The youth consumer market in Southeast Asia has been snowballing over the past few years, with young people becoming critical players in the region’s economy. This demographic group, known as “youth consumers,” has unique characteristics and preferences that are driving new trends in the region’s consumer landscape.
Understanding youth consumer trends in Southeast Asia is crucial for startups in the region who want to tap into this market and stay relevant ahead of the competition.
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Rise of eCommerce
Since the outbreak of COVID-19, people have become accustomed to shopping online from the comfort of their homes. The World Economic Forum (WEF) reported that there had been a significant increase in the use of digital tools during the pandemic, particularly among the youth. This increase has mainly been attributed to the need for social distancing, which led to some shops and physical markets closing due to a lack of footfall or a failure to pivot and provide online options.
To stay in the game, retailers and brands must collate and analyse rich behavioural data streams through the “New Retail” journey. These data sets help build untapped paths for digital consumer engagement and forge partnerships with other brands. Using this information could help to bridge the gap between small businesses and larger competitors in the eCommerce space.
Using social media and influencer marketing
Social media is a powerful tool, particularly for young consumers, with its interactive powers of influence. While reading using new style innovations, peer reviews, and key opinion leader endorsements, young netizens are unafraid to share their opinions about products and brand experiences. Collaborating with micro-influencers who boast a smaller yet more committed audience could translate into superior engagement and conversion rates.
Influencer marketing offers the advantage of being a cost-effective approach with a higher return on investment. Given that many consumers regard influencers as credible and relatable, a survey revealed that 70% of Philippines respondents made a purchase based on an influencer’s recommendations. These influencers typically have a more niche audience and can help businesses to reach specific demographics. By encouraging users to share their experiences with their products or services on social media, companies can create a sense of community and promote brand loyalty among their customers. This approach works particularly well with younger buyers.
Tapping into the mobile gaming industry
Mobile gaming is a massive industry in Southeast Asia, with the region’s young people spending an increasing amount of time and money on mobile games. Statista states that the gaming industry revenue will likely hit USD 315.90 billion in 2023. Several factors contribute to the rise of mobile gaming in Southeast Asia, including the widespread availability of affordable smartphones and mobile data plans and the region’s young and tech-savvy population.
The mobile gaming industry has also opened new opportunities for businesses and advertisers to reach young consumers. In-game advertising, for example, has become a popular way for brands to engage with mobile gamers and promote their products or services. With their massive reach and the high level of engagement among players, in-game advertising can effectively reach a large and captive audience.
eSports competitions and events are another way to engage with Southeast Asian gamers, providing a platform for businesses to showcase their products and services to a highly targeted audience.
Going cashless with digital payments
The digital payments industry is proliferating and will likely continue to do so in the coming years. The total transaction value in this sector in Southeast Asia should reach over USD 221 billion by 2023, with an annual growth rate of 13.91% until 2027. The use of digital payments has seen a surge in popularity among young consumers, becoming one of the most preferred payment methods by many. eWallets, such as GrabPay and GoPay, and mobile banking apps from traditional banks are some of the most popular digital payment methods used by the younger population in the region.
These payment options provide users with features such as simple top-up options and lucrative cashback rewards, making them a more appealing choice for young consumers. Consequently, businesses that adopt digital payment options are more likely to attract younger consumers who favour the convenience and security of cashless transactions than older consumers.
The youth consumer market in Southeast Asia is a significant force that businesses should pay attention to if they wish to thrive. With their increasing purchasing power and unique preferences, youth consumers are driving new trends in the region’s consumer landscape, and businesses must keep up with their changing preferences to stay relevant.
From the rise of eCommerce to the growing demand for sustainability, the youth consumer trends in Southeast Asia, while complex and multifaceted, are heavily impacting almost all sectors. By understanding these trends and adapting strategies accordingly, businesses can unlock the vast potential of this market and build long-term success.