The Road To Southeast Asia: A Study of Consumer Perceptions and Market Opportunities for Chinese Automotive Brands

Chinese auto brands venturing into Southeast Asia are poised for significant opportunities, but they must navigate a complex landscape of market challenges to succeed in the region.

 

 

THE RISE OF SOUTHEAST ASIA

Southeast Asia is an economic success story. According to the latest International Monetary Fund World Economic Outlook figures, Southeast Asia has a combined GDP of USD3.08 trillion. It is predicted that by 2050, the region will rank as the fourth-largest economy in the world. 

With its vibrant economy, favorable foreign trade policies, and geographical proximity to China, the region offers significant opportunities for Chinese businesses to expand their presence, build strategic partnerships, and engage with Southeast Asian consumers. 

In the four major markets of Indonesia, Thailand, Vietnam, and the Philippines, there is substantial demand for Chinese products, from beauty and electronics to rising interest in Chinese automotive brands. These markets are particularly welcoming to automotive brands that emphasize electric vehicles (EVs). As such, they collectively represent the ideal zone of expansion outside the saturated Chinese market. 

Understanding the economic landscape, consumer perception, and demands in these markets is instrumental for Chinese brands looking to enter these countries and cultivate strong market presence. 

This white paper by Vero and WeBridge provides insights into the economic landscape and consumer perceptions and demands in these markets and offers a roadmap for Chinese auto brands exploring Southeast Asia. 

 

Economic Snapshots

 

The China-ASEAN Trade Partnership

Southeast Asia’s geographical proximity to China has made it an attractive market for Chinese investments. From large-scale infrastructure projects to the energy sector, technology, and manufacturing, Chinese investments in the region have experienced substantial growth. China’s trade with ASEAN amounted to $975.3 billion in 2022.

Trade between China and Southeast Asia has more than doubled in the past decade and almost quadrupled since the ASEAN-China Trade in Goods Agreement came into effect in 2005. Within this trade agreement, more than 90% of goods from China and ASEAN are subject to zero tariffs. This has led Southeast Asia to overtake the European Union and become China’s primary trading partner, indicating the establishment of a new regional economic and trade cooperation framework.

Additionally, a 15% year-on-year increase in trade was observed following the implementation of the Regional Comprehensive Economic Partnership (RCEP). Within RCEP, over 90% of trade in goods will be fully liberalized.

 

Southeast Asia’s Transport Infrastructure 

According to the Asian Development Bank, Southeast Asia will need to spend $2.8 trillion on infrastructure through 2030 to sustain economic growth. To meet these demands, countries in the region should invest more than 5% of their GDP over the next decade. Presently, Vietnam leads ASEAN in infrastructure investment, dedicating 6% of its GDP to this sector. In comparison, Indonesia and the Philippines allocated about 5% of their GDP in 2023, while Thailand had the lowest infrastructure spending at 3.1%. Recognizing that transportation and mobility are critical drivers of economic growth, governments are directing their efforts to address transportation challenges, modernize the transport system, and ensure efficient networks.

—Expanding Road Networks for Better Connectivity

Indonesia has made substantial investments in constructing toll roads across Sumatra, Java, North Sulawesi, and Kalimantan, aiming to alleviate congestion in cities such as Jakarta and encourage car ownership. Additionally, the country has commenced the development of roads, expressways, green zones, and energy infrastructure in Nusantara, East Kalimantan, the site for Indonesia’s new capital.

Thailand, meanwhile, announced it is investing about $15 billion in transport infrastructure to promote economic growth. Thailand’s current network of roads and highways has a total length of 702,989 km, and is bound to expand as new investments pour in. In the first phase of a 20-year Motorway-Rail Map project, Thailand will construct 331km of new highway, establishing a modern and efficient transportation network. 

Significant road construction initiatives are also underway in the Philippines. Among these projects is the construction of the Metro Cebu Expressway (MCE). The north-south bypass is expected to cost $1.64 billion. Additionally, the 8km NLEX connector road, linking the North Luzon Expressway and Manila, was opened for motorists in October, further improving connectivity. 

Vietnam’s ambitious transportation infrastructure plans are projected to cost up to $65 billion between 2021 and 2030, with an aim to scale up the current 1,290km of national highway to 5,000km by 2030. The ambitious 1,800km HCMC-Hanoi highway is currently being constructed, which will aid transport and goods movement throughout the country.  

