Cash rich SE Asian ‘centennials’ flock online, as their monthly shopping bill nears US$40b
- Half of region’s 277 million born since 1995 spending US$30 a month
- 56pc still using cash on delivery as their chief form of payment
Half of Southeast Asia’s 277 million “centennials” spend US$30 a month on online shopping, and now account for nearly a fifth of the annual online spending of Japanese consumers, according to a new retail survey.
“Here Comes the Centennial: Southeast Asia's New Generation of Shoppers” has been published by major advertising agency Dentsu Aegis Network and digital marketing consultant, Econsultancy.
“US$30 a month amounts to a significant spend,” said Arvind Sethumadhavan, Dentsu Aegis Network’s chief strategy and innovation officer in Asia-Pacific. The study defined centennials as those born since 1995.
Sethumadhavan also noted that with 9 per cent of that snapshot spending over US$100 a month online, their total expenses were estimated to hit US$39 billion.
Data from market research company Euromonitor showed that online purchases of Japanese consumers amounted to US$226.78 billion last year.
The Dentsu Aegis Network poll, conducted in August, involved 3,055 consumers aged 16-23 from Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.
Centennials, the study added, like to get information from the internet fast, and are likely to support “ethical” and “sustainable” products.
The increase in the use of smartphones and high-speed internet made it easy for them to research online.
But cash remains king, with 56 per cent using cash on delivery as their mode of payment, followed by credit/debit cards (48pc), and paying at a convenience store (17pc).
Sethumadhavan said that with the region largely “unbanked”, cash on delivery is the most obvious mode of payment, but that the use of alternative payment methods such as bank transfers and e-wallet will nearly double by 2021.
Centennials, however, are likely to be put off by apps that are slow and confusing.
“The expectation of centennials is that their experience online should be easy, and it should also act as the first place for finding products,” the study said.
The survey also found 82 per cent of centennials are interested in products that are ethical and sustainable, and 70 per cent in local products.
Analysts agree that so-called “generation Z” shoppers (those born between 1995–2014) are more likely to shop online, as the options open to them increase.
However, Pascal Martin, a partner at OC&C Strategy Consultant, said they find centennials to be "less cost conscious” because "they were raised in a more affluent context than millennials and their parents were.”
Abhineet Kaul, senior director at Frost & Sullivan, said centennials are less loyal to brands and engage directly with mobile shopping platforms, "which are generally brand-agnostic.”
"For centennial shoppers in Asia, the availability, peer reviews, costing and delivery terms of the merchandise are still more prominent, as brand loyalty is relatively less well-defined,” Kaul said.