Over two in five Thai consumers (42 per cent) are spending more on essentials, while younger Thais show a shift towards experiential spending, findings from UOB’s latest ASEAN Consumer Sentiment Study (ACSS) indicate.
Conducted in collaboration with Boston Consulting Group, ACSS 2024 provides insights into evolving consumer spending trends in Thailand to support consumers and businesses in Thailand and key ASEAN markets, including Singapore, Malaysia, Indonesia, and Vietnam, as they navigate current economic challenges.
Mr. Yuttachai Teyarachakul, Head of Personal Financial Services at 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 remains the primary concern among Thai consumers, with 64 per cent of respondents citing it as a key worry. Additionally, 60 per cent of respondents identified increased household expenses, and 58 per cent noted a decline in savings as contributing factors. In response, approximately half of the respondents reported reducing expenditure on non-essential items, while 45 per cent have sought secondary income sources, and 44 per cent are actively seeking offers and discounts when shopping.
Growing trend in experiential spending
Despite the uncertain economic climate, Thai consumers are prioritising experiences over luxury goods. Over 40 per cent of Thai consumers reported increased spending on experiences such as travel, fine dining, concerts, events, and festivals over the past year. This trend is particularly pronounced among Gen Z (56 per cent) and Gen Y (45 per cent) respondents. Data from Visa Thailand supports this shift, showing a nine per cent decline in luxury spending but nearly a three per cent rise in experiential spending among UOB Thailand’s Visa cardholders. The top three experiential spendings among UOB Thailand cardholders are dining, travel, and entertainment, with entertainment spending exhibiting the most significant growth at 57 per cent.
International travel demand stays robust
International travel remains a significant part of experiential spending, with more than half of Thai consumers (58 per cent) taking 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 corroborates this trend, with a five per cent year-on-year increase in cross-border card billings from 1 July 2023 to 30 June 2024 among UOB Visa cardholders, primarily led by travellers to ASEAN destinations as well as Japan, China, and France.
Younger generations balance spending with savings and investments
Despite the rise in experiential spending, Thai consumers display a strong commitment to saving. Fifty-seven per cent of Thai consumers report holding emergency funds covering at least three months’ worth of expenses, above the regional average of 54 per cent. Notably, younger generations are prioritising wealth preservation through savings and investments more than their older counterparts. UOB Thailand reported a 52 per cent year-on-year increase in deposit accounts held by Gen Z in the first half of 2024, while Gen Y’s accounts grew by 27 per cent in the same period. In terms of investing, Gen Z investors more than doubled, increasing by 129 per cent, while Gen Y investors grew by 23 per cent. Direct offshore investments by Gen Z and Gen Y UOB Thailand investors collectively grew by 10 per cent, with foreign investments through Thai-registered funds rising by 14 per cent.
Mr. 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.”
To read the full report of the UOB ASEAN Consumer Sentiment Study 2024, please visit go.uob.com/acss2024-th.