By Matthew Crabbe, Director of Trends, Asia-Pacific for Mintel
“It’ll get worse before it gets better.”
That’s the kind of better-sweet prognosis doctors often give their patients, along with “this will hurt, but only a little”.
Looking at the Asia Development Bank’s (ADB) September predictions for Thailand’s economy as it recovers from COVID-19, the situation for Thai consumers will be some pain now, before things get better in 2021. ADB’s prognosis is for a positive 2.5% growth in the quarter to start of April 2021, followed by 3.5% and 4.5% growth in following quarters. Not a huge recovery, but a massive contrast with the very painful -8.0% decline in the quarter up to September 2020 – where we are now.
For Thai consumers, the current pain is all too real. It’s not a sharp, debilitating pain, rather a chronic dull ache that makes them think long and hard before they dare to venture back to spending. According to Mintel’s Global Consumer research in July, Thais are much more concerned about the financial impact of COVID-19 on them and their families (63%), the economic impact on their community (56%) or life not being the same as it was before the pandemic (45%), than they are about their family getting sick (29%) or sick themselves (27%).
The economy overtakes the epidemic
Also according to Mintel’s Global Consumer data, compared with December 2019, the proportion of Thais feeling financially healthy is now -11% points smaller, while those feeling like they’re just getting by or struggling is up 10% points. They are less confident and more worried about the future.
Logically, this situation would lead you to think that front of mind for Thai consumers was budgeting. But, based on Mintel’s Consumer Driver research, while the ‘Budget Driver’ was top of mind of 85% of Thais, so were sustainability and playfulness. In fact, Mintel research highlights that 90% of Thais chose convenience, more than budget.
What this data is evidence of is, rather than a closing off into a protective budget shell, Thais are still looking to buy products and services, but are looking for a new value proposition.
Next normal value
Brands are already responding to this shift in Thai consumers drive for value. According to Mintel Trends observations, both Starbucks and 7-Eleven have opened vending machine cafés, both countering the sharp decline in foodservice outlet sales, offering touch-free hygiene and a bit of playful fun. This also appeals to the 90% of Thais who have convenience as a key driver.
If brands have temporarily dropped their sustainability focus while dealing with the pandemic, and its economic fallout, they should think again. Yindii is an app that connects customers with high-quality surplus food from bakeries, restaurants and grocery stores around Bangkok at a discounted price. Who says sustainability and being on a budget can’t coexist?
Mintel has also seen a rise in Thais sense of community, and being all together to help the nation get through the hard times. Financial stress therefore does not mean Thais are dropping their community spirit and philanthropy. Consider the example of GrabFood Thailand, which launched an app feature that allows users to share free meals with their delivery drivers.
Offer a vision of ‘better’
The message to brands in Thailand therefore does not fixate on price-cuts, discounts, bulk purchases or making deals. But there is need for brands to offer more than that. What Thai consumers want from brands is a better vision of what the ‘next normal’ could be.
With greater access to online information and shopping, social media scrutiny, meanwhile becoming increasingly demanding of better quality as their incomes have growth, Thais are increasingly scrutinising brands. What they are looking for are brands they can trust. First and foremost, based on quality, durability and the results brands promise to deliver.
Beyond that, they want brands that will be honest with them about their morals, their support for the community (rather than just profit from it). Thais increasingly also want to see brands take a lead in showing the way to be sustainable. As with the pandemic, climate change is too big an issue for many individuals to tackle, and consumers want brands to show them how – how to beat the pandemic through hygiene and social distancing, and how to beat climate change through reducing waste, recycling more and taking less.
Be the fun they remember, when things get better
As well as deals and direction, Thais also want distractions. They want fun, engagement and enjoyment to help them get through tough times. They will remember those brands that strike an honest deal, show the moral way and offer a vision for a better world. But, they will remember even more the brands that help them have a good time.
In July, CentralWorld, one of the biggest shopping malls in Bangkok, transformed its entrance area into a temporary running track for public use. It was a simple change, but it created a psychological shift – changing the brand from passive ‘shopping mall’ to active ‘fun space’. We’ve seen other examples, from Tesco live-streaming cooking demonstrations to brands gamifying discounting by letting shoppers choose which discounts they get with which products.
Brands have an opportunity now to be remembered as the one which helped Thais get through the pain, show a better way and be relied upon to provide much needed fun.