Consumer Trends 2015 Sea

8/18/2019 Consumer Trends 2015 Sea

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CONSUMER

TRENDS 2015

SOUTHEAST ASIA


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WHAT’S HAPPENINGIN 2015?In 2015, pollution will become a key media focus. The

abandonment of the Carteret Islands in Papua New Guinea

due to rising sea levels and the Milan Expo 15’s investigation

into the future of clean water supplies will revive discussion

around emissions, while controversy will grow around Canada’s

Northern Gateway oil pipeline to Asia. However, it’s a growing

awareness of the link between urban pollution and cancer and

premature deaths – following the World Health Organisation’s

revelation that pollution is the world’s biggest environmental health

risk – that will provoke a reaction.

The API (Air Pollution Index) has become a talking point across

Malaysia, as critical levels (greater than 300) are reached in

various regions. In Singapore, the PSI (Pollution Standard Index) is

also of concern. The region suffers from cross-border pollution due

to back-burning in Indonesia, which creates a smog haze, raising

API/PSI to critical levels for weeks on end. In March 2014, Klang in

Malaysia was forced to close schools as API reached 203.

The cosmetics industry in particular has been awakening

consumers to the immediate, visible, personal effects of

pollution, with Avon even coining a term ‘urban dust’ to describe

the ‘environmental aggressors’ that threaten our skin and

general health.

GETCLEANInternational events – somecatastrophic, some inspirational – areputting emissions and toxicity backon the agenda, but it’s the threatof pollution to human, rather thanenvironmental, health that’s drivingtechnological innovation and a spate ofclean, protective product launches inthe Consumer Product Goods space.

The cosmeticsindustry inparticular has

been awakeningconsumers to theimmediate, visible,personal effects ofpollution.

Trends 2015 SOUTHEAST ASIA 4 5

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WHY CONSUMERSWILL BUY INTO THISThe case for going

clean has clear global

resonance. Research from

the Pure Earth/Blacksmith

Institute reveals that

pollution kills 8.4 million

people each year, almost

three times the deaths

caused by malaria and

14 times those caused by

HIV/AIDs.

According to the WHO,

outdoor air pollution was

linked to an estimated

3.7 million deaths, while

indoor air pollution,

mostly caused by cooking

on inefcient coal and

biomass stoves, was

linked to 4.3 million deaths

in 2012.

In addition to the more

serious effects of

pollution, consumers

around the world are

aware of pollution’s

impact on their skin. In

the UK 22% of women

look to cleansers to

protect their skin from the

environment or pollution.

Older consumers are a

particular target: 31% of

UK women who use facial

skincare products use a

moisturiser to counter the

effects of pollution or the

environment on the skin,

but this gure rises to 48%

of women aged 65+. In the

US, the gures are 39%

on average, rising to 49%

of women aged 65+.

Chinese consumers also

recognise the effects of

pollution on their skin. At

least a quarter of Chinese

women aged 20-49 who

use bodycare or handcare

products said that anti-

irritation, healing or

soothing, and antibacterial

claims are important when

purchasing products. This

could be a useful avenue

for brands looking to

reverse the usual pattern,

whereby usage of skincare

and make-up drops once

women hit their mid-60s.

The positioning of skincare

products for pollution

protection has recently

taken a softer approach,

incorporating “ghting

urban irritants” as one of

many claims in a multi-

functional product, rather

than being a stand-alone

claim area. This is in

contrast to products

launched a few years

ago which were much

more single-purpose

oriented when it came to

pollution. Major brands

such as L’Oréal, H2O+

and Oriame have recently

launched products into the

Southeast Asian market

that claim to protect

against environmental

stressors such as pollution

and UV protection, along

with other claims relating

to moisturisation and

improving complexion.

The positioning of skincareproducts for pollution protectionhas recently taken a softer

approach, incorporating “fghtingurban irritants” as one of manyclaims in a multi-functionalproduct, rather than being astand-alone claim area.