—Developing Infrastructure for Mobility Electrification

Southeast Asia knows the future of mobility is electric. Consumers in the region are showing willingness to shift to electric cars —56% in Thailand, 51% in Vietnam, and 47% in both the Philippines and Indonesia, according to a survey by Milieu — but the current infrastructure gap remains a deterrent to the full adoption of green mobility. 

Charging stations remain scarce, if not inaccessible, making consumers apprehensive on long-haul routes. A comprehensive network of publicly accessible charging points is essential for the successful decarbonization of the region’s transport sector. Indonesia only has 439 charging stations as of November 2022, Thailand has about 2,000 charging stations, and the Philippines has 900 charging stations, but only 338 are registered with the government. Vietnam’s EV infrastructure, meanwhile, is currently dominated by homegrown EV manufacturer VinFast, which does not share stations with other brands. 

Major factors impacting the growth of EV charging penetration in the region include the lack of usage and purchase incentives for EV users, high import tariffs, lack of accessible space to serve as charging stations, inefficient distribution of charging infrastructure (resulting in saturation of EV chargers in commercial areas), and lack of EV chargers in residential areas where it is more convenient for users to use overnight charging. 

The availability of efficient battery-swapping systems in the region is also a common concern among Southeast Asian consumers. A Singaporean smart battery startup is one of the few players trying to bridge the gap in Indonesia, having already built 16 swap stations in Jakarta, but only for e-bikes. In Vietnam, homegrown EV scooter startup Selex is building battery ATMs, sophisticated automated locker systems that allow users to conveniently exchange depleted batteries for fully charged ones. Thailand and the Philippines are currently testing out battery swapping systems with private companies, but such services may only be available in their capital cities. 

Governments will need to streamline the processes and allow data-sharing – between charging points and the vehicle, the manufacturer and the vehicle, the charging network providers and charging points, or charging network providers and utility providers – that could also help to strengthen the overall EV ecosystem. 

—Government Policies Propelling EV Adoption

The rise of electric vehicles in Southeast Asia is propelled by government efforts to promote environmentally friendly transportation systems. Energy efficiency, a central topic of discussion and a key purchasing motivator among consumers in Indonesia, Thailand, the Philippines, and Vietnam indicates a surging demand for these vehicles.

 

OPPORTUNITIES FOR CHINESE AUTOMOTIVE BRANDS IN SOUTHEAST ASIA

China is Experiencing A Positive Shift in Consumer Perceptions

China’s remarkable manufacturing revolution, in parallel with its continued technological advancements, has rewritten the narrative surrounding its products in recent decades. These developments enabled China to dominate the global supply chain and eventually become “the world’s factory.” 

As manufacturers started to rebalance production volume and expectations of value, Chinese brands expanded their reach beyond the border, positioning their products competitively against multinational rivals. The country’s ability to rapidly digitalize products, services, communication, and distribution, exemplified by the surge of e-commerce platforms, has further facilitated Chinese brands in captivating Southeast Asian consumers. 

Using Vero’s social listening tools, we identified three attributes of Chinese brands and products that exhibited the highest growth rate in sentiment scores over the past four years in Indonesia, Thailand, the Philippines, and Vietnam.

 

Chinese Products’ Affordability and Smart Features Captivating Consumers 

Southeast Asia is positioned as one of China’s most vital consumption markets. Consumers in the region exhibit a wide range of preferences, demands, and purchasing motivators influenced by cultural nuances and economic development. 

Across all four markets, consumers value Chinese brands for the affordability of their products and services.  

Our research also revealed that Vietnamese and Indonesian consumers perceive Chinese products as innovative, especially in the domains of electronics and vehicles.  

Filipino and Thai consumers, meanwhile, see Chinese brands’ seamless integration of online and offline distribution channels as an advantage. The presence and influence of prominent Chinese e-commerce platforms such as Alibaba, Taobao, and JD.com have made cross-border purchasing experience easier for consumers in the region. 

There’s also a notable focus on Chinese products’ functionality and design, reflecting the increasing importance placed by consumers in Indonesia, Thailand, the Philippines, and Vietnam on the aesthetic qualities of a product. 

Word-of-mouth continues to be an effective marketing tool for Chinese brands, as people in these markets actively seek personal reviews and product recommendations when considering brands from China. 

