Consumer sentiment is split in Asia Pacific

NIQ’s latest Consumer Outlook report reveals that within the Asia Pacific (APAC) region, 38% of consumers feel they are in a better financial situation compared to last year, while 30% of consumers have concerns about their financial situation.

Of the 30% of consumers who report being worse off this year, 77% report the increased cost of living as the source of their worsening situation, 41% attribute it to the economic slowdown, 32% to job insecurity or loss.

Despite ongoing financial concerns, 55% of APAC consumers are optimistic their financial situation will be better by the end of 2024. Consumers in the region continue to prioritize spending on groceries and household essentials, thereby maintaining a crucial foothold in the consumer market. Fresh foods and wellness products are at the top of the priority list, followed by home essential products, dairy, and fresh meat.

4 success strategies for 2024

NIQ’s experts recommend four key strategies for FMCG manufacturers and retailers in Asia Pacific to uncover opportunities and grow amidst opposing consumer sentiments in 2024:

Brands and retailers can expect heightened demand for emerging price tiers like affordable-premium, or super-discount, as financial polarization deepens and consumers seek to blend “affordability” with desires for proactive health, enticing innovations, and authentically sustainable options.

NIQ’s analysis shows a clear trend of price tier divergence within FMCG categories. Both mass-market or FMCG brands with a price index of 41-80 (+0.2pt) and luxury or FMCG brands with a price index greater than 201 segments (+0.1pt) are growing. Clearly communicating the value-for-money proposition is imperative, especially given current economic conditions.

While discretionary scrutiny has lessened in a few areas (for instance Clothing/Apparel saw a net change score of -19 in 2023, and today stands slightly improved at –17) the situation remains fairly stable from a year ago. The positive takeaway for FMCG: consumers will continue to prioritize their grocery and in-home spending.

And 2024 offers a few notable events, including the Olympics, Euro 2024 Football tournament, and more, that stand as opportunities to engage shoppers and boost sales.

While 49% of APAC consumers intend to maintain their usual spending on in-home entertainment, categories like beverages and snacks typically experience a surge in sales during these occasions.

Marketers can capitalize on global and local opportunities by aligning their strategies with current news cycles to remain relevant to consumer interests.

NIQ’s data confirms the crucial role innovation plays in driving growth— its impact is exponential. Companies with growth in innovation sales are 1.8 times more likely to achieve overall sales growth compared to those with stagnant or declining innovation sales.

Moreover, a significant portion (59%) of APAC consumers express openness to new or innovative products tailored to meet their health and wellness needs. Categories with notable growth potential/current growth include hydration products, respiratory health, and products related to adult nutrition and incontinence.

Discounters, traditional trade, and e-commerce platforms have consistently outperformed the market in terms of growth. 72% of APAC consumers indicate increased store switching to manage expenses, and 35% visiting Discount or value retailers more often in order to save. Consumers in China, India, South Korea and Thailand report that shopping online for deals is their top savings strategy.

With this in mind, understanding the channels that resonate most with shoppers and identifying successful categories in specific locations can significantly boost growth.