BANGKOK: Demand for premium products is on the rise among South East Asian consumers, recent data suggests.
Research by Nielsen into Asian consumer trends has revealed that the market share of premium grocery products in Asia – premium being defined by Nielsen as products priced at least 20% more expensively than the average price for the category – has grown to 16%, an increase of more than a fifth in just one year. It is also growing more than twice as fast as the value (+10%) and mainstream sectors (+8%).
Consumers in South East Asia are among the most confident in the world, especially those in the Philippines, Thailand, Vietnam and Indonesia. And Asia's emerging middle class is predicted to number more than 3bn by 2030, offering premium food and beverage brands a new class of shopper who were previously priced out of this market.
Growing wealth means consumers are increasingly willing to spend extra on high quality goods, but where they are paying more, they are also expecting better quality.
Manufacturers are innovating to leverage this trend: in the past year, premium products accounted for almost 20% of all new product development in Southeast Asia, and as much as 40% in certain categories.
Premium brands are growing fastest in Indonesia, at 42%, with Thailand (+24%) and Singapore (+17%) also experiencing more interest. Across the region, only Vietnam experienced a shrinking in high-end demand (-4%).
But it's not always an easy sell – South East Asian shoppers are more likely to purchase at the lower end of premium, which has seen brands take a conservative approach to pricing to build brand loyalty.
Data sourced from Nielsen; additional content by Warc staff