Premiumization has developed as an excellent way forward for the brands to make consumers feel valued and special in the Asia-Pacific (APAC) region as the consumers are preferring and consuming high value products, says GlobalData, a leading data and analytics company.
Across the FMCG sector, be it food, or beverages, the brands are releasing new premium products along with exclusive offerings that elevate them above the national mass brands and compete as recognized premium products.
With the socio-eco diversification, the purchasing behavior of consumer has totally altered in different countries of the same continent. For instance, 76% of consumers in China typically relish the opportunity to consume the highest-quality food & drink, often justifying a higher price point.
Shagun Sachdeva, Consumer Insights Analyst at GlobalData, says: “Asia-Pacific region has huge potential for growth due to population growth, rapid urbanization and rising disposable incomes in its emerging economies. High on the list of consumer preferences are high quality products with a luxurious feel and the products that offer greater convenience. The consumers also prefer to have products that pass stringent safety standards and are produced with environmentally sustainable practices.
Adapting to the changing demands and values of today’s modern shoppers, brands have realized the need to upgrade to premium offerings. Manufacturers have their eyes set on the premium market and targeting the middle-to-high income segment through host of value-adds to lure people to upgrade.”
According to GlobalData, Clothing/Footwear is one category where premiumization trend is more apparent followed by holiday and travel bookings. Around 88% consumers in China are willing to pay a premium price for clothing/footwear as the fashion industry over there is constantly innovating itself with top designers experimenting with new materials. In Thailand, around 67% consumers feel to pay a premium price for healthcare and beauty/grooming products as they desire for additional dexterity and style, driving premiumization within this sector.
Sachdeva concludes: “While premiumization is not a new trend to be seen, what has changed is the motivation behind consumers’ purchasing decisions. Premiumization, at its core, is all about priorities and what matters to the consumers. Brands that are quick to know the consumers’ priorities can capitalize on creating their USPs and clear difference between commanding a premium and becoming a commodity.”