BANGKOK: High levels of household debt have slowed consumer spending in Thailand but premium brands have not been affected, new research has revealed.
Consumer research business Kantar Worldpanel surveyed 4,000 households for its annual shopping behaviour survey and found that the current economic slowdown had hit rural Thailand and non-essential purchases hardest but upmarket brands had emerged unscathed.
On average, Thailand's 22.5m households made 4.1 shopping trips a week, with urban consumers setting out 3.3 times and rural consumers 4.8 times. And urban consumers spent 132 baht per trip, while rural consumers spent half that.
Kantar general manager Howard Chang noted that growth in the number of shopping trips had slowed from 7% to 3% in the year to July as the economy continued to struggle to recover.
He highlighted mounting household debt as an issue, even though rural Thais had cashed in on a rice-pledging scheme, where the government bought rice at a fixed price and then resold it, and the minimum wage had increased to 300 baht a day.
He reported that rural Thais had reduced purchasing of non-essential items such as hair conditioner, facial cleaner, mouthwash, laundry additives and toilet paper.
They were also buying less often and in fewer categories, reducing their quantity and paying less for different products, and seeking out more promotions and different channels.
"Thailand urgently needs the interim government to add money to the fiscal system such as cash coupons or infrastructure projects," he said, comparing the current situation to previous economic crises when recovery had been long and slow.
The good news, he said, was that premium segment had not been affected, and he urged brands not to delay new product launches. Consumers will pay for items once they understand their value from marketing pitches, he declared.
Separately, a conference devoted to e-commerce heard that this sector was growing at 20% a year as increasing numbers of consumers went online via mobile. Smaller businesses could benefit especially but would need to market themselves online in "at least" Thai and English and preferably Chinese and Burmese as well.
Data sourced from Bangkok Post, The Nation; additional content by Warc staff