3 key trends are set to dominate consumer behavior in Asia in 2021, survey says
The coronavirus economic recovery, continued tech adoption and increased demand for health products are three trends set to dominate consumer behavior in Asia in 2021.
That’s according to new insights from consumer-focused private equity firm L Catterton, which has recorded an uptick in consumer confidence since the start of the year.
“Consumer sentiment is better now than it was back in January,” Chinta Bhagat, managing partner for Asia at the firm, told CNBC’s “Street Signs Asia” on Wednesday. “Though this is not over yet.”
In its latest consumer insights report, which surveyed more than 15,000 people in 16 countries globally, L Catterton found consumers in Asia are the most optimistic about the prospect of an economic recovery. The survey was conducted in February, prior to the recent resurgence in cases in India and some other parts of Southeast Asia.
More than one in 10 (11%) respondents in Asia said life was already back to normal, versus just 3% in the rest of the world. That figure was highest in China at 20%. Meanwhile, 43% said they thought the worst of the pandemic was over, compared with 23% in the rest of the world.
Bhagat said that continued journey toward recovery would be the main factor dominating consumer behavior over the coming year. However, he noted that two associated trends would also likely continue. The first being digitization and the shift to online.
A staff member wearing a face mask works at a pharmacy in Tonekabon, Iran, on April 26, 2021.
Xinhua News Agency | Getty Images
“We think this is more transformation than transition,” said Bhagat. “Some of the habits that we thought people would adopt during the Covid crisis are beginning to stick. There’s more stuff that’s going to be done more online than not.”
Meanwhile, health has become a “very big issue,” he said, highlighting increased demand for vitamins and supplements as a key indicator.
“Pretty much across the region, city by city, it’s the one thing that stood out as people are consuming more and are likely to continue to consume more,” he said.
Bhagat’s comments come as L Catterton announced its first strategic investment in Indonesia.
The company led a $56 million funding round in Social Bella, an omni-platform beauty start-up also backed by Singapore’s state-owned Temasek and venture capital firm Jungle Ventures.
Bhagat said the deal reflects the company’s conviction in Asia’s continued consumption and demand for multi-channel options.
“Our own view is in 10 years’ time you’re not going to have a single product business, everything’s going to be an experience, a product, a service all rolled into one,” said Bhagat.
“We’re not alone. I think lots of other investors see the same things that we do.”
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