Southeast Asia’s private consumption to near $5t by 2035

43% of consumers are cutting back on non-essential household spending.

Private consumption across six key Southeast Asian markets is projected to reach nearly US$5t by 2035, growing at an average of 8% annually, according to a joint report by Bain & Company and NIQ.

The report attributed this long-term growth to rising affluence and accelerating urbanisation, particularly in Vietnam and Thailand, where urbanisation rates are expected to rise by seven percentage points over the next decade.

In the short term, however, consumer sentiment remains cautious. Fast-moving consumer goods (FMCG) category growth softened in the first half of 2025 amid inflationary pressures and weaker sentiment.

According to the study, 43% of consumers are cutting back on non-essential household spending. Among corporate leaders, 52% of CXOs expect slower growth in 2026, citing concerns around competition, macroeconomic uncertainty, and inflation.

For the first time in a decade, Southeast Asia attracted more foreign direct investment (FDI) than China.

In 2023, FDI per capita in the SEA-6 markets—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam—stood at 6.4%, compared to just 0.2% in China.

Consumers are increasingly value-driven. About 42% say they are looking for the same products at lower prices, whilst 25% are trading down to better-value alternatives. Despite this, spending is holding up in select high-value categories.

Consumers are prioritising health and premium segments such as beauty, baby care, and pet products. However, cost remains the top barrier to sustainable purchases, with 53% citing affordability as a key issue.

Digital commerce is rapidly evolving. Social commerce now accounts for roughly 20% of total e-commerce across the region, with platforms like TikTok Shop recording triple-digit GMV growth in Thailand, Vietnam, Malaysia, and the Philippines between 2022 and 2024.

AI is also reshaping the consumer journey, with around 85% of consumers already using or open to using AI for product discovery, price comparisons, and personalised recommendations.

Local and regional brands are gaining ground, commanding more than 50% of FMCG market value across Southeast Asia. Their success is credited to fast, localised innovation and nimble cross-border distribution strategies.

According to Bain and NIQ, companies that succeed in this evolving market will combine “scale-insurgent” strategies with AI, optimise cost-to-value design, and localise product, pack, and pricing strategies. Agility in operations and route-to-consumer mastery will also be critical.