A recent study by UOB, in collaboration with the Boston Consulting Group, reveals that over 42% of Thai consumers are increasing their spending on essential items, while younger demographics are gravitating towards experiential purchases. This trend is outlined in the Asean Consumer Sentiment Study (ACSS), which analyzes consumer behavior across Thailand, Singapore, Malaysia, Indonesia, and Vietnam.
Yuttachai Teyarachakul, head of personal financial services at UOB Thailand, emphasized the findings’ implications for financial preparedness, noting the significant pressures from high inflation, rising household costs, and dwindling savings faced by consumers.
Inflation emerged as the predominant concern, with 64% of Thai respondents identifying it as a major issue. Additionally, 60% expressed worries about escalating household expenses, and 58% reported concerns over decreasing savings. Approximately half of those surveyed are cutting back on non-essential spending, while 45% are actively seeking alternative income sources. Moreover, 44% have started looking for discounts and special offers while shopping.
In contrast to these economic challenges, there is a notable shift towards prioritizing experiences rather than luxury goods. More than 40% of respondents indicated increased spending on experiences such as travel, fine dining, concerts, and festivals over the past year, with Gen Z and Gen Y consumers leading this trend at rates of 56% and 45%, respectively.
Data from Visa Thailand corroborates this shift, showing a 9% decline in luxury spending but a nearly 3% increase in spending on experiences among UOB Visa cardholders. The most popular categories for experiential spending include dining, travel, and entertainment, with entertainment experiencing a remarkable 57% growth.
International travel remains a significant aspect of this trend. The ACSS 2024 indicates that 58% of Thai consumers traveled abroad within Southeast Asia last year, favoring destinations such as Singapore, Vietnam, and Malaysia. Visa Thailand reported a 5% year-on-year increase in cross-border card billings from July 1, 2023, to June 30, 2024, primarily driven by travelers to Southeast Asia, Japan, China, and France.
Despite this rise in experiential spending, the survey also highlights a strong commitment to saving among Thai consumers. About 57% reported maintaining emergency funds covering at least three months’ expenses, surpassing the regional average of 54%. Notably, younger generations are focusing more on wealth preservation through savings and investments compared to older consumers.
In the first half of 2024, UOB Thailand recorded a 52% year-on-year increase in deposit accounts among Gen Z customers, while accounts held by Gen Y customers rose by 27%. Additionally, the number of Gen Z investors surged by 129%, and Gen Y investors increased by 23%. Direct offshore investments by these groups rose collectively by 10%, with foreign investments through Thai-registered funds climbing by 14%.
Yuttachai expressed optimism about young Thais’ commitment to financial security through savings and investments. However, he also highlighted the ongoing need for improved support in areas such as health insurance.
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