Many of the shifts in consumer behaviour we have seen during the pandemic are here to stay – and this will have implications for brands and retailers.
Nelson Woo, Senior Director, Commercial, Asia, Worldpanel Division, Kantar
The outlook for FMCG in Asia in 2021 is positive. FMCG products are necessities, and for this very reason the sector will continue to grow. Even in markets that have been particularly challenged, a turnaround is expected – such as the Philippines, where value sales dropped -8% in 2020, but +3% growth is forecast1 for the coming year. The FMCG sector is also where governments will target their subsidies, to support people’s livelihoods as hardship continues to bite.
Lower trip frequency and bigger baskets will become the norm. We expect elevated trip spend to persist among shoppers in higher socio-economic classes (SECs), while consumption is likely to remain contracted among lower SECs.
Local giants have the advantage here, with the agility to rapidly change their pack and prices strategies. To compete, global brands must quickly enrich their brand portfolios with ranges and offers that are relevant to Asian consumers.
Forecast modelling considers Consumer Panel’s trended spending data, general and food inflation rates, residential mobility index, GDP growth rate and consumer confidence index. Macro-economic data as of February 2021.
Consumers will continue to rationalise FMCG spend, as inflation rises and life remains uncertain. Stocking up on everyday key supplies will continue, especially for families with kids.
Brands will face internal cost pressures but also limits on how far and how often they can raise prices. They must be able to accurately forecast demand amid abrupt macro changes, effectively manage various marketing and sales tools, and invest across different marketing levers for optimal ROI.
The desire for wellbeing will expand into younger demographics, making the prioritisation of ‘better self, better family’ a key trend across all age groups.
Individual differences will matter more in the post-pandemic era, making it vital for brands to understand what ‘health’ and ‘wellness’ means to different consumer segments.
Shoppers will buy in a more mindful way. The pandemic experience made consumers prioritise what’s really important in life, and rethink what’s essential. In future they will be more likely to think “Do I need that?” rather than “I want this!”. Consumers will challenge brands’ purpose. Brands must be ready with a proposition that is centred around shoppers’ needs, and messages that communicate key benefits clearly and simply.
Consumers will crave a stress-free home life. After juggling work and family commitments during the pandemic, consumers will seek to bring comfort and ease back into the home environment. Convenience-driven retail will thrive as a result. At the same time, uncertainty about the future will drive people to pursue ‘little happy moments’ in order to de-stress.
Brands that can meet the ongoing demand for convenience will earn the right to charge a slight premium. As consumers’ new digital habits stick, and FMCG’s online repertoire expands to more categories, O2O integration, the expansion of delivery services and the development of cold chain will all gather pace. Meanwhile, the desire for moments of self-pampering and indulgence will create opportunities for products in personal care and impulse food categories.