6 7Trends 2015 SOUTHEAST ASIA

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5/18

WHERENEXT?Consumers are already

embracing apps that

scrutinise a product’s

environmental credentials,

and we expect this

concept to grow in the

food and beverage market.

Meanwhile, we can

expect protective claims

against PSI/API to grow in

Southeast Asian product

marketing in skincare

and across other sectors.

Expect consumers to care

more about apps that

measure food miles and

cleaning products made

from ‘all natural’ ingredients

like lemon, vinegar and

baking soda, as well as

buying into foods and

beauty products that make

‘protection from pollution’

an actual product claim.

We’ll see more

technological solutions in

the form of self-cleaning

surfaces, using permanent

treatments to enableooring, worktops and

windows to repel dirt and

grime. We’ll also see more

wearable devices – and

clothes – that measure,

guard against and combat

dangerous levels of air

pollution. In advertising

we’ll see more initiatives

like billboards that ght

pollution, as well as

homes, ofces and even

shop frontages made

from materials that absorb

carbon, reect heat or

absorb light to emit it

at night time. We’ll also

continue to see a major

uptake of LED lighting

systems in the home, retail

and ofce space.

In the automotive sector,

it’s possible we may see

repeats of the Parisian

anti-smog experiment of

March 2014 that saw the

city authorities reduce

trafc by 50% after

levels of minute particles

of PM10 emitted by

diesel exhausts reached

more than double the

designated safe level

of 80 microgrammes.

Smaller electric cars,

ride share services and

urban biking schemes will

receive backing and brand

sponsorships. Water purity

– from manufacturing,

to agricultural run-off, to

home waste – will seeefforts to reduce the

incidences of chemical

fertilisers, microbeads in

cosmetics or chemicals

in personal care soaps

or household cleaners

polluting our waterways.


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6/18

GETHEALTHY

WHAT’SHAPPENINGIN 2015?The area of functional foods has

seen signicant growth within the

Asia-Pacic region in recent years.

APAC has in fact seen a relatively

high proportion (8%) of functional

food launches in the last ve years,

compared with the 6% seen globally.

Japan is often credited with creating

the term “functional foods” in the

late 1980s. Japan is the only nation

that has legally dened functional

foods and the Japanese functional

food market is now one of the most

advanced in the world. For those

reasons, developments in Japanare often cited as indicative of

possible developments in Europe

and the United States. The growth

of functional foods in Southeast Asia

(SEA) is affected by malnutrition from

both over-nutrition and under-nutrition,

so looking at the health needs of

consumers can be a complex issue.

Health issues such as hypertension,

high cholesterol and diabetes are

key concerns and on the rise in many

SEA nations, while under-nutrition

and poor immunity, especially in rural

areas, are also an essential focus for

most SEA countries.

Asian consumers have different

behavioural patterns than those from

other parts of the world. In Europe

and the United States, for example,

consumers choose their functional

beverages based purely on the

drink’s health benets, its ease of

use and price point. In Asia, there is

a fourth factor of ‘localisation’. Asian

consumers consider how much

they identify with the ingredient,

linking purchase decisions to their

own cultures. In fact, there is a

preference for ‘local ingredients’ – for

instance, a preference for avocado

in ANZ, pineapple-based avours inthe Philippines, and jasmine tea in

Indonesia. In addition, each country

in Southeast Asia tends to look at

functional beverages from a different

perspective. For instance, while

Indonesia focuses on fortied ready-

to-drink (RTD) tea for beverage sales,

Thailand is an energy drink market.

Consumers are becoming moreinformed about their health and areincreasingly seeking out superfoods freefrom chemicals and additives.


