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Consumers expect brands to be more generous as APAC region braces for tougher times ahead

Half of people asked in a regional survey think that economic conditions are going to get worst before they get better, and expect brands to behave more generously towards them during leaner times.

A study involving 8,000 respondents in China, Hong Kong, Singapore, Malaysia, Indonesia, Thailand and Australia found that 78% of respondents believe a slowdown to be happening in their home countries, and 70% think it will 1-2 years or longer.

'Yes, my country has entered an economic slowdown,

% response to the question: ‘Yes, my country has entered an economic slowdown’ Source: YouGov/Starcom/Mediavest

Malaysia is by far the gloomiest of the markets in the study, with Malaysians registering the lowest score for market resilience (see chart, above); 95 per cent of Malaysians asked said their country is experiencing a slowdown.

Because of this uncertainty about the future, brands should finds ways to deliver economic value first, and then look at how to give personal value by being informative and useful, the study by media agencies Starcom and Mediavest, and pollster YouGov, suggested.

The most popular response to the question ‘What can brands do for me?’ was overwhelming be to offered price discounts, particularly in Malaysia and Australia.

Running 2-for-1 promotions and giving out coupons were the next two most highly desired responses.

As for how to manage the conversation between brand and consumer, the use of social media to deliver relevant information was the top choice, particularly in sociable Indonesia, followed by brands explaining their product benefits.

The most popular response regarding the brand-consumer conversation in China was for brands to stop spending on advertising (see centre chart, below).

Question: What can the brand do for me?

Question: What can the brand do for me?

“In a slowdown people tend to become more insular. They are asking brands, what can you do for me?” said Joanna von Felkerzam, Starcom’s regional director of insights, talking to Mumbrella this afternoon.

“Economic value comes first, adding personal value comes second. It’s about price and two-for-one deals. It’s not about gimmicks. It’s not about making people’s lives more complicated and adding to their stress,” she said.

“People are saying: ‘Do what you do best before you create new products for the sake of it. Right now, I’ve only so much in my wallet, and I’m trying to maintain my quality of life.'”

Source: YouGov/Starcom/Mediavest

Source: YouGov/Starcom/Mediavest

The slowdown will have a big impact on individual product and service categories, with luxury likely to take the biggest hit. Entertainment and electronics brands are also likely to suffer, the survey indicates (see chart, right), as people make compromises to sustain their quality of life.

Tellingly, 89% of millennials and 87% of their parents say they will change their buying behaviour because of fragile economic conditions.

People’s expectations are likely to shift tectonically over the next 24 months as job cuts and falling property prices apply further pressure to consumer confidence, von Felkerzam cautioned.

“It is really important to understand that, just because you might be getting the [consumer value exchange] equation right now, it might not be right in a month’s time,” she said, stressing the importance of ongoing market pulse checking.

For the full report, click here.

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