Findings from UOB’s latest ASEAN Consumer Sentiment Study (ACSS) showed that over two in five Thai consumers (42%) are spending more on essentials, while younger Thais are showing a shift towards experiential spending.
Conducted in collaboration with Boston Consulting Group, ACSS 2024 provides insights into evolving consumer spending trends in Thailand to help consumers and businesses in Thailand and other key ASEAN markets including Singapore, Malaysia, Indonesia and Vietnam navigate current economic challenges.
Yuttachai Teyarachakul, head of Personal Financial Services, UOB Thailand said, “This year’s study underscores the necessity of financial preparedness among Thai consumers as they navigate economic pressures, including inflation, rising household expenses and reduced savings.”
Rising inflation drives consumer caution
ACSS 2024 findings indicate that rising inflation continues to be the primary concern among Thai consumers, with 64% of respondents citing it as a key worry. Additionally, 60% of respondents identified increased household expenses, and 58% noted a decline in savings as a contributing factor. In response, approximately half of the respondents reported reducing their expenditure on non-essential items, while 45% have sought secondary sources of income and 44% have begun actively searching for offers and discounts while shopping.
Growing trend in experiential spending
However, despite the uncertain economic climate, Thai consumers are prioritizing experiences over luxury goods. More than 40% of Thai consumers said they had increased spending on experiences such as travel, fine dining, concerts, events, and festivals, over the past year. The increase in spending on experiences is particularly pronounced among Gen Z (56%) and Gen Y (45%) respondents. Data from Visa Thailand supports this trend, showing a 9% decline in luxury spending but a nearly 3% rise in experiential spending among UOB Thailand’s Visa cards. The top three experiential spendings among UOB Thailand cardholders are dining, travel, and entertainment, which extends to events such as concerts and festivals. Spending on entertainment also exhibits the most significant growth at 57%.
International travel demand stays robust
International travel remained a significant part of experiential spending, with more than half of Thai consumers (58 %) having taken an overseas trip within ASEAN in the past year, ACSS 2024 findings showed.
Respondents also favoured ASEAN destinations like Singapore, Vietnam and Malaysia within the region. VISA Thailand data corroborated this trend, with a five per cent year-on-year increase in cross-border card billings from July 1, 2023 to June 30, 2024 among UOB Visa cardholders, led primarily by travellers to the three ASEAN countries in addition to Japan, China and France.
Younger generations balance spending with savings and investment
Despite the rise in experiential spending, Thai consumers were also displaying a strong commitment to savings. 57% of Thai consumers reported holding emergency funds covering at least three months’ worth of expenses, above the regional average of 54%.
Notably, the younger generations were placing greater priority on wealth preservation through savings and investments than their older counterparts. UOB Thailand reported a 52% year-on-year increase in deposit accounts held by Gen Z in the first half of 2024, while the number of deposit accounts held by Gen Y grew by 27% during the same period. In terms of investing, the number of Gen Z investors more than doubled, jumping 129%, while Gen Y investors increased by 23%. Direct offshore investments by Gen Z and Gen Y UOB Thailand investors collectively grew 10%, with foreign investments through Thai-registered funds rising by 14%.
Yuttachai added, “It is encouraging to see so many young Thais proactively building their financial security through savings and investment. However, there remains a need for additional support in areas such as health insurance. We are committed to empowering young people to achieve their desired lifestyles while ensuring financial sustainability.” – The Nation