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7/18

WHYCONSUMERSWILL BUYINTO THISA growing ageing population means

there is a greater need for products

which deliver functional health

benets. In Japan, the number of

people aged 65 or over rose by 1.1

million to 31.9 million, accounting

for 25.1% of the population. India,

China, Indonesia and Japan are

four out of the top ve nations with

the highest number of diabetes

cases and predicted estimates for

2025 indicate that these countries

will continue to see high incidence

of diabetes. This also creates an

opportunity for manufacturers to

develop more functional food items

that offer preventative benets for

such health issues. An ambitious

plan was launched in Vietnam to

increase the average height of men

and women by about 6.35cm over

the next 25 years. This has also

led to the need for more fortied

foods and in particular, foods that

offer benets for young children and

youth in general.

India, China,Indonesia and Japanare four out of thetop fve nations withthe highest number

of diabetes case andpredicted estimatesfor 2025 indicatethat these countrieswill continue to seehigh incidenceof diabetes.


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8/18

WHERENEXT?There has been a 17% increase

of food and drink launches with a

functional claim in Southeast Asia

between 2011 and September 2014;

this supports the trend that more

people are focussing on health and

wellness. The key sub-categories of

food and drink launches in Southeast

Asia that have used functional

claims over the last two years are

growing-up milks (8%), tea (7%),

and avoured milks (5%), followed

by baby formula and milk. The

baby formula and growing-up milks

reect manufacturers’ focus on the

young population, especially in the

Philippines, Indonesia and Vietnam.

These products are also in the news

(and on the rise) in China an d Korea.

Growing-up milks and baby formula

are positioned as assisting the

physical and cognitive development

of children.

In line with government initiatives

in Vietnam and to meet consumer

demand for products that are fortied

with nutrients, enhance children’s

resistance, and help children’s

development, baby food launchesin Vietnam focus on promoting

functional claims. Functional was

the top claim category for baby

food launches in Vietnam, with

76% of products launched between

January 2010 and September 2013

featuring a claim from the category.

In Malaysia, nearly three in 10

rice products launched in 2013

were high in bre. Many of these

products made claims relating to

cardiovascular and digestive health

and diabetes.

Globally, India has seen the highest

number of food launches (18%) with

cardiovascular claims in the last

two years. Vietnam and Thailand

are the other two Asian nations

that feature among the top 10

countries with cardiovascular food

launches. In 2015 and beyond,

we are bound to see much more

innovation within functional food and

drink in the Southeast Asia region.

As health awareness grows within

Southeast Asia, consumer interest

and need for these types of products

will only increase further. Local

ingredients and localised positioning

of functional products will also aid

further growth of these types of

products within the region.

Functional wasthe top claimcategory for babyfood launchesin Vietnam, with76% of productslaunched between

January 2010 andSeptember 2013featuring a claimfrom the category.


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9/18

GETNATURAL

WHAT’SHAPPENINGIN 2015?

Asia-Pacic has seen a signicant

rise in food and drink launches

with natural claims, growing from

6% to 25% in the last ve years.

The Southeast Asia sub-region

has grown at a similar pace

when it comes to natural food and

drink launches.

Asia has been rocked by a number

of food scares, from harmful

ingredients in baby food in China

to fake eggs and squid found in

Vietnam, to name just a few. The

recent spate of health scandals

is encouraging Asian consumers

to turn to natural, organic and

herbal remedies in health and

beauty. This has created new

market opportunities with product

awareness and choice maturing. In a

recent survey by Weber Shandwick,

nearly all respondents in China –

96% – said that they choose to buy

organic food at least occasionally,

if not always. Korea and Singapore

are not far behind with sourcingconsiderations elevated at 90%

and 82%, respectively, of those

surveyed. For China and Singapore,

labelling remains the principal source

of identifying this information.

The natural trend is also likely to

mean more manufacturers will

change from articial to natural

colours in new product development.

Futhermore, on the outside of

package, manufacturers will further

utilise colour to communicate

healthiness to attract consumers.

