The trends shaping Asia Pacific’s future — and opportunities for those who put insights at the heart of their business.
1. Small Today, Big Tomorrow
The small brands of today are the big brands of tomorrow. And small spenders in small cities are the ones driving growth. We’ve covered how China’s middle class in tier 3 and tier 4 cities are growing more swiftly than tier 1 and tier 2. While prestige brands struggle to gain a foothold in smaller cities because of a lack of infrastructure, enterprising domestic players are chasing these consumers by bringing “international-standard” products to them at affordable price points.
Stocks for Hangzhou-based Proya Cosmetics Co. soared 88 percent during peak pandemic months, the highest among listed beauty companies globally and surpassing market leaders Shiseido Co and Estee Lauder. Fintech startup HelloGold offers a Shariah-compliant cryptocurrency, GoldX, to meet a gap in the market for Islamic financial contracts. The growth of homegrown and niche extends to India, Indonesia, and other burgeoning markets in Asia Pacific. Small, but digitally savvy players are engaging with Gen Z consumers, making quality products and services accessible to all.
An opportunity — for digital upstarts to disrupt incumbents, as costs to scale diminish.
2. Data Informs Every Decision
COVID-19 has transformed spending. In many markets, the shift in sales is the biggest change experts have seen in decades. The businesses that survive are digging deep into their data to make decisions, from store placement to pricing to supply forecasting. With external factors causing significant disruption and internal data about past productivity no longer a good predictor of the future, companies are also looking outside to figure out what’s going on, particularly when it comes to consumer behaviour and demand. Businesses are expanding their attention to customers, and people who aren’t necessarily their customers, to suppliers and their suppliers.
Our own experiences agree with these findings, and underscore the importance of looking beyond the top line numbers. Tools like Focus bring clients a granular understanding of consumer sentiments, understanding the “why” behind these trends and defining a clearer path forward in a challenging growth environment.
An opportunity — to challenge convictions with data, and insights.
3. Home Convenience, Home Consumption
The quest for convenience and safety is changing product and spatial design, with people spending more time indoors, making fewer trips to stores and larger purchases per trip.
And at-home consumption is growing. It’s changing food and grocery delivery, and how manufacturers package and distribute everything from yogurt to mattresses. Yum China (YUMC), who operate KFC, Pizza Hut and Taco Bell in China, are exploring new ways to reach homebound customers, with home delivery and takeout now accounting for more than 50% of revenues. They’ve tried everything that works. From meal kits, smart lockers for takeout, self-driving vans that serve breakfast to office workers and plant-based meals. Also on offer: a mega 1.5 litre bucket of bubble tea for home consumption. In Hong Kong, Deliveroo opened its third delivery-only Editions kitchen last year, and reported that exisiting Editions sites in Sai Ying Pun and Wanchai were seeing 100-per-cent year-on-year growth in terms of revenue and order volume. We’re overhauling how we eat, live, work and play — and there’s room for innovation.
An opportunity — to design human-centric, home-centric experiences for Gen Z and beyond.
4. We care about self-care
Health is reshaping our world — from workplaces and co-working spaces to retail, leisure, technology, architecture and design. Both startups and legacy players are innovating to create evidence-based products that tackle the gaps in current health and wellness offerings. And there’s promise of a more inclusive, accessible and affordable future, with more organisations turning their attention to sustainability and social impact.
Asian player CXA Group is helping companies shift spending from treatment to prevention by using AI to address employee-specific physical, mental, and financial health risks. CXA offers personalisation, cost-control and simplified administration — particularly relevant in our current climate. By future-proofing employee healthcare proactively, organisations can better weather the next disruption. Asia Pacific’s wellness economy is booming. Check out: Hong Kong’s Jou Sun, Sydney-based Sprout Stack and Singapore’s Sustenir for fresh, local, organic produce; Shiok Meats for lab-grown sea foods; and New Zealand based retailer Organic Initiative.
An opportunity — to put healthy, balanced lifestyles within reach of all.
Sustainability and innovation will shape the next 5 years
The World Economic Forum reports that 4 out of the top 5 most important skills of the future will relate to creativity and sustainability. While it’s impossible to predict how long pandemic-driven consumer behaviours will continue, consumer desires for transparency, sustainability, and wellness are evident. Covid-19 has given way to a wave of innovation across the world, from medicine to transportation. And technology will be a differentiating factor as AI, 5G, and cloud computing mature. Pivoting, repurposing and reinventing — businesses can thrive by identifying and serving the needs of consumers of the present, and the future.
Sustainability and innovation will shape the next 5 years The World Economic Forum reports that 4 out of the top 5 most important skills of the future will relate to creativity and sustainability. While it’s impossible to predict how long pandemic-driven consumer behaviours will continue, consumer desires for transparency, sustainability, and wellness are evident. Covid-19 has given way to a wave of innovation across the world, from medicine to transportation. And technology will be a differentiating factor as AI, 5G, and cloud computing mature. Pivoting, repurposing and reinventing — businesses can thrive by identifying and serving the needs of consumers of the present, and the future..