Chinese Auto Brands Gaining Attention

Now more than ever, Southeast Asian consumers are open to the prospect of buying Chinese-made automotive products. This shift is largely due to the growing interest in EVs, combined with undeveloped domestic production. Of the four markets studied, only Vietnam has a home-grown EV producer (VinFast), which targets a different market segment from most Chinese brands. Meanwhile, several Chinese brands have already made inroads in these markets, though they are far from saturated. Here’s a glimpse of Chinese auto brands’ presence in Southeast Asia: 

 

Southeast Asian Consumers Embracing Chinese Auto Brands Positively

Southeast Asian consumers have generally positive perceptions of Chinese auto brands based on their affordability, technological features, sleek and modern designs, and convenience. 

Chinese car manufacturers often offer vehicles at competitive prices, making them accessible to a broader segment of consumers in the region. They appeal to price-conscious consumers looking for budget-friendly options without compromising functionality, smart features, and style. 

 

Key Conversations: From Finance to Road Shows

Vero analyzed key online conversations to find out more about their interests and preferences regarding cars. 

We found that keywords related to CAR LOANS, like special interest rates, flexible monthly installments, and wise payment, are major topics of discussion, especially in Thailand, the Philippines, and Vietnam. Many netizens, key opinion leaders (KOLs), and influencers are sharing valuable insights on responsible car loan management and utilizing credit cards. 

Consumers in all four markets also showed interest in electric vehicles, as evidenced by significant search volumes of keywords such as ENERGY SAVING, ELECTRIC CARS, and ENERGY EFFICIENCY. Across markets, EVs are highly considered energy-efficient and cheaper to run and maintain than internal combustion engines. In Thailand and the Philippines, CAR INSURANCE is a hot topic of discussion. Many consumers are seeking information and advice on the best car insurance options. Thai consumers are particularly concerned about the high cost of insurance for electric vehicles. 

These findings underscore the direct link between finances and car ownership, highlighting the importance of strategic financial planning. Consumers actively seek options that offer excellent value for their money in this context. 

Additionally, the prevalence of topics related to ROAD SHOWS and INTERNATIONAL MOTOR SHOWS in Vietnam and Indonesia signifies the growing enthusiasm for exhibition and road show events. These events provide attendees with the opportunity to physically explore various car models and experience test drives firsthand before they make a car purchase. 

Southeast Asians View Cars as Essential, but High Maintenance Costs Pose Major Worry

Top Motivators

In Southeast Asia, the significance of owning a car as a symbol of financial stability leads consumers to meticulously assess their choices. Individual preferences and lifestyle considerations play a pivotal role, particularly in Indonesia, Thailand, and Vietnam, where cars reflect one’s living standards. The Philippines, emphasizing necessity due to traffic congestion, underscores the essentiality of car ownership in daily life. Chinese car brands, known for their affordability, resonate with Filipinos’ aspirations, making car ownership attainable.

The expanding ride-hailing market in Vietnam influences purchase decisions, especially for business use. This trend opens strategic opportunities for Chinese car brands to collaborate with ride-hailing platforms, following the successful model of VinFast and Be partnership. Additionally, the increasing demand for energy efficiency fuels the interest in electric vehicles among consumers in Thailand and the Philippines. China’s position as a major electric vehicle manufacturer, offering diverse options and bolstering charging infrastructure, aligns well with this trend.

Top Barriers

Despite the positive perception of affordability associated with Chinese car brands, the high cost of car ownership remains a significant hurdle in Southeast Asia. Complexities in car loan processing, expensive insurance, maintenance, and fluctuating gas prices compound financial concerns, particularly for consumers in Indonesia, the Philippines, and Vietnam. Chinese car brands’ competitive advantage lies in their perceived affordability, a crucial factor as consumers expect electric vehicles to be reasonably priced.

Moreover, limited parking spaces and worsening traffic congestion pose significant challenges, notably in Vietnam and Indonesia. Addressing these concerns, along with worries about the environmental impact of car ownership and the origin of the brand, presents an opportunity for Chinese auto brands. By offering eco-friendly electric vehicles and enhancing the desirability of Chinese-made products, they can effectively tackle these barriers and establish a stronger foothold in the Southeast Asian market.

 

OVERCOMING ENTRY CHALLENGES: CHINESE AUTO BRANDS IN SOUTHEAST ASIA

Dominance of Japanese Brands

Southeast Asia’s growing automobile sector attracts global manufacturers and investors due to the expanding middle class and favorable trade agreements, creating a competitive industry. 

