SINGAPORE, July 30, 2020 /PRNewswire/ -- ASEAN represents a dramatic consumption opportunity in the coming years, driven by four mega-forces: strong demographic trends; rising income levels; geopolitical shifts that are increasing foreign investment; and digital advancements opening new consumer markets. By 2030 there will be eight major consumption themes in ASEAN, including the doubling of consumption and the blurring of the boundaries between premium and value shopping. Some of these themes will be accelerated by COVID-19, including digital adoption and shifting retail channels. These are the findings of Bain & Company and World Economic Forum's report, Future of Consumption in Fast-Growth Consumer Markets: ASEAN 2030.
"As ASEAN continues its path as one of the world's most dynamic consumption environments, private and public-sector leaders will have to take shared accountability to ensure such consumption is inclusive and responsible. Even as we look to addressing the immediate challenges due to COVID-19, I am confident that strategic foresight from this report will contribute to inspiring action and realizing a prosperous long-term future for ASEAN with sustainable benefits for both business and society," said Zara Ingilizian, Head of Consumer Industries and Future of Consumption Platform, World Economic Forum.
ASEAN is the world's third most populous economy and is expected to grow over the next decade to become the world's fourth largest economy overall. Income levels are rising and regional gross domestic product (GDP) per capita is expected to grow by an annual 4 percent to USD 6,600 in 2030, causing many product categories to reach inflection points where consumption takes off. Domestic consumption, which powers roughly 60 percent of GDP today, is expected to double to USD 4 trillion.
"Over the next decade, ASEAN will see 140 million new consumers, representing 16 percent of the world's consumers, many of whom will make their first online purchase and buy their first luxury product," said Praneeth Yendamuri, Bain & Company partner and report co-author. "Yet, as this growth story plays out, public and private-sector organizations will need to address the immediate COVID-led health and humanitarian crisis and its implications."
Rapid digital adoption in ASEAN will continue, spurred by digital native consumers, investor funding in technological innovations and government programs to support digital transformation. By 2030, there will be nearly 575 million internet users in the region, and digital will be ubiquitous in the daily consumption journey. As digital reaches the rural and low-income communities, it will remove barriers that inhibit small business growth and enable delivery of basic services such as healthcare, education and financial services. The COVID-19 pandemic has highlighted the urgency in providing under-served communities with digital access for obtaining health-related information and ordering essentials.
As the consumption landscape evolves over the next decade, public and private-sector leaders will face numerous opportunities and challenges. To unlock the region's full potential, stakeholders need to get five things right:
"Consumer behaviors are fast evolving, with the young, urban, middle-class consumer of 2030 seeking personalized, value-for-money, social and integrative experiences across online and offline channels," said Mr. Yendamuri. "We will see each ASEAN market evolve differently and a 'multi-local' approach will remain key for companies hoping to win in this highly diverse region."
"2020 has been as a challenging year with uncertainties looming due to COVID-19. On the positive side, ASEAN is at a tipping point, both in terms of economic growth and in the human-centric development of its citizens. As the ASEAN growth story plays out over the long-term, accelerating public-private collaborations can unlock the full potential of the region to establish it as a hub of global trade and socio-economic development," said Mayuri Ghosh, Strategy & Public-Private Partnerships, Future of Consumption Platform, World Economic Forum.
Business, government and policy-makers will have increasing influence in the marketplace to guide the region towards a sustainable consumption future. Achieving this vision requires dedicated collaboration across stakeholders, through innovative and inclusive business models supported by a favorable policy environment. COVID-19 is the first of many trials that will add uncertainty -- and expose the weaknesses that need to be addressed. Public-private partnerships are critical to unlock the full potential of ASEAN and to safeguard its growth story as one of the three fastest-growing consumer markets in the world.
About Bain & Company
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About the World Economic Forum
The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. It was established in 1971 as a not-for-profit foundation and is headquartered in Geneva, Switzerland. It is independent, impartial and not tied to any special interests.