Multi-national brands are researching

and investing in non-caffeine natural

energy sources, exploring the use of

herbal ingredients used in Traditional

Chinese Medicine (TCM) that provide

fatigue-relieving benets. PepsiCo

have a patent for a caffeine-free

beverage with herbal extracts of Duan-

Gen-Wu-Jia (similar to Ginseng),

Gou-Qi-Zi (Goji or Wolfberry), and

Huang-Jing (Solomon’s Seal), that

were reported to increase energy

levels when combined. Nestlé Health

Sciences have formed a 50/50 JV

with Chi-Med – Nutrition Science

Partners; this could also lead to

further developments into herbal

energy combinations.

The global organic personal care

products market witnessed steady

growth in recent years due to

increasing consumer concerns

regarding personal health and

hygiene. Asia-Pacic is expectedto be the fastest-growing region at

an estimated CAGR of 9.7% from

2012 to 2018, due to rising consumer

incomes, changing lifestyles and

increasing awareness and demand for

organic personal care products. Japan

and China dominated the Asia-Pacic

market, together accounting for over

64% of market revenue in 2011.

Food scares, changing lifestyles and risingincomes have elevated Asian consumers’awareness of what’s in their food andpersonal care products and their meansto control what they buy. 2015 will seeconsumers increasingly return to naturaland often traditional, ingredients.


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10/18

WHYCONSUMERSWILL BUYINTO THIS

In Singapore, The Health Promotion

Board (HPB) ran a campaign around

the dangers of eating hawker food,

which is known to be greasy and salty.

Initiatives like this one contribute to

increasing overall awareness around

healthier lifestyles. Within the rst

three months of 2014, at least ve

juice cleanse businesses popped up

in Singapore. They offer fresh and

cold-pressed fruit and vegetable juice

mixes. These businesses are building

awareness around the belief that

the cold-press mechanism is the

healthy way, leading to an increase

in consumer demand for this type

of product.

The detox movement in Malaysia has

its grassroots in do-it-yourself enzyme

drinks. A strong community exists

in the country teaching its members

how to make health enzyme drinks

themselves. Lately, juice cleansing

has emerged as the next juice

detoxication trend. Service providers

such as Lifestyle Juicery and Reboot

offer raw, pressed juices in convenient

bottle format, targeting discerning,

busy consumers with their one-, two-,

four-day juice cleansing programmes.

Indonesians believe in the efcacy of

jamu or traditional medicine, which is

made from natural materials including

roots, leaves and fruits. Nearly half

(49%) of Indonesians aged 15 and

above consume jamu, according to a

study by the Health Ministry in 2010,

with about 5% consuming it every

day. One of the latest trends is the

mangosteen fruit. The rind is prized

for its array of polyphenolic acids,

including xanthones and tannins.

The application of mangosteen rind

extracts can now be found in products

such as health tonics, tea, health

capsules and juices.


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11/18

WHERENEXT?The trend towards natural colours has

been reected in launch activity over

the past year in Vietnam and is likely

to continue to increase, especially as

it moves into other categories. Most

innovation in natural colours has

been in sweet biscuits and cookies,

pastilles, gums, jellies and chews, as

well as table sauces. Neighbouring

Southeast Asian countries are also

likely to be inuenced by natural

colour trends in Vietnam.

Naturalness will continue to be

an overriding trend, inuencing

the type of ingredients used in

formulations. Natural sweeteners

and natural colours will continue

to be featured in new innovations,

while the search for natural caffeine

and natural non-caffeine energy

sources will continue to see more

traditional herbal medicines being

explored. Incorporating foods with

intrinsic health properties is an ideal

way for manufacturers to leverage

‘naturalness’ and for some ingredients

to provide functional health benets.


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12/18

GETSMARTThe world of synced devices, homeappliances and wearable technologywill start to become mainstream, astrusted companies move into themarket and join the convenience-driven, data collection revolution

WHAT’SHAPPENINGIN 2015?Smart devices – from watches to

ceiling fans – appeal to consumers

because they save time and money,

promise convenience and control and

– in our age of digital navel-gazing

narcissism – knowledge and self-

analysis. What’s changing is that this

is no longer the domain of start-ups

offering home hub hardware – the

major players are now embracing

the trend and raising consumer

condence in it.

