Conservative spending habits impact product, positioning and price

By Natasha Spencer

- Last updated on GMT

Conservative spending habits impact product, positioning and price

Related tags: Macroeconomics, Marketing

With fear acting as a key driver in the Asia-Pacific (APAC) market, we caught up with Delon Wang, Trends Manager, Asia Pacific at Mintel and asked about the impact that safety, security and protection have on consumer spending habits and brands.

Fear restricts spending

In Mintel’s recent report highlighting prominent and current trends, it revealed how APAC consumers are adopting strict decision-making processes and limiting consumer spending in favour of preparing for the future.

Mintel’s Consumer Spending Priorities China 2017 report identifies fear as a core factor in determining purchasing patterns.

Of those asked, 50% of Chinese consumers stated that the health and safety of themselves and their family has a significant influence on their willingness to spend on beauty and personal care items.  

Going forward, Delon Wang, Trends Manager, Asia Pacific at Mintel highlights how “the industry will see a lot of potential in the long-run particularly as health and safety concerns remain high on consumers’ minds”​.

Natural elements

Increasingly, consumers are looking for brands and individual products that reflect their concerns regarding health and safety. They are seeking reassurance that they are applying natural and organic-based items to their skin and hair.

“Labels that contain natural and edible ingredients have been in demand in recent years, particularly driven by the fear of the unknown – unfamiliar chemicals and possible long-term negative effects – among consumers,”​ said Wang.

In today’s market, “edible and natural components the likes of trees, grains, and flowers, would seem to be safer options from a consumer’s perspective,”​ added Wang.

Future preservation

Along with environmental concerns, particularly in markets that are “often plagued with pollution”​, like China, Thailand and Indonesia, brands are recognising that the “UV protection beauty market, for instance, is not just for women; there is potential to cater to men and even teenagers who are frequently out in the sun”​.

While physical health remains a key concern of APAC cosmetics consumers, beauty buyers are also concerned about their finances, with consumers adopting moderation when it comes to premium luxurious brands as they opt for prioritising financial management.

Despite a variety of factors impacting consumer spending confidence, brands can focus on building upon, and marketing,  the value of a product.

“If a product points to contributing to their own health and safety, in the long run, consumers are likely to justify that their purchase is worth the effort and investment to be diligent with its use,”​ Wang stated.

Mintel’s research identifies how 60% of metro Thai consumers aim to organise their finances in 2016. As a result, brands may well re-explore their positioning and modify their mid-term strategies to reflect consumer confidence.

Online protection

Digital security within the e-commerce sphere remains a safety concern for cosmetics shoppers, as buyers aim to protect their personal and financial data.

As digital technology continues to grow and transform, earning the trust of consumers will be crucial and can be achieved by focusing on consumer privacy and respecting data protection 

On the importance of digital security, Wang emphasised how: “This should be a part of a brand’s overall approach as consumer trust is no longer easily earned in this day and age...even more so for brands that are highly invested in e-commerce platforms.”

Bigger picture

Moving forward, both “industry leaders and authority figures can play a part in advocating healthier lifestyles”​. Experts in cosmetics such as dermatologists and scientists can focus on engaging in direct conversations with consumers that open up the lines of conversation.

Brands can also utilise digital and social platforms for added convenience and appeal to contemporary communication lines by using live-streaming and chat channels to “educate and bring awareness on the importance of products with protective elements​”, Wang concluded.

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