How can consumer brands win price-conscious Southeast Asian shoppers?

Price remains the top concern for most consumers.

Southeast Asia’s fast-moving consumer goods industry is projected to underpin nearly $5t in private consumption by 2035, but slowing sales growth and rising price sensitivity are forcing companies to rethink pricing and distribution strategies.

Whilst regional economies continue to expand, consumer goods growth has cooled, according to a report by Bain & Company and NielsenIQ. In value terms, the growth of offline fast-moving consumer goods across six key markets—Singapore, Indonesia, Malaysia, Thailand, the Philippines, and Vietnam—slowed to 2% in the first half of 2025 from 5% in 2019, before the COVID-19 pandemic.

The slowdown has been uneven. Singapore and Indonesia posted slight contractions, whilst Thailand and Vietnam posted modest gains. The Philippines and Malaysia outperformed most peers, though growth remains below pre-pandemic levels.

The divergence reflects differences in inflation, wage growth and consumer confidence across markets.

Shoppers are becoming more cautious. Bain and NielsenIQ found that 42% of consumers are sticking with preferred brands but choosing cheaper variants. About a third are cutting back on consumption, whilst a quarter are switching to lower-priced alternatives.

Separate research by McKinsey & Co. showed price remains the top concern for most consumers in the Asia-Pacific region.

Premium categories continue to hold ground in segments such as beauty, pet care, and baby products. In staples such as dairy, packaged food, and beverages, mass-market products dominate as households manage tighter budgets.

Local brands are gaining share by adjusting pack sizes and price points. Bain and NielsenIQ cited low-priced energy drinks in Thailand and small-format shampoo sachets in Indonesia that account for most category sales.

A Kantar Group Ltd. report showed local brands now command more than half of consumer reach in several Southeast Asian markets, intensifying competition for multinationals.

Yeo Hiap.Seng Ltd.’s Malaysian business generates 78% of revenue outside its home market, whilst Universal Robina Corp. in the Philippines gets 24% of revenue regionally.

Retail channels are also shifting. Traditional trade, including neighbourhood stores and wet markets, still accounts for a large portion of sales, particularly in Vietnam and Indonesia.

Modern trade and e-commerce continue to expand. Platforms such as TikTok Shop have rapidly gained share in Vietnam, Malaysia, and Thailand, accounting for as much as 24% of e-commerce value.

Digital tools are increasingly embedded in the purchase journey. More than half of consumers use online platforms to discover products, compare brands and evaluate options, according to McKinsey.

Bain and NielsenIQ said a large majority are already using or plan to use artificial intelligence tools to support purchase decisions.

Sustainability remains secondary. Most consumers cite cost as the main barrier to buying environmentally friendly products, with limited availability another constraint.

For consumer goods companies, headline economic growth is no longer enough. The priority is defending margins, sharpening price architecture and capturing digital demand in markets where shoppers are more selective and brand loyalty is under pressure.

Questions to ponder: