1、Beyond the“Crazy Rich”The Mass Affluent of Southeast Asia The Boston Consulting Group(BCG)is a global management consulting firm and the worlds leading advisor on business strategy.We partner with clients from the private,public,and not-for-profit sectors in all regions to identify their highest-val
2、ue opportunities,address their most critical challenges,and transform their enterprises.Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization.This ensures that our clients achieve sustainable competi
3、tive advantage,build more capable organizations,and secure lasting results.Founded in 1963,BCG is a private company with offices in more than 90 cities in 50 countries.For more information,please visit .November 2018Aparna Bharadwaj,Justine Tasiaux,and Vaishali RastogiBeyond the“Crazy Rich”The Mass
4、Affluent of Southeast Asia 2 Beyond the“Crazy Rich”:The Mass Affluent of Southeast AsiaAT A GLANCESoutheast Asias immense consumer market is being transformed by the rise of the mass affluent,a market of more than 50 million affluent people that is growing faster than the middle class and will prope
5、l strong growth in new product categories.The affluent account for up to 40%of household wealth in key markets,and their similarities make them far more accessible than many brand marketers realize.UNDERSTANDING THE CONSUMER PSYCHEThe regions affluent market is more nuanced than the lavish spenders
6、portrayed in the hit movie Crazy Rich Asians.The vast majority are under age 40,they graduated from the middle class within the past ten years,and they earned their wealth as salaried professionals or business owners.Although some of the affluent spend ostentatiously,others,as they mature,care more
7、about quality and value and seek out niche,harder-to-find brands.COMMON BEHAVIORS OF THE MASS AFFLUENTA remarkably high number of affluent consumers across Southeast Asias markets share similar values and attitudes that are relevant to marketers.Our research also found that they embrace“premiumizati
8、on,”search for quality and value,seek exclusivity,relish immersive experiences,use digital media,and travel frequently.The Boston Consulting Group 3The mass affluent account for up to 40%of household wealth and more than half of the total spending in premium and luxury categories.For Jamesa successf
9、ul Filipino talent agent and former restauranteur who is in his late 40stravel is a passion.It energizes and rejuvenates him.James tries to be on the road at least one week every month.And when he travels,James says,“It is all about dining and shopping.”He reads blogs to stay abreast of trends in de
10、stinations,food,and luxury brands,and he conveys his discoveries to friends who share his passions.James can afford to splurge on luxuryhell buy a Giorgio Armani suit.But what he really enjoys is the hunt for something unique.While shopping during a recent trip to Taiwan,for example,no purchase cost
11、 more than$40.But all items were local brands that couldnt be found anywhere else.In many respects,James fits the profile of what we call the mass affluenta market of affluent consumers in Southeast Asia that represents one of the worlds largest growth opportunities for consumer product companies.We
12、 estimate that 57 million people in this dynamic region have gained affluencethe purchasing power and intent to sharply increase their acquisition of a wide variety of premium and luxury goods and services.The mass affluent account for up to 40%of household wealth in major Southeast Asian markets an
13、d more than half of the total spending in premi-um and luxury categories.Today,these individuals constitute up to only 10%of the population in the regions biggest economies,but by 2030,the ranks of the mass af-fluent are expected to reach 136 million and represent 21%of the population.We believe tha
14、t companies in the region,as well as those outside it,should take a clos-er look at the mass-affluent market and plan to target it.Who Are the Mass Affluent?To understand the mass-affluent market in the ten-member states of the Associa-tion of Southeast Asian Nations(ASEAN)Brunei,Cambodia,Indonesia,
15、Laos,Ma-laysia,Myanmar,the Philippines,Singapore,Thailand,and Vietnamits important to set aside the typical Asian stereotypes:high-net-worth individuals who inherited their wealth or won windfalls in property and security trades and the lavish-spending ultrarich who are depicted in the movie Crazy R
