetics, and a premium experience. However, their education and awareness are also developing when it comes to product selection and the environmental impact of the packaging they come in. As a result of a stronger sense of responsibility, consumer demand for more sustainable packaging options is accelerating.
Businesses are always seeking to appeal to consumers and keep up with their changing buying behaviors. This creates opportunities for the pressure-sensitive (PS) industry, a labelling technology that benefits brands through its versatility in design and the operational efficiency it enables, along with its capability to support sustainable packaging — a growing requirement. We will see a greater focus on how brands take advantage of such technology to innovate in both visually attractive and cost-effective sustainable packaging that connects to consumers.
On this journey of rapidly evolving industry trends influenced by consumer behavior and buying patterns, we can see a clear difference in the approach of global brands compared to local brands.