Currently, the Japanese auto brand Honda holds a dominant position in the Indonesian, Thai, and Filipino markets in terms of share of voice (SOV). Honda has strategically set up several production facilities in all four markets and has gained recognition among consumers for its diverse range of vehicles that cater to different segments. In Vietnam, however, the German luxury brand Mercedes-Benz is the most talked about brand. 

Toyota, another renowned Japanese brand, enjoys widespread popularity across all four markets, consistently ranking in the second or third position. Other Japanese auto brands that dominate the market include Nissan, Suzuki, Mazda, and Mitsubishi.  

In Vietnam, the Chinese brand Chery has surpassed Subaru and Nissan in terms of SOV. Chery launched a #FunToDrive campaign earlier this year, which raised brand awareness and increased sales by 12%. Geely, FAW, and BYD have also achieved significant market share, thanks to their partnerships with local businesses and government agencies. 

MG, a British-Chinese automotive company, has also established itself as a leader in electric vehicles in Thailand with significant SOV, aided by the brand’s collaboration with many Thai influencers to build brand awareness of its new MG ZS series in 2023. 

Issues on Quality and Safety

While Chinese-made products have gained popularity and positive perception in recent years, brands still face skepticism, especially toward cars. Chinese automakers need to overcome consumer prejudice and showcase their quality, technology, and competitive advantages. 

According to insights from Vero’s social listening tools, most consumers in Southeast Asia find the reliability and quality of Chinese auto brands a major concern. These consumers express significant reservations about the durability and long-term performance of these cars, comparing them to other foreign brands that have already established superiority.  

In Thailand and Vietnam, consumers have highlighted the poor safety standards associated with Chinese car brands. Thai EV owners have reported incidents of batteries catching fire due to rapid overheating, raising serious safety concerns. 

In the Philippines, where many view car ownership as an investment, consumers are worried about the low resale value of Chinese car brands, adding another layer of concern for potential buyers. 

Additionally, Indonesian and Thai consumers have expressed concerns about the unavailability of spare parts and delayed maintenance services, indicating that after-sales service significantly influences brand choice. 

 

KEY RECOMMENDATIONS FROM VERO AND WEBRIDGE

Leverage Current Positive Perceptions of Chinese Auto Brands

—CASE STUDY: Wuling Air EV launch in Indonesia

Wuling launched its first electric car in Indonesia in 2022 with the strong USPs of affordability and a charming design with various color options. It positioned itself as a ‘fashion car’ that Indonesians want because of its uniqueness.

LAUNCH: Wuling held an exclusive event for the first 100 buyers of Wuling cars in Jakarta. Wuling also carried out the first convoy of 100 cars on the streets of Jakarta and received a good reception from the public. 

INFLUENCER CAMPAIGN: Wuling collaborated with at least 5 big influencers in Indonesia, with each associated with a different color: Arief Muhammad as a young father (Avocado Green), Den Dimas as a lifestyle enthusiast (Lemon Yellow), Om Mobi with a passion for car modifications (Peach Pink / Lemon Yellow), Ridwan Hanif the renowned automobile YouTuber, represents the epitome of superb automotive performance (Galaxy Blue), and Fitra Eri as the representative of an older demographic (Pristine White). 

PR COMMUNICATION: In addition to the stories of the cars themselves, Wuling also emphasized the message “Chinese cars assembled in Indonesia,” showcasing its commitment to further developing the Indonesia market.  

RESULT: Wuling Air EV sales skyrocketed, even outselling its competitors by a significant margin. The brand was also named an “Omni Brand of the Year” by Marketeers.  

 

Take a 360-Degree Stakeholder Approach to Build Trust

—CASE STUDY: VinFast collaborates with Be Group and Cake by VPBank to support beBike drivers switching from gasoline scooters to electric bikes

VinFast, a multinational automotive company founded by Vingroup, the largest private conglomerate in Vietnam, has partnered with the ride-sharing service Be Group and the multi-service consumer platform Cake by VPBank, a local Vietnamese bank, to support beBike drivers in transitioning from gasoline to electric motorbikes.  

VinFast offers Be drivers a 4% discount on the VinFast Feliz S electric motorcycle, while Cake by VPBank provides favorable loans with starting interest rates as low as 0%. All loan procedures are conducted online, making it convenient for drivers.  

Through this partnership, VinFast is familiarizing Vietnamese people with its products, making them a common sight on the road and allowing many people to experience a ride on the back of one. 

