Consumers at the heart of the ASEAN opportunity

According to consultancy BCG, Southeast Asia in 2024 is home to about 245 million middle-income consumers and a further 85 million upper middle-income shoppers.¹ As economic development continues, over 415 million Southeast Asian individuals are projected to fall into those definitions by 2030 – more than the entire population of the US.

Across the 10 ASEAN member nations, consumption is already a significant driver of economic activity. Final consumption expenditure accounts for over 90% of GDP in the Philippines, over 70% in Indonesia, Malaysia and Thailand, and over 60% of GDP in Vietnam.²

The growth of local spending power is supported by long-term structural trends. The ASEAN region benefits from positive demographics, with a young population and a growing workforce. The 15 to 34 age bracket comprises 213 million people and is forecast to keep growing until 2028, by which time millions of new workers will begin spending on goods and services.³

ASEAN consumption is also benefiting from regional integration. As it becomes easier for people and money to cross borders, spending on tourism, business services and e-commerce is increasing. Intra-ASEAN economies accounted for 42.4% of visitor arrivals in 2023.⁴

For ASEAN exporters, countries within the bloc are now the biggest source of international sales, with intra-ASEAN trade accounting for 22.1% of all exports in 2023.⁵

Local nuances

Accessing ASEAN’s consumer base has arguably never been easier. Across the region, local shoppers are keen users of e-commerce platforms and mobile apps, which act as a bridge between local consumers and regional and global brands.

Across the region, 75.9% have an internet subscription, and there are 128 cell phones for every 100 individuals.⁶

The digital economy in the six largest economies of the region – Indonesia, Thailand, Singapore, Vietnam, Malaysia and the Philippines – was worth an estimated USD218 billion in gross merchandise value in 2023 and is on track to reach USD600 billion by 2030.⁷

While the scale of the opportunity and progress of digitalisation are common factors across ASEAN, the region is far from homogenous.

In Thailand, for example, almost half of grocery shopping takes place in modern convenience stores and supermarkets. That compares to just 12% in Vietnam, where traditional mom-and-pop stores still dominate.⁸ Super-apps like Grab, which bundle multiple services into one interface, are increasingly popular. Indonesia boasts the most TikTok users globally, with 157.6 million users, ahead of 120.5 million in the US.⁹

Payment channels also differ markedly across the region, with digital wallets continuing to gain acceptance as real-time payment networks extend across borders. In offline retail, cash remains the preferred form of payment in five of the six biggest ASEAN markets, with the exception of Singapore, where credit cards are now the most common form of payment.¹⁰

“We’re seeing more businesses choose a banking partner that can support a range of payment channels across the ASEAN region.”

Businesses operating across borders in ASEAN also need to overcome a number of operational obstacles. Logistics is a particular challenge: reaching consumers across the region requires an expansive network of distribution partners and the ability to respond quickly to consumer demand in multiple locations. Consumer products must also be designed to meet local regulations – many of which differ between individual markets.

The potential of ASEAN’s consumer markets has also created a hyper-competitive environment, with local and global brands battling for market share. And on a macro level, a recent bout of high inflation and elevated interest rates has made consumers more price sensitive and weighed on demand. Policymakers are doing their best to keep consumers spending: in Thailand, the government in September 2024 rolled out a cash hand-out programme designed to boost consumption.¹¹