The consumer economy of Southeast Asia is in the process of being transformed by the rise of a new generation of ‘mass affluent’ consumers, according to a report by the Boston Consulting Group (BCG).
The consultancy describes this group as consumers with the incomes and intent to sharply increase their acquisition of premium and luxury products. In its report Beyond the “Crazy Rich”: The Mass Affluent of Southeast Asia, it puts their current number across the ten ASEAN economies at 57 million and predicts they will total 136m by 2030.
The mass-affluent class is set to account for 21% of the region’s combined population by 2030 on BCG’s reckoning – and about 45% to 65% of household wealth in markets such as Indonesia, the Philippines, and Thailand.
The study, based on a survey of around 6,000 affluent consumers and ethnographic qualitative research in six of the ten countries, found that most mass-affluent consumers are young and savvy.
Two-thirds are under 40 years of age, it said, and more than three-quarters have graduated out of the middle class within the past ten years having earned their wealth as salaried professionals or business owners.
“It’s important to set aside the typical Asian stereotypes: high-net-worth individuals who inherited their wealth or won windfalls in property and security trades and the lavish-spending ultrarich who are depicted in the movie Crazy Rich Asians,” BCG noted.
Already, the mass affluent account for roughly half of all spending in categories such as leisure travel, watches, and cars across the region. And many are still in the process of trading up to higher-value products in typically middle-class categories such as home appliances, food and beverage, and apparel.
“As the mass affluent replace the middle class as the driver of growth, the dynamics of Southeast Asia’s consumer market will fundamentally change,” said Aparna Bharadwaj, lead at BCG’s Center for Customer Insight practice in Southeast Asia. “This enormous market is important to virtually all consumer product companies, not only luxury brands.”
Interestingly, while this group is separated by language and cultural differences and geographical distance, its members frequently share similar values and preferences thanks to frequent travel and social media use.
They are “much more accessible than many companies think – and can be reached with a regional strategy,” said Vaishali Rastogi, a BCG senior partner who leads the firm’s businesses in Southeast Asia.
The consultancy describes this group as consumers with the incomes and intent to sharply increase their acquisition of premium and luxury products. In its report Beyond the “Crazy Rich”: The Mass Affluent of Southeast Asia, it puts their current number across the ten ASEAN economies at 57 million and predicts they will total 136m by 2030.
The mass-affluent class is set to account for 21% of the region’s combined population by 2030 on BCG’s reckoning – and about 45% to 65% of household wealth in markets such as Indonesia, the Philippines, and Thailand.
The study, based on a survey of around 6,000 affluent consumers and ethnographic qualitative research in six of the ten countries, found that most mass-affluent consumers are young and savvy.
Two-thirds are under 40 years of age, it said, and more than three-quarters have graduated out of the middle class within the past ten years having earned their wealth as salaried professionals or business owners.
“It’s important to set aside the typical Asian stereotypes: high-net-worth individuals who inherited their wealth or won windfalls in property and security trades and the lavish-spending ultrarich who are depicted in the movie Crazy Rich Asians,” BCG noted.
Already, the mass affluent account for roughly half of all spending in categories such as leisure travel, watches, and cars across the region. And many are still in the process of trading up to higher-value products in typically middle-class categories such as home appliances, food and beverage, and apparel.
“As the mass affluent replace the middle class as the driver of growth, the dynamics of Southeast Asia’s consumer market will fundamentally change,” said Aparna Bharadwaj, lead at BCG’s Center for Customer Insight practice in Southeast Asia. “This enormous market is important to virtually all consumer product companies, not only luxury brands.”
Interestingly, while this group is separated by language and cultural differences and geographical distance, its members frequently share similar values and preferences thanks to frequent travel and social media use.
They are “much more accessible than many companies think – and can be reached with a regional strategy,” said Vaishali Rastogi, a BCG senior partner who leads the firm’s businesses in Southeast Asia.
Sourced from BCG; additional content by WARC staff
