More than two in five Thai consumers (42%) are increasing their spending on essentials, while younger Thais are shifting towards experiential spending, according to UOB's latest Asean Consumer Sentiment Study (ACSS).
Conducted in collaboration with Boston Consulting Group, the study offers insights into changing consumer spending patterns in Thailand, Singapore, Malaysia, Indonesia and Vietnam.
Yuttachai Teyarachakul, head of personal financial services at UOB Thailand, said the findings highlight the importance of financial preparedness for Thai consumers facing pressures such as high inflation, rising household costs and decreased savings.
The study found inflation remains the leading concern among Thai consumers, with 64% of respondents identifying it as a priority. Some 60% said higher household expenses were a concern, while 58% pointed to a decline in savings.
About half of the respondents indicated they are cutting back on non-essential expenditures, while 45% are seeking additional sources of income and 44% have begun looking for discounts and special offers while shopping.
Despite the challenging economic environment, Thai consumers are prioritising experiences over luxury items. More than 40% of respondents reported increased spending on experiences such as travel, fine dining, concerts and festivals over the past year.
This trend is particularly notable among Gen Z (56%) and Gen Y (45%) consumers.
Data from Visa Thailand supports this trend, revealing a 9% decline in luxury spending, but a nearly 3% increase in spending on experiences among UOB Thailand's Visa cardholders.
The top three categories for experiential spending among these cardholders are dining, travel and entertainment, with spending on entertainment showing the most substantial growth at 57%.
International travel continued to be a significant component of experiential spending. According to ACSS 2024, 58% of Thai consumers took overseas trips within Southeast Asia in the past year, with popular destinations including Singapore, Vietnam and Malaysia.
Visa Thailand data validates this trend, showing a 5% year-on-year increase in cross-border card billings from July 1, 2023, to June 30, 2024, among UOB Visa cardholders. This growth was primarily driven by travellers visiting Southeast Asia, as well as Japan, China and France.
Despite the increase in experiential spending, the survey found Thai consumers are also demonstrating a strong commitment to saving.
Some 57% of Thai respondents reported maintaining emergency funds that cover at least three months' worth of expenses, surpassing the regional average of 54%.
Younger generations are prioritising wealth preservation through savings and investments to a greater degree than their older counterparts.
UOB Thailand recorded a 52% year-on-year increase in deposit accounts held by Gen Z customers in the first half of 2024, while the number of deposit accounts held by Gen Y customers rose 27% during the same period.
The number of Gen Z investors more than doubled for the period, soaring by 129%, while Gen Y investors grew by 23%.
Direct offshore investments by UOB Thailand's Gen Z and Gen Y investors collectively increased by 10%, with foreign investments through Thai-registered funds rising by 14%.
Mr Yuttachai said it is encouraging to see so many young Thais building their financial security through savings and investment.
However, he said there is still a need for additional support in areas such as health insurance.