Inflation Impacting Digital Spending In Southeast Asia: Survey

The pandemic, rising cost of living, energy crisis, geopolitical unrest, and climate crisis have all taken a toll on everyone, and with people moving from crisis to crisis in recent years, interesting shifts in consumer shopping behaviours have been observed in Southeast Asia (SEA).

90% of polled Southeast Asians have cut down spending or reduced household costs in the last six months to manage the impact of soaring inflation, according to Blackbox-ADNA’s latest study—Inflation & Shopping in the Digital Age, which covers more than 9,000 adults across Singapore, Malaysia, Thailand, Indonesia, Vietnam, and the Philippines.

The study reveals that higher-income shoppers in the region are more insulated from inflation and are less likely to alter their shopping behaviour. However, as retailers – both online and offline – prepare for the upcoming holiday season, they must grapple with consumers pulling back on discretionary spending to focus on essentials.

The study shows consumers in the region taking various actions to save money or cut costs in the last six months: 25% say they are eating cheaper meals at home, 25% are cutting back on out-of-home dining/ going to restaurants, 24% are buying more items on discount, 12% are purchasing from cheaper brands, and 12% are cutting back on food delivery to home.

Commenting on the study findings, Nishant Kaushal, Global Head of Data, Strategy and Solutions of ADNA, said: “This study quantitatively validates what many of us feared – across Southeast Asia, inflation has impacted most of the population with only the affluent spared. The populace across the six countries is taking active steps to cope with the household budget-balancing challenge by cutting down on discretionary spending and hunting for savings on the necessities.”

Online shopping too has not been spared by inflation and digital spending in Southeast Asia has taken a hit in 2022. While Southeast Asians are still shopping online, they reported that their overall proportion of online/digital purchases this year has decreased by 9% compared to 2021.

Reflecting on regional digital spending, David Black, CEO of Blackbox Research, said:“Our study results show that not even e-commerce has been spared by the recent onslaught of high inflation. The rapid rise in digital spending across Southeast Asia that we saw during the pandemic now faces a reality check. Moving forward, competition is going to intensify and stronger value propositions from e-commerce platforms will become much more important.”

Rising inflation and rising interest rates are collectively making 67% of Southeast Asians more anxious about the current economic scenario than anything else. In markets such as Singapore, Vietnam, and Malaysia, this figure rises to 81%, 80%, and 71% respectively.

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