—CASE STUDY: Hyundai Motors and its locally-driven 360-degree stakeholder activation strategy

Hyundai has been actively expanding its presence in the Indonesian market, intending to make headway in a market traditionally dominated by Japanese automakers like Toyota and Honda. These Japanese giants have long held a strong position, with their brands gracing more than 80% of passenger cars sold in the country. Hyundai Motors Indonesia (HMID), the local sales company of the Korean automaker, began at the 13th spot with 3,005 cars sold in 2021 but quickly rose to the eighth position, selling 31,965 units in 2022. 

The IONIQ 5 represents Hyundai’s latest electric vehicle offering and its first all-electric model manufactured outside Korea. Under the banner of “Power Up the Future,” Hyundai has built trust with its customers through a locally-driven 360-degree stakeholder activation strategy: 

• Establishing a corporate presence via an assembly plant in Indonesia. This step demonstrates support and dedication to local authorities and customers, aiding the country in addressing its mobility challenges more effectively. 
• Fostering an image and lifestyle association. In addition to collaborating with local influencers such as Ridwan Hanif and Fitra Eri, the product has earned recognition as “a Ministerial Mobility Vehicle” by providing 117 cars for use as official operational vehicles during the 2023 ASEAN Summit. 

Supporting this stakeholder activation strategy is a locally tailored approach designed to cater to the unique needs of the Indonesian market and share stories from a local perspective. 

Promote Electric Vehicles

As Southeast Asia moves toward a more sustainable transportation and mobility sector, consumers’ attention are now directed towards electric vehicles. Chinese auto brands, known for their superb BEV and hybrid cars, can take this opportunity to help further propel the region’s EV industry.

1. Embrace authentic sustainability messaging, but don’t overplay it. 
2. Dig deeper and try to address consumers’ pain points in EV adoption. 
3. Introduce EV models tailored to local preferences. 
4. Promote green mobility as a lifestyle. 
5. Partner with like-minded industry leaders. 
6. Promote thought-leadership and pioneering activities of China in the global EV industry.
   

Work with us! Contact nihao@vero-asean.com​ to explore vast opportunities for Chinese brands in Southeast Asia.

 

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RESEARCHERS:

Do Duy Quang Vice President, IMC Consulting, Vietnam in IMC Team quangdo@vero-asean.com	Tran Kim Hoang Yen Associate PR Account Director, Vietnam in PR yen@vero-asean.com
Nguyen Quang Thach Director, Data and Insights, ASEAN thach@vero-asean.com	Tran My Ha Senior Data Analyst hatran@vero-asean.com
Peerapong Pongpakdee Data Innovation in IQ and Media, Thailand peerapong@vero-asean.com	Dzikri Sabillah Anwar Senior PR Executive, Indonesia chiki@vero-asean.com
Kim Donato Digital Account Executive, Philippines kim@vero-asean.com

 

Vero, a leading communications consultancy in Southeast Asia, is today launching an AI-first PR agency called Rover. The new agency will act as an incubator for AI-powered brand campaigns and processes, producing work for new and existing clients and seeking partnerships with other AI-focused stakeholders in the PR industry, including AI-applications, trade groups, non-profits, academics, and thought leaders. It will operate alongside Vero’s existing offices in Indonesia, the Philippines, Thailand, and Vietnam.  

Vero has already integrated generative AI tools into its creative, content, data, and planning processes. The launch of Rover sees Vero invest further in AI capabilities to accelerate and diversify its internal learning and client offerings. 

Rover is spearheaded by Founding VPs Skylar Thwe and Hong Phuc Ngo and will launch with a collective of practitioners made up of consultants, creatives, planners, media relations specialists, editors, strategists, data analysts, and media buyers.    

Discussing Rover’s plans, Skylar says, “We believe that a dedicated AI agency built from scratch is the best way for us to accelerate our learning and to share it with colleagues and clients.” 

Rover provides a wide range of PR and Creative services for clients across sectors, leveraging AI-powered tools to improve workflow efficiency, digital content, and output accuracy.  The agency is also equipped to provide AI consulting and literacy training for brands seeking to embed best practices for AI within their organizations and in-house communications and marketing teams. 

“AI technology is now ripe. Brands using artificial intelligence to amplify human creativity are empowered to tell bigger and bolder stories, so PR and communications agencies must be fluent in AI to accompany their clients on this journey,” says Hong Phuc Ngo.

