Can sustainable businesses ride the new waves of consumerism in Asia?
The way people consume information and make purchases in Asia is changing, providing an opportunity for businesses to introduce experiences, services and products that have sustainable principles built into them from the start.
Young people’s voracious appetite for new experiences is well understood by the many marketing professionals and start-ups constantly trying to woo the next generation of consumers with novel products and services. But for those focused on East and Southeast Asian markets, a new, accelerated market of experiential consumption distinct to the region has opened up to those willing to innovate.
Consumerism is increasing continuously in Asia; but the ways in which consumers absorb information and make purchases are changing its very nature by cementing the expectation that it should be entertaining, interactive, and community-led. Asian consumers are also continuously demonstrating that they care about the channels and methods through which products are sold to them, seeing it as an opportunity to downplay the transactional nature of consumption, and to be connected to wider stories and meaning.
This build-up of expectations over the last five years has been cultivated by China’s lead on digital services. The average Chinese citizen spends 209 minutes a day on digital platforms, conducting their lives from their phones (Tencent x BCG data 2018). Regional businesses looking to connect with consumers have been leveraging this technological momentum, combining digital and experiential trends to innovate on delivering the customer journey and experience.
Signals of shifting consumer expectation in Asia
Innovation in social commerce has given birth to shopstreaming, which enables sellers to explain their products through livestream and respond in real-time to questions posed by their potential buyers. E-commerce giant Alibaba’s Rural Taobao platform, for example, has used the popularity of the format to empower rural producers of kumquats. By enabling them to infuse their personalities and stories into marketing – while at the same time having two-way conversations live with consumers on how to best utilise and consume their products – the producers are being directly connected to urban consumer markets, and no longer locked into inequitable value chains.
Well-designed digital platforms have also enabled the rise of the sharing and rental economy in Asia by simplifying complex logistical processes and exchanges for consumers, allowing incumbent retailers, such as those in the apparel space, to test drive new circular business models. Style Theory in Singapore and YCloset in China have both successfully harnessed these platforms to introduce the concept of sharing to markets that had a strong preference for ownership.
Asian consumers are also increasingly aware of their role in responding to the climate crisis and exploitation within supply chains, and scrutinise the commitments and values demonstrated by retailers and other outlets. In the age of livestreaming and Instagram, consumer experiences that allow people to signal these virtues give immediate social validation and encourage behaviour. The pop-up Waste-Pit Bar in a waste management facility in Tokyo, for example, curates cocktail-drinking experiences against a backdrop of the facility’s main processes: garbage sorting and preparation for incineration. This has given regular citizens the opportunity to learn about the city’s waste management and how individuals contribute to issues of waste and recycling in a relaxed environment.
What does this mean for business outside Asia?
These new ways of interacting with consumers are likely to develop into global trends as Asian – and especially Chinese – businesses continue to crack the code for social and experiential commerce, raising consumer expectations in other parts of the world. Given consumers’ expectations for innovation in this space, how can businesses wanting to sell sustainable consumer products and experiences make use of current modes of consumer engagement to drive impact?
1) Use social connection to enhance transparency: Businesses are increasingly keen to connect with their customers in human ways and demonstrate accountability, but until now have lacked the means to represent the entirety of the business and its supply chain in an effective way. The connective power of social commerce and consumers’ growing need for human-centred consumption experiences could pave the way for businesses to build these relationships and actively connect consumers to their stories as a form of radical supply chain transparency and empowerment.
2) Use experiential innovation to support behaviour change: For businesses looking to partner with their customers in order to tackle complex sustainability challenges, incorporating the use of experiential innovation into the customer journey can be useful in capturing attention and drawing customers into conversations about user behaviour. Innovative brands can make use of such data to understand how they can be best positioned to influence behavioural changes such as the end of the throwaway culture.
3) Use smaller brands to drive innovation: Finally, companies can learn to tap into consumers’ new expectations to drive demand for sustainable products and enable smaller, more niche brands to connect directly with a larger audience. These smaller brands can then use this connectivity to quickly understand consumer needs and refine their business models. The increased flow of conversation between those who have designed and produced goods and services, and their consumers, can then result in the kind of powerful innovation and behaviour change that businesses are so keen to achieve.
Changing consumerism in Asia is one of seven megatrends identified in Forum for the Future’s recent Future of Sustainability report as having a very significant role in shaping the future. Find out more here.
Jiehui Kia is a Principal Strategist, and LiLin Loh is a Strategist at Forum for the Future Apac.Forum for the Future