Study: 78% cite finances as leading cause of concern in 2024

While inflation has caused the prices of groceries and utilities to rise, consumer sentiment in the ASEAN region has remained largely positive, with three out of five consumers believing that they will be better off by mid-2024, according to a recent study.

At the same time, consumers in the region also indicated concern about their finances, work, health and wellbeing, and surrounding environments.

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These were the findings of UOB’s flagship ASEAN Consumer Sentiment Study 2023 (ACSS), which sought to identify the financial outlooks, habits, and preferences of consumers in Singapore, Malaysia, Thailand, Indonesia, and Vietnam.

Finances were a leading source of concern, with 78% of the region citing it as an aspect causing worry.

More specifically, consumers were worried that they would not be able to save, afford essential items, and maintain their current lifestyles. Indonesia, Malaysia, and Singapore were particularly affected by these concerns.

However, there is optimism towards financial situations in the coming year, with 74% of Indonesian respondents reporting positive expectations. An outlier was Singapore, in which only 38% of respondents indicated optimism, lagging behind on expectations of being financially better in 2024.

As spending tightens, financial behaviours are also shifting towards savings and investments. Consumers are keeping a closer watch on their spending, especially in Indonesia (73%), Thailand (57%), and Vietnam (65%). Meanwhile, sustainable financial instruments and digital currencies are gaining traction in Thailand but losing popularity in Indonesia.

Shifting preferences towards digitalisation

The report also revealed that consumers and banks are shifting towards digitalisation, with an uptick in preferences for mobile banking across the region (54%). Indonesia saw the greatest increase of 62%. Meanwhile, Malaysia saw the smallest increment at 44%.

Other forms of digitalisation include the use of virtual teller machines and chatbots, which have been popular in Thailand and Vietnam respectively. On the digital payment scene, e-wallets and eCommerce payment platforms have gained traction in the region.

Amidst the heavy adoption of digitalisation in the financial scene, the study also identified a significant level of comfort amongst consumers across the board (83%) towards sharing their personal data with banking apps compared to other apps.

In fact, more than half the region (54%) expressed a willingness to share online shopping data to get more personalised offers. These trends come in line with Southeast Asia’s growing digital economy, which is projected to reach US$1 trillion by 2030, fuelled by a young, digital native population.

With that said, offline channels still maintain popularity in some regions, such as Malaysia. For example, 43% of respondents in Malaysia prefer using offline channels to open new bank accounts, compared to the 26% regionally.

34% of Malaysian respondents also indicated a preference for offline channels when applying for simple products, surpassing the regional figure of 21%. Yet, Malaysia recently secured over RM37.4 billion in investment commitments in the digital technology sector in September 2023, in a bid to boost its digital economy. Malaysia’s communications and digital minister, Fahmi Fadzil, stated at the time that the move solidifies the country’s position as an attractive destination for investments.

The rise of the sustainable consumer

As sustainability remains a pressing area of concern for consumers, the study found that nearly 90% of consumers from emerging markets in Asia Pacific (APAC) want to practise more sustainable lifestyles. A growing number have also started to engage in sustainable consumption, making personal choices driven by environmental concerns.

Respondents associated sustainable development in their countries with good health and wellbeing, affordable clean energy, and decent work and economic growth. Over half of consumers regionwide indicated that they would more likely spend on sustainable products and services for their daily needs, such as food and beverages (84%) and personal care (81%).

Behind these choices, the desire to protect the planet for future generations (59%) and wanting their own children to have a better future (51%) were the leading motivators for consumers in the region.

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