Apple and Google are both

introducing ecosystems to compete

for leadership in the connected

home. Apple’s Homekit software/

app creates a framework that will

enable consumers to use Siri voice

commands to control smart lighting,

doors, thermostats and other home

appliances, operating on Bluetooth

Low Energy and managed through

any modern Apple device. Meanwhile,

Google-owned Nest – the pioneering

manufacturer of internet-connected

thermostats and smoke alarms –

has created its own open-sourced

framework, Thread, also designed to

allow smart devices to communicate.

Samsung’s forthcoming SmartHome

ecosystem will compete on the

same grounds, using the brand’s S

Voice software, and the brand has

opened up its system to thousands of

new developers.

Retailers are also pushing synced

devices, with Sears currently testing

a connected device department in its

stores, ahead of a planned expansion

in 2015.

New software is also coming onto

the market to make it easier for

consumers to sync their mobile

devices with their health-monitoring

tools and home appliances. Google

Fit will provide a centralised activity

tracker to compete with Apple’s iOS8

software and HealthKit app, bringing

users’ data from various tness

devices into a single location, helped

in its development by the participation

of Nike, Jawbone and Fitbit.

A host of new product launches in

2015 – from tablets to smart watches

and smart TVs – will also pique

consumer interest in syncing up.

2 Google Fit1 Philips Hue

1 2


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13/18

1

1

Nest Thermostat and Airwave

Google is launching Android TVs,

while LG is launching a new webOS

operating system for smart TVs.

LG is also tipped to be launching a

Flex 2 smartphone, while Samsung

is expected to introduce a foldable

tablet and Lenovo will

present a new wearable

device at CES 2015.

Beyond that, the

Apple Watch is sure

to give wearable

app development a

further boost ahead of

its retail launch in 2015.

It’s important to consider that

smart devices needn’t be about

health or home economics – they can

be about aesthetics and ambience

as well. We’re also going to see

oPhone ‘scent messaging’ devices

go on sale, t heoretically allowing

consumers to remotely fragrance their

homes or send odours as a form of

communication. Ralph Lauren is the

rst mainstream fashion/sports brand

to work with wearable technology,

having designed a polo shirt to be

worn by ball boys and a collegiate

player at the US Tennis Open,

featuring sensors knitted into the core

of the product to read biological and

physiological information.

Network providers and the authorities

are also making it easier for us

to remotely connect to our smart

devices. AT&T is aiming to bring 4G

Wi-Fi to planes across the US in

late 2015, while British Airways is in

negotiations with satellite operator

Inmarsat to provide a similar pan-

European version of a high-speed air-

to-ground internet service and the UK

Government are set to commence a

£90 million investment to boost

internet signal across the

country’s train network.

Putting our smart

devices to use

could get easier as

network providers and

government authorities

are adding Wi-Fi on planes

and trains, allowing people to be

connected anywhere, anytime and

making it ultra-convenient for us to

“Get Smart”. The Land Transport

Authority in Singapore has committed

to rolling out free Wi-Fi across 28

MRT stations over the next nine

months. The process has begun with

three major stations launching Wi-Fi

in August 2014.

Consumers are also using smart

devices to improve convenience

levels on everyday activities, such

as Loyalty Apps, of which Perx in

Singapore is a great example. Perx is

easy to use for both merchants and

customers, with consumers scanning

a QR code in-store which acts as avirtual punch in the customer’s online

loyalty card.


