Across Asia-Pacific, an already strong preference for digital, contactless consumption is rapidly growing and likely to continue unabated. The EY Future Consumer Index shows that the pandemic has disrupted consumer mindsets and priorities when choosing products, with shifts toward safer, healthier, and more trusted products.
More than 80% of consumers in China (81%) and Indonesia (86%) are more aware and cautious about physical health, in contrast to some countries in Europe, such as Denmark (46%), Norway (46%) and Sweden (44%). While Japanese consumers have become increasingly conservative, Chinese consumers, adopting a “Hibernate and spend” mindset, will pay a premium for products that promote health and wellness.
The sudden shift to safety and health has created a window for changing consumers’ brand loyalty. In the short term, it may be hard for some businesses to retain customers. However, in the long term, brands that satisfy changed consumer priorities can improve loyalty.
A prevailing trend toward frugality and a focus on value means sales of non-essential products are likely to keep falling. The exception is China, where lockdowns have been lifted quickly and the government has supported production and consumption through its “back to normal” strategy, with policies on cutting taxes and subsidies for prospective industries such as semiconductor, electric vehicle, display and other IT manufacturing. China also has the world’s largest middle class which continues to grow. Optimistic Chinese consumers show little propensity to reduce spending and a strong belief that their income level and purchasing power will increase for an extended period of time.
Corporate social responsibility has been thrust into the spotlight by COVID-19. Consumers overwhelmingly agree that a company’s behavior – its commitment to society and employees – is as important as the products or services it sells. Sixty-two percent of the consumers grouped in the “Cautiously extravagant” segment in the EY Future Consumer Index indicate they would be more likely to purchase from companies that they feel are doing good for society. This trend is likely to prevail as long as COVID-19 is a concern, cementing shifts in consumer mindsets.
Brands will do well to purposefully articulate company values and show their response to changing customer needs through every consumer touch point. As consumers move at scale to digital commerce, trust and transparency will be critical.
Source: EY Law article