Southeast Asia’s consumers diverge in spending & payment habits

Consumer markets across Southeast Asia are becoming increasingly diverse, with distinct patterns emerging among household spending, digital payment preferences, and approaches to inflation, according to recent survey results.

Distinct economies

The Milieu Insight study categorises the region's consumers into three groups based on data from Singapore, Malaysia, Thailand, the Philippines, Indonesia, and Vietnam. These are labelled as the Stressed Digital Economy (the Philippines, Indonesia, Vietnam), the Strategic Comfort Economy (Singapore, Malaysia), and the Transition Economy (Thailand). Each reflects specific dynamics in financial pressure, optimism, and the adoption of digital payments.

Stressed digital markets

The Philippines, Indonesia, and Vietnam are identified as facing significant financial constraints, yet continue to see increased consumer spending. Consumers in these markets are adopting digital wallets at notably high rates, with 64% of Filipinos and 57% of Indonesians preferring e-wallets for routine transactions. A significant factor remains grocery inflation-77% of Filipinos and 83% of Indonesians report groceries as an unavoidable expense, pushing many to switch to more affordable alternatives.

Despite these pressures, the survey indicates that 59% of consumers in these countries report spending more than three months ago, compared with a regional average of 51%. Sustained optimism underpins this trend, but its durability could be challenged if inflation remains high.

Strategic comfort

Singapore and Malaysia display different behaviours. Here, financial stability is accompanied by careful control over discretionary spending. Singapore reports the region's lowest increase in household spending, with just 40% of respondents noting an uptick. Rather than indicating weakened purchasing power, this reflects a preference for value maximisation. The study found 83% of Singaporeans wait for promotions before spending, while 58% use credit cards to access rewards or cashback offers.

Malaysian consumers showed the lowest caution sentiment in the region, at 20%, and a relatively high level of optimism, at 28%. Both countries exhibit a willingness to spend selectively on purchases where value or quality is evident.

Transition in Thailand

Thailand presents a somewhat mixed picture. A cautious sentiment pervades, with 56% of consumers describing themselves as careful, the highest in Southeast Asia. Still, 54% report greater spending compared to three months prior. Many respondents anticipate improved consumer confidence in the coming quarter, with 53% expecting to feel more optimistic.

The Thai market also shows evolving payment habits, with cash and e-wallet usage both at 39%. The direction of sentiment in Thailand is likely to inform future trends in both spending and payment methods.

Widening divergence

The study suggests differences between Southeast Asia's consumer economies will become more pronounced. Digital adoption, inflation sensitivity, and priorities in value-seeking will continue shaping purchasing behaviour across the region. Businesses will need to consider these differences when developing their strategies, rather than relying on a unified approach.

"Consumers in SEA are no longer behaving as a unified market"

"A uniform brand narrative will not yield consistent results across Southeast Asia," said Juda Kanaprach, Co-Founder and Chief Commercial Officer, Milieu Insight.