Changing demographicsand shopper behaviour
The population continues to move to urban areas,
while household sizes are shrinking. As people becomemore selective, brands must stay relevant.
Urbanisation is still a trend within Thailand, leading to a higher proportion of smaller households. Due to less government support and higher inflation, households of all sizes and at all life stages have cut their shopping frequency, spending, and the number of categories they buy. However, households comprised of younger singles and couples are still achieving growth in terms of sales value, but this has been driven solely by the demographic shift to urban living and smaller households.
Despite people becoming more selective when shopping, and cutting down on their purchases, some categories are still managing to grow in this difficult time. These have a few factors in common: they are relevant to outdoor living, they boost people’s health, or they have been impacted by high inflation but are still essential to consumers’ needs.
With inflation playing a big part in 2022, the categories that remain relevant to consumers’ needs will find it easier to encourage them to ‘trade up’ to a higher price per unit, or upsize to a greater volume. However, this does not necessarily result in positive sales growth. This is because consumers can leave the category or brand at any time – or cut their purchase frequency and volume – if they perceive that the higher cost is not worth the benefit it provides. This means that brands must understand consumers’ changing needs and stay relevant to them, taking into account the product’s role, pack size, and channel.