16、ich Asians.Indeed,high-net-worth individuals represent a minuscule minority of the mass affluent.Research conducted by The Boston Consulting Groups Center for Customer Insight,including a survey of about 6,000 affluent consumers and extensive ethnographic qualitative research in six major Southeast
17、Asian countries,found that the majority of mass-affluent consumers are young and savvy.Two-thirds are under 40 years of age,and more than three-quarters graduated out of the middle class within the past ten years and earned their wealth as salaried professionals or business owners.Al-4 Beyond the“Cr
18、azy Rich”:The Mass Affluent of Southeast Asiathough they are starting to buy luxury goods,many are still in the process of trad-ing up to premium products in categories such as personal care,food and beverage,and footwear.So these consumers are relevant not only for luxury brands,such as Chanel and
19、Diageo,but also for companies such as Johnson&Johnson,P&G,Heineken,and adidas.The buying propensity of the mass affluent also tends to be more stable than that of the middle class during times of economic volatility.The buying habits and preferences of affluent Southeast Asians can be quite nu-anced
20、 and often dont follow expectations.Plenty of the regions nouveau riche spend ostentatiously.But most are like James:they buy premium and luxury prod-ucts and care about the status they convey,but these consumers also do careful research to make sure the products are worth the price.They actively us
21、e digital media,but they also enjoy immersive purchasing experiences and make a dispro-portionately high share of their purchases while traveling abroad.How Market Dynamics Will ChangeAs the mass-affluent class replaces the middle class as the driver of growth,the dy-namics of Southeast Asias consum
22、er market will fundamentally change.Categories such as passenger cars,cosmetics,and restaurant dining will become hot growth segments,replacing categories such as household appliances,baby products,and ready-to-eat foods;similar shifts occurred when China experienced a comparable demographic shift.(
23、See The Age of the Affluent:The Dynamics of Chinas Next Con-sumption Engine,BCG Focus,November 2012.)For companies that already consider Southeast Asia to be a major market,the best growth opportunities will be in mass prestige(or“masstige”)products,which convey luxury but are priced more afford-abl
24、y.Demand is also likely to surge for premium products,such as organic moistur-izing creams,rather than mass-market skin care products.For many companies,the prospect of reaching a relatively niche market that is dis-persed across a vast region with a wide variety of languages and cultures may seem d
25、aunting.However,the mass affluent are far more accessible than most companies realize.Because these consumers are frequent travelers and heavy users of digital media,a remarkably high number of them across Southeast Asias markets share similar sets of values regarding what and how they buy.These con
26、sumers also tend to be concentrated in key city clusters.Therefore,they are a more accessible market than the middle class and will likely respond well to a regional strategy.Sizing Up the Mass-Affluent MarketIts important to clarify what we mean by mass affluent.We arent referring only to an income
27、 level.Indeed,many members of the affluent class would not be regard-ed as particularly“rich”by the standards of a developed economy.For example,an affluent Filipino reporting a monthly household income of about$5,500,when measured in local purchasing power,may appear to be in the upper middle class
28、.However,households in Southeast Asian countries often significantly underreport their incomes.So we assessed consumption patterns as well as household income to determine the characteristics of the affluent.Middle-class families,for example,tend to sharply increase their spending on indulgences,suc
29、h as snack foods and The mass affluent are far more accessible than most companies realize and will likely respond well to a regional strategy.The Boston Consulting Group 5beverages,as their incomes rise.As middle-class families enter the ranks of the af-fluent,they greatly accelerate their consumpt
30、ion of premium and luxury goods and services,such as cars,liquor,restaurant dining,and travel.Using consumption pat-terns and household income as a gauge,we found that about 5%to 10%of the pop-ulation in each Southeast Asian nation is affluent.The member states of ASEAN had a combined 2017 GDP of$6.