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14/18

AIRLINES WITHIN-FLIGHT WI-FI

Air Canada

British Airways Lufthansa Emirates

Etihad

Gull Air

Qatar Airways

Aerooy

Transaero

All Nippon

Airways

JAL

Norwegian

SAS

TAP

Portugal

Aer Lingus

Icelandair

Tam Libyan Airlines Turkish Airlines Oman Air

Saudi

Air China

THAI Airways

Singapore

Airlines

HongKong

Airlines

Garuda

Indonesia

Cebu Pacic

Philippine Airlines

Mango Airlines

AirTran

Alaska Airlines

American Airlines

Delta

Frontier Airlines

JetBlue

Southwest Airlines

United

US Airways

Virgin America


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15/18

WHYCONSUMERSWILL BUYINTO THISGlobally, smart devices have already

been adopted by consumers to

a degree, but the potential is far

greater. Over one in ve (21%) UK

adults already use either a wearable

device or a health-related mobile

app, but as many as 40% of Brits

are interested in a device that

tracks heart rate, blood pressure

and movement. Meanwhile, 13% of

Chinese consumers say that they

have a wearable digital product in

their household.

In the UK, 76% of potential TV

buyers are interested in a TV with

the ability to wirelessly stream

content from other devices, while

28% would pay more for this feature.

In addition, 34% of UK refrigerator

shoppers expect or would pay more

for a barcode reader that syncs to

online shopping.

In the US, Mintel’s data reveals that

consumers are already thinking

about how their devices sync as part

of their research and purchasing

process: 40% of consumers would

like to buy technology products

that easily connect to products they

already have and 59% of consumers

would be interested in using an app

or website to control their home.

Furthermore, 31% expect or would

pay more for refrigerators that

assess their contents and provide

recipe suggestions.

We’re certainly seeing evidence

that North American consumers are

purchasing and using smart devices:

22% of all US consumers have

purchased a wearable device, such

as smart watch or Fitbit.

One in 20 (5%) Canadian consumers

already use a wearable device that

tracks heart rate, blood pressure and

movement, and 37% say they would

be interested in using such a device.

WHERENEXT?In 2015 and beyond, we’ll see

smart devices advancing into new

annexes. Wearable technology will

have to transcend the convenience

of connectivity and offer wearable

devices that are both secure and

fashionable. Indeed, increased

adoption of wearable devices

might force more conversations

regarding regulations about digital

device etiquette.

Aesthetically, wearable devices are

as much status symbols as they are

data collectors. Nike, Intel, reality TV

series “Project Runway” and Digital

Trends will host the rst Wearable

Technology Fashion Competition in

the US to make wearable technology

more stylish.

Likewise, smart home systems

will go beyond economising utilities

by embracing ambience and blending

in with the décor, which we’ve

already seen from Philips ‘Hue’

LED lighting systems and oPhone

fragrance diffusers.

Overall, we’ll come to expect more

from our smart devices: wearables

that analyse our mental well-being,

smart food and drink containers that

automatically re-order replacements,

and companies that analyse our

data in order to customise services

and costs.

All this constant connectivity will

increase demand for innovations that

help to charge mobile devices on the

go. Security will also be a concern

as consumers become more wary

of placing personal data in the cloud

and on other servers.

To further the purpose behind this

data gathering, analysis

will become a key

area of expansion

for companies –

witness the fact that

Nike+ is backing out

of the actual device

space to focus

on data

and

apps – and people will increasingly

share data with professionals for

analysis. We’ve already seen black

boxes that monitor driving habits,

Russian banks that give preferential

interest rates based on running

data, and MyHealthPal – a platform

that shares a patient’s data on

medication, diet and exercise with

neurologists. Data-collecting devices

will also invite companies to become

analysis providers, and the next

stage will be for banks, grocers

and doctors to do more to develop

data relationships.

Globally, smart devices havealready been adopted byconsumers to a degree, but thepotential is far greater.

1 oPhone Uno

1


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16/18

Nike, Intel, realityTV series “ProjectRunway” and DigitalTrends hosted the frstWearable Technology

Fashion Competitionin the US to makewearable technologymore stylish.

1 Wearable Technology

Fashion Competition

Photography by Jeff Wong


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17/18

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Consumer Trends 2015 Sea

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