HONG KONG: FMCG brands can look forward to tapping into an estimated $770bn of new spending that is expected from wealthier consumers in ASEAN countries over the next five years, a new study has forecast.
According to Accenture, the global management consultancy, the ASEAN economy will be worth $3.1 trillion by 2020, making it the sixth largest in the world, while 100m people will join the consuming class or advance into wealthier tiers.
With so many consumers being enabled to trade up to premium products, this represents a great opportunity for brands to win loyalty in new growth areas, the report said.
This trend is likely to be enhanced when the ten ASEAN nations – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), the Philippines, Singapore, Thailand and Vietnam – establish the ASEAN Economic Community (AEC) later this year.
However, the report warns that success will not be delivered on a plate. Brands will need to engage these new consumers by delivering digitally-driven strategies while also overcoming logistical delivery challenges and competition from local rivals.
After analysing data from a variety of sources as well as conducting a survey of 1,800 consumers in six of the larger ASEAN countries, Accenture advised brands to adopt a three-pronged strategy.
They should lock in demand from new and more affluent consumers, ensure supply is only a fingertip away, and build an effective operating model, such as adopting a regional model focused on capability and value.
Dwight Hutchins, managing director of Accenture Strategy Asia Pacific, urged FMCG brands to move fast to take advantage of the opportunities on offer.
"The spectacular growth of the ASEAN economy represents one of the biggest opportunities on the planet for consumer goods companies today," he said.
"All that growth, however, means that markets are changing very quickly while digital technologies lift expectations for more tailored and engaging consumer experiences.
"Companies that hope to compete for new consumers must be bold and move fast if they are to take advantage. The best advice for CPG companies entering or expanding in the region can be summed up in four words – be aggressive, move now."
Data sourced from Accenture; additional content Warc staff