31、5 trillion,making Southeast Asia the equivalent of the fourth-largest economy worldwide behind the US,China,and India.If these ten member states were one country,it would have the worlds third-largest population.Moreover,many of Southeast Asias rapidly de-veloping economies are maturing into middle-
32、income economies,while others are on track to become developed economies.(See Exhibit 1.)The regions economic transition is a major reason for the expansion of the mass-affluent class.For decades,the dominant economic trend in Southeast Asia has been the growth of the middle class.But as countries G
33、DPs have continued to rise,this large middle class has started to graduate to the affluent class.Now,the mass-affluent class is growing faster than any other income segment in the regionand the pace is projected to accelerate.In the regions four most populous economiesIndonesia,the Philippines,Thail
34、and,and Vietnamthe ranks of the mass-affluent class are expected to increase by 8%per year from 2017 through 2030,compared with 4%for the middle class.Over this period,the number of affluent people in those four nations alone is projected to grow from 46 million to 125 million,and their share of the
35、 population is projected to more than double,to 21%.In Vietnam,ASEAN member stateCountry outside Southeast AsiaReal GDP CAGR,20052017(%)12017 Real GDP per capita(logarithmic scale)2012345678910 Vietnam Turkey US UK Thailand South Korea Sweden Japan Czech Republic Brunei Brazil Cambodia Laos Myanmar
36、Malaysia Singapore Philippines Indonesia Russia India CanadaFrontiereconomiesRapidly developingeconomiesMiddle-income economiesDevelopedeconomiesChinaSources:Economist Intelligence Unit;World Bank;BCG analysis.Note:ASEAN=Association of Southeast Asian Nations.Countries are categorized on the basis o
37、f real GDP per capita:frontier economies(less than$1,500 per capita),rapidly developing economies($1,500 to$4,000 per capita),middle-income economies($4,000 to$12,500 per capita),and developed economies(more than$12,500 per capita).Countries outside Southeast Asia are included for comparison only.1R
38、eal GDP was calculated in 2010 US dollars.2Real GDP per capita was converted to a logarithmic scale(base 10).Exhibit 1|Economic Maturation Is Creating a Significant Market of Mass-Affluent Consumers6 Beyond the“Crazy Rich”:The Mass Affluent of Southeast Asiafor example,16%of the population will be a
39、ffluent by 2030,compared with 5%now;this proportion is projected to jump from 9%to 21%in Indonesia.The mass affluent already constitute a critical market.They control anywhere from 20%to 40%of household wealth in the most populous economies,and this share is likely to rise sharply to about 30%to 65%
40、for key Southeast Asian markets by 2030.In the Philippines,for example,we project that the affluent will control 64%of household wealth by 2030.(See Exhibit 2.)These consumers are impacting some categories more than others.In Indonesia,for example,the affluent already ac-count for a significant amou
41、nt of all spending on restaurants(42%);leisure and travel(46%);watches,jewelry,and eyewear(49%);and cars(53%).The mass-affluent class is also particularly resilient during difficult economic times.While most con-sumers tighten their budgets during economic slowdowns,the spending of these consumers t
42、ends to remain steady or continue to increase.Understanding the Consumer PsycheThe overwhelming majority of mass-affluent Southeast Asians are millennials:64%are under the age of 40,and 24%are younger than 25.They have also worked for their wealth.The percentage of salaried professionals ranges from
43、 50%in Indone-sia to 86%in Singapore.Business owners constitute the second-biggest cohort.A surprisingly small percentage of peopleless than 5%inherited their wealth,ex-cept in Thailand,where a greater proportion has family wealth.In addition,less than 10%gained affluence through investment earnings
44、.The affluent also tend to live in urban centers more than the members of other income groups do.About 80%of Vietnams affluent live in cities with populations of at least 1 million,for example.PopulationHousehold wealthAffluent share(%)20172030020406080Affluent share(%)20172030020406080Affluent shar
45、e(%)20172030020406080Affluent share(%)20172030020406080105109212816174046203964314632PhilippinesThailandVietnamIndonesia4X4X4X3.5XSource:BCG analysis.Note:The amount of household wealth required to be in the mass-affluent class varies by country.To determine the household wealth of the mass affluent
46、,we considered reported monthly household income,consumption patterns,and purchasing power for a basket of goods.Exhibit 2|The Affluent Control a Disproportionate Share of Household WealthThe Boston Consulting Group 7Despite the regions immense cultural and economic diversity,we found that the mass
47、affluent have strikingly similar views on lifestyle topics and attitudes toward work.These similarities are fostered by their use of social media(where they keep one another abreast of new products and fashion trends and share opinions)and their travel experiences.By margins ranging from 80%to 90%,f
48、or example,the af-fluent consumers we surveyed in Indonesia,Malaysia,the Philippines,Singapore,Thailand,and Vietnam agreed that they want to buy products and have experienc-es that differentiate them from others.We also found widespread agreement that balance is important and that they would rather
49、enjoy life now than worry about the future.Even so,the respondents broadly concurred that they dont purchase luxury brands just because such products are part of their lifestyle.These senti-ments suggest that the affluent want a luxury lifestylebut one that they define themselves.(See Exhibit 3.)How
50、 long individuals have been part of the mass-affluent class influences them more than their country of origin does.Indeed,we found that those who have been affluent for more than ten years have grown more accustomed to their status and gained experience as consumers.As a result,these“experienced aff