Pandemic-hit PH, Asean consumers changing buying habits, says Nielsen study

New socioeconomic and behavioral patterns are shaping the future of the fast moving consumer goods (FMCG) market in Southeast Asia, which appears to be less and less influenced by the news cycle about coronavirus transmission, according to a new Nielsen study.

In a statement, the market research firm said the new drivers of consumption patterns are the so-called basket reset, homebody reset, rationale reset and affordability reset behaviors, which are underpinned by worsening unemployment and uncertain financial prospects around the region.

In the Philippines, people are adjusting their purchases of FMCG items to account for their increasingly “homebound lifestyle”, with 24 percent of consumers having switched pack sizes to account for this.

Nielsen pointed to this as an example of a “homebody reset.” A consumer shift that will reshape FMCG markets is the evolving routines of consumers at home, as do-it-yourself behavior and demand for in-home branded experiences have persisted even beyond living restrictions and store reopenings in many markets around the region.

“Across Southeast Asia consumers continued to demonstrate a focus on in-home consumption, where food and dairy saw strong uptake in markets like Singapore (up by 42.6 percent versus last year), the Philippines (11.4 percent) and Malaysia (6.8 percent),” Nielsen said.

In Malaysia, sales of hair colorings increased by 22.8 percent as consumers opted for hair grooming at home. The same is true in Singapore where home dining led to an increase in consumption of processed frozen food, with sales up by 113.7 percent. In Vietnam, 82 percent of consumers reduced out-of-home food consumption, corresponding to heightened sales of instant noodles (up by 14.1 percent versus 2019), sterilized sausage (17.9 percent), meal makers (7.4 percent) and mayonnaise (31 percent).

Across Asia 38 percent of consumers said they have felt the impact of COVID-19 versus 32 percent globally.

Nielsen also said consumers will start to tweak their priorities about what goes into their shopping baskets and this broad-based adjustment was likely to mirror a fundamental consumption reset.

“Throughout measured Southeast Asian markets, key FMCG categories like alcohol (-9 percent), health care (-3 percent), personal care (-5 percent), and beverages (-8 percent) are seeing sales declines in the year-to-date period ended in June,” the research firm said.

Nielsen said it believes these trends reflect signs of consumers pulling back and reducing shopping expenses brought on by the pandemic.

Stockpiling, often negatively referred to as hoarding, has not persisted in March and April, reflecting a difference between what is on the ground and what was being reported in news stories on the rate of virus transmission and FMCG sales spikes.

It also signalled that what consumers put in their baskets is being reset with added scrutiny on what to purchase from now and moving forward.

TSB