How should brands prepare for Gen Alpha's spending power?

Their spending is projected to reach $3t by 2040.

The Asia-Pacific region’s youngest consumers are set to become one of the biggest spending forces over the next two decades, raising questions about whether brands are prepared for a generation that expects personalised digital experiences whilst wielding growing influence over household purchases.

By 2040, the region will be home to about 965 million Generation Alpha consumers whose spending is projected to reach $3t, according to an April report by Euromonitor International.

Despite declining birth rates, parents are spending more on each child, with retail sales of children's products in the region forecast to reach $142.7b by 2029, accounting for more than one-third of global sales.

“Businesses that understand this generation's context and motivations will be positioned to build long-term advantage,” Euromonitor said.

The research firm said Gen Alpha's preferences are being shaped by Millennial parents, schools, communities and digital platforms.

Having grown up with smartphones, artificial intelligence (AI), and social media, the generation expects seamless, personalised, and convenient experiences, whilst influencers and online creators are playing a growing role in buying decisions.

Research by PricewaterhouseCoopers (PwC) published in March found that 97% of children aged seven to 14 make purchasing decisions independently at least some of the time.

About 72% regularly use smartphones, 70% own a tablet, and children spend an average of 3.6 hours a day on recreational screen time.

The shift is also changing demand for children's health and wellness products. Euromonitor's Health and Nutrition survey found that parents become less confident about their children's diets as they grow older, supporting demand for nutrition products and supplements targeting digestive, eye, and skin health.

Growth opportunities are expected to be strongest in developing markets such as the Philippines, Indonesia, and India, where demand for children's healthcare, nutrition, and food products is forecast to rise.

China and Japan, meanwhile, are expected to see stronger demand in value-oriented categories such as apparel and footwear, alongside softer demand for baby food.

Euromonitor said companies should balance technology with responsible engagement as Gen Alpha matures, calling for stronger privacy protections, safety standards, and age-appropriate digital experiences.

Questions to ponder

1. How can brands build lasting relationships with Gen Alpha without relying too heavily on screen time and social media?
2. As children gain greater influence over household spending, how should companies balance personalisation with privacy and responsible marketing?