Rover deploys AI productivity tools such as ChatGPT, Midjourney, and Firefly to accelerate and automate content creation across various media formats, including text, images, 3D videos, animation, voice synthesis, and music. These tools will enable copywriters, editors, and designers to create bigger stories with a more diverse range of styles, tones, and formats and reach more audiences in far less time.  

Additionally, audience analytics and consumer sentiment analysis tools break down extensive datasets into actionable segments that can be used to refine media pitches, messaging, and executive communications for Rover’s clients. These real-time insights enable prompt adjustments and enhance campaign ROI.  

Rover’s AI-driven methods further support improved influencer collaborations, marketing strategies, trend identification, and immersive experiences. Rover aims to provide safe and legitimate AI-enhanced work to the public and its clients by acknowledging the ever-evolving AI technology and PR landscapes. In doing so, it follows five guiding principles, including: 

1. Ethical AI Practices: Commit to ethical AI use in PR and communication activities by respecting data privacy and consent standards and tracking AI tool providers’ progress in AI alignment and bias risk. 
2. Transparent AI Utilization: Maintain transparency in the use of AI with clients and the public.  
3. Fact-Checked Content: Ensure that all AI-generated content aligns with verified facts and accurate information. 
4. Compliance and Regulation: Stay informed about AI-related regulations and compliance requirements, particularly those related to data privacy and disclosure in communications. 
5. Partnerships and Collaboration: Explore partnerships with AI technology providers, academics, thought leaders, and non-profit organizations to effectively harness AI’s potential in enhancing PR and communications efforts. 

 

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About Rover 

Rover, an affiliate of award-winning communications consultancy Vero, is an AI-first brand communications agency based in Southeast Asia, specializing in AI-powered public relations and marketing services across a wide range of industries in the region. Recognizing the transformative power of artificial intelligence in the communications industry, Rover combines emerging tools and human creativity to deliver innovative branding strategies, creative campaigns, critical data analysis and interpretation, public and media relations, and media buying. The agency operates alongside parent company Vero’s offices in Indonesia, Thailand, the Philippines and Vietnam. Rover is actively recruiting prompt specialists.  For further information on Rover, please visit www.rover-asean.com contact us at hello@rover-asean.com. Follow Rover on LinkedIn, too.

 

Understanding the ‘why’ behind consumer anxiety allows brands to reinforce their relevance, and win loyalty and trust.

 

This article was originally published on Advertising Vietnam.

 

With the world still reeling from the impacts of the COVID-19 pandemic, food shortages, geopolitical challenges, and financial fragilities, the path toward global stability remains ambiguous. In Southeast Asia, while the economic outlook seems optimistic, threats to sustainable prosperity loom.   

This prolonged instability, referred to by economists as a “state of permacrisis,” directly affects consumers, who are the backbone of the economic system. As food and energy prices surge to near-historic highs and supply chain shortages continue, consumers are becoming more anxious than ever to navigate the financial challenges and make informed decisions about their spending and lifestyle choices.  

In a recent WARC Spotlight Southeast Asia series, our GWI research found that Asians are shifting their worries away from the pandemic to inflation-related concerns. According to a separate survey by Milieu, almost four in five of those surveyed in Singapore and the Philippines find life stressful, followed by Malaysia (61%), Thailand (59%), Indonesia (51%) and Vietnam (42%). Vietnamese consumers, specifically, named unemployment and economic recession among their top concerns. 

Notably, Gen Zs in the region are the hardest hit by mental health issues, with over a third (37%) saying they are prone to anxiety. In Vietnam, this number rises to nearly half (47%). Young as they may be, they worry about the type of future they’re heading toward. Global research by Deloitte revealed the top contributors to Gen Z’s feelings of stress: their long-term financial future (47%), day-to-day finances (42%), and the health/welfare of their family (42%).  

But while the stress and anxieties are evident, the GWI study found that mental health issues remain taboo for most of Southeast Asia, with only 30% feeling comfortable talking about their anxieties openly. This number dropped to 24% among people living in rural areas, compared to 34% of those in urban contexts, potentially reflecting the different levels of awareness and acceptance in these communities. 

However, there is an increasing recognition and prioritization of mental health and well-being, especially among the Vietnamese (69%), Filipinos (67%), and Malaysians (58%). 

When consumer loyalty is tested, show them genuine value  

These fears and anxiety put consumer loyalty to the test. When spending power is limited, consumers become more discerning about their purchases. They seek brands that offer genuine value, demonstrate empathy and agility, and take a human-centered approach over mere PR stunts. 

Understanding the ‘why’ behind their behaviors and decisions allows brands to connect on a deeper level with already-anxious consumers, reinforce their relevance through a new form of cultural value, and win loyalty and trust.  

Here are two ways for brands to win over and retain customers in this new cultural climate, helping to reduce consumer anxiety and sensitivity to prices.

• Take a ‘life-centric’ approach: One of WARC’s Spotlight experts explores how brands can go beyond consumers’ immediate needs to consider how systematic challenges interplay in a consumer’s everyday lives, thereby increasing customer loyalty and lifetime value and expanding the brand’s relevance across multiple facets of a customer’s life. 

• From ‘cost conscious’ to ‘quality confident’: Do not refer to your customers as “cost-conscious” because it only reinforces the feeling of anxiety and scarcity. How can you make customers feel like they are making smarter choices and reducing mental availability? Provide flexibility to communicate the multi-functionality of the product.

This is probably why gaming is becoming increasingly popular as an outlet to alleviate stress and anxiety. More than 50% of PC and console players in the region said they started playing games to satisfy their “need to relax,” a Google PC & Console Insights Report in 2022 showed.

 

Remember, customers want to ‘buy into’ not just ‘buy from’ the brand  

Branding creates emotional connections and influences perceived value. Brands are much more than logos or taglines; they are stories, values, and emotions – and these are what customers are drawn to. This becomes especially crucial during an economic downturn when consumer anxiety is more prevalent as they need to make tough decisions about allocating their spending.   

A strong brand can enhance the perceived value of a product or service. This can allow companies to maintain pricing and protect margins during an economic downturn. Luxury brands like Louis Vuitton or Gucci can still command high prices for their products even during recessions due to the perceived prestige and status associated with owning these brands.  

A local example can be seen in the Mercedes Benz Vietnam (MBV) approach. Recognizing the importance of both emotional connection and perceived value, MBV identified its next best customers for the C-class line. MBV notably shifted its campaign for the Mercedes C200 from the traditional “show-off” businesspeople in Vietnam to the younger aspirational generation of affluent consumers.   

The entire “This is my world” campaign served as a statement of ownership and self-expression, providing a new perspective on the role of the product for the customers. It was not just about owning a luxury car but about making a statement about their world and their place in it.  

 

Decode consumer conversations for authentic engagement 

The complex tapestry of consumer desires, preferences, and critiques in today’s digital landscape has reached social media. Enter social listening: tuning into these platforms to decode sentiments surrounding brands and trends. This tool empowers brands to monitor and dissect conversations and actively participate and resonate within these dynamic dialogues. 

As the digital chatter reflects evolving consumer perspectives, it’s crucial to note that Gen Z, a demographic with distinct needs and an amplified demand for brand accountability, drives a significant portion of this discourse. For instance, consider the phenomenon of “cancel culture,” wherein they collectively disassociate from individuals or brands linked to socially or morally unacceptable actions. Social listening emerges as an invaluable asset, offering a clearer understanding of this trend. 

Brands can further connect with these young consumers by immersing themselves in the consumer’s world to understand their lifestyles, motivations, and pain points. This could involve everything from ethnographic research, where observers are placed in people’s natural environments, to participating in online communities or forums where your consumers are active. 

To illustrate, the prevailing phenomenon of positive “flexing” among Vietnamese Gen Zs holds significant insight. The phrase “Flex đến hơi thở cuối cùng,” roughly translating to “Flex until your last breath,” has gained traction within the Vietnamese social media sphere. It characterizes the act of showcasing achievements, possessions, or lifestyle, often persevering even through challenges or to the point of exhaustion. 

Engaging with this cultural shift, brands can actively participate in relevant Facebook groups, gaining firsthand exposure to shared accomplishments, linguistic nuances, and community dynamics. The trend also signals a demand for products and experiences that embody excellence and possess a certain degree of prestige or ‘flex’ value. Brands can align with this movement by offering offerings that resonate encouraging consumers to proudly share their experiences on social media platforms. 

In the crucible of uncertainty, brands that make an earnest effort to comprehend the growing anxiety and shifting needs and emotions of consumers, thereby fostering a bond of trust and loyalty that transcends challenging times. Consumers are far more than mere data points or demographic segments; they possess the power to either uplift or undermine a brand’s reputation. Getting on their good side means survival.