Based on anecdotal evidence of industry players, Mario Braz de Matos, co-founder of Singapore-based branding consultancy Flying Fish Lab, shared that there appears to be a lingering “higher cost-of-living consciousness” that is holding back consumers from spending.
“We’re seeing a much more price-conscious consumer, one that is looking for better value for money across the board, including experiences and non-gift items. For example, nearly 60% of affluent Chinese tourists planned to rein in their shopping while overseas, while 45% expect to travel less frequently in 2025, according to Oliver Wyman’s latest Chinese Travelers Survey.
“While some may be tempted to dismiss this as a China-only phenomenon due to current domestic economic woes, we see the same trend in countries like Australia and Japan, where consumer spending seems to be waning, resulting in reduced expenditures on non-essential and luxury items,” Mario told NutraIngredients-Asia.
This consumer sentiment is said to be largely led by a sense of insecurity about the future.
“What brands and companies can do in response is to meet the needs of present-day consumers. This includes looking for ways to deliver much better value for money, revisiting cost structures to remove unnecessary costs and poorly performing locations, etc. They may even have to revisit their margin ambitions in order to sustain growth.
“They will also need to consider the emotional needs of consumers and offer products that provide a sense of comfort and security. When consumers feel insecure about the future, it wouldn’t be a great time to introduce something that completely challenges their comfort zone. There’s always an opportunity; it’s a matter of how you look at it.”
For instance, companies could pursue more localisation in their product offerings by bringing in elements that reinforce familiarity, or create a retail experience that takes the “buying pressure” off and allows the brand to build stronger connections with its customers.
Catering to different consumer groups
At the same time, it is important to recognise the differences in purchasing behaviours among consumers in different age groups and at varied life stages.
“In general, younger consumers will be far more digital- and tech-savvy, using online platforms for discovery and e-commerce, while older groups will prefer in-store shopping and personal interactions.
“We’ve seen how Gen Z prioritises authenticity and social values, Millennials seek convenience and experiences, and Gen X and Baby Boomers value quality and established brand names.
“Moreover, older consumers focus their spending on health and wellness products and services because health is no longer taken for granted, which is naturally more of the case in younger consumers.”
Mario added that younger consumer groups are more influenced by trends to explore new products and lifestyle experiences, as they are “still finding their place in the world” and will do that via both digital and physical channels.
“Older consumers tend to stick with tried-and-tested brands, whereas younger consumers are more open to trying brands that challenge current category conventions — for example, more intense use of technology to obtain advice or recommendations. Older consumers would prefer to speak to someone in-store, which brings a higher ‘cost to play’ for brands.
“New trends that have emerged via the younger generation result from their openness to new brands of cosmetics or nutraceuticals. These brands typically use tech in a way that appeals to young consumers and on channels that are more geared to the digital natives.”
As such, brands need to be clear about who their core target customers are and how to capture them.
Brands that target younger consumers are urged to lead with a digital-first approach, fuelling this generation’s thirst for novelty. Tech can and should be used to deliver not just an immersive experience, but also the ability to customise and constantly surprise consumers at every touchpoint.
“It’s easier said than done, but if you nail it, the reward will be explosive growth because this generation is far more networked than any other before it. The challenge is in holding onto success, as the factors driving it today are not ensured tomorrow.”
On the other hands, brands aimed at an older audience should consider both digital and physical channels as part of their growth strategies.
“Just because they are not digital natives doesn’t mean that they’re dinosaurs. Especially in China, consumers are generally quite tech-savvy, so digital channels still matter enormously. But you may need to focus on service, experience, quality, and other elements that bring reassurance in a way that does not matter as much to younger consumers.
“Retail experience will play a bigger role in the strategy of these brands. Looking at where the market is going for younger consumers, brands need to be able to reinterpret these trends in a more mature and sophisticated way for the older and likely more affluent consumers,” Mario concluded.
