Why Thai businesses should listen to the changing voice of the consumer

Piyanat Suanapai
PwC Thailand Spotlight, insights on business and industry trends in Thailand and beyond.

Hello, I’m Piyanat Suanapai, your podcast host.

Businesses must listen to the ‘voice of the consumer’ to understand consumer needs, experiences and expectations with regards to products and services. This information is extremely beneficial to businesses. They can use this knowledge to enhance their products and services, meet consumer needs, create satisfaction and brand loyalty, and ultimately build trust with consumers.

For this podcast, we have Pisit Thantanagul, Chief Executive Officer of PwC Thailand with us to share insights from PwC’s ‘Voice of the Consumer Survey 2024: Asia Pacific – Thailand Snapshot’. The survey findings revealed what Thai consumers are concerned about, how these factors impact their future spending and what product categories they anticipate spending on. Let’s hear from Pisit.

Hello Pisit.

Pisit Thangtanagul
Hello.

Piyanat
What are some interesting themes on consumers’ concerns in this report?

Pisit
For this survey, we had around 500 Thai respondents with about 40% belonging to Generation X. This snapshot is a part of PwC’s global survey that covered more than 20,000 consumers across 31 countries around the world.

Firstly, about 50% of Thai consumers are concerned about macroeconomic volatility, followed by inflation at 53% and cyber risks at 41%.

Compared to Asia Pacific and global consumers, 61% and 64%, respectively, are concerned about inflation. Macroeconomic volatility is the second concern for both. The third isn’t the same for Thailand – whereas Thai consumers are concerned about cyber risks, about 40% of Asia Pacific and global consumers are concerned about climate change.

Piyanat
In your opinion, why are Thai consumers’ concerns different from those of Asia Pacific and global consumers’?

Pisit
I think we must consider Thailand’s context. If we compare inflation, the inflation rate in Thailand has been quite low. The Bank of Thailand hasn’t increased interest rates, maintaining them at 2.5%. In neighbouring countries, the inflation rate is high, so they’re especially concerned about inflation rates. In Europe, including the UK and EU countries, inflation rates exceeded 5%. In the US, interest rates are likely to decrease, with a recent decrease of 0.5% as they have a goal of reducing inflation rates by 1% to 3%. If we exclude fuel imports, Thailand’s inflation rate would be less than 1%. As such, Thai people aren’t as worried about inflation rates as they are about economic impact. They’re worried about whether they can spend, sell or make ends meet.

Piyanat
How do these factors, whether economic or inflation-related, affect Thai consumers’ spending or purchasing decisions?

Pisit
I think when people are worried about the economy and the outlook isn’t so great, they’re more cautious with their spending. Most people prioritise purchasing necessities over luxury items. Approximately 69% of Thai consumers say they’ll spend more on consumer products, followed by 60% on health and beauty products because Thai consumers prioritise taking care of themselves. This is followed by 52% of Thai consumers who’ll spend on electronic devices – as you can see our phones have become a basic need.

Next, Thai people enjoy travelling, so 51% will spend on travel, which is close to the number that will spend on home improvements at 50%. Lastly, 46% will spend on clothes and footwear.

Piyanat
Are there similarities in these spending trends with consumers around the world and in Asia Pacific countries?

Pisit
They’re very similar. Consumers are more concerned about inflation than macroeconomic volatility as inflation reduces the size of their wallet. For example, Chinese consumers used to buy brand name goods, but they no longer do so. This behaviour change had a great impact on brand name sales in China. Fewer Chinese people travel to Europe, also impacting brand name sales in Europe. My friends working with brand names told me sales of these items have been hit hard.

A high number of Thai consumers use the internet, so they compare prices across different channels and search for promotions and discounts to find the best products. Moreover, Thai people are willing to spend on health products and items that enhance their lifestyle so businesses should focus on health-related products and services.

Piyanat
You mentioned online shopping, which also includes spending on social media platforms. Is Thai consumer spending on online channels similar or different from consumer spending trends in Asian Pacific countries?

Pisit
Thai consumers stand out compared to those in the region on making purchases through social media platforms: 73% of Thai consumers have purchased products through these platforms, whereas only 56% of Asia Pacific consumers have done so.

Thai consumers use social media platforms to review products and make comparisons before deciding on what to buy. They follow influencers and their recommendations. Up to 82% of Thai consumers use social media to search for new brands, with 62% purchasing products or services recommended by influencers.

Despite a high number of Thai consumers making purchases through social media, a whopping 77% have expressed concerns about privacy and data sharing on these platforms, including hackers with negative intentions.

Piyanat
Another interesting and trending issue is climate change. It seems that Thai consumers are more aware of this matter. How did this report reflect this?

Pisit
This finding was astonishing. The sustainability trend or concern over climate change from rising global temperature due to greenhouse gas emissions is prominent in Europe, but it isn’t a focus in Asia. From this report, almost 60% of Thai consumers chose to buy eco-friendly and sustainable products, and are willing to pay up to 11.7% more on average for them. This is higher than the global and Asia Pacific averages of 9.7% and 11%, respectively.

In addition, there’s a trend in Thailand to switch from combustion vehicles to electric or hybrid ones. Based on the report, 79% of Thai consumers expressed interest in owning an electric vehicle, a sustainable product, which is twice as high as those in Asia Pacific at 40% and global consumers at 32%. I believe Thai people have a stronger sense of responsibility for the environment, whether through correct energy consumption or sustainable products.

Piyanat
Another popular trend is Generative AI. Has this trend impacted consumers? How can consumer-facing businesses use GenAI to their advantage?

Pisit
AI has been trending since the launch of ChatGPT in November 2022. Businesses considering adopting GenAI must do so responsibly since consumers are concerned with data security. As a result, Thai businesses can consider GenAI for low-risk activities. From the survey findings, consumers are ready to adopt GenAI, but only trust it for low-risk activities such as collating product information and providing product recommendations.

For now, GenAI shouldn’t be used for high-risk activities such as investment, medical and legal advice because consumer trust is low.

Therefore, businesses planning to adopt GenAI should consider building trust and transparency with their consumers. These activities rely on customer data, so data mismanagement can turn the tide against AI. Businesses must strike a balance between AI and customer interaction. For example, chatbots can be convenient, but can’t answer some questions.

Piyanat
From the insights discussed, can you share some key takeaways that retail and consumer-facing businesses must consider to do business today?

Pisit
Based on the survey findings, Thai consumers are most concerned about macroeconomic volatility, so businesses should focus on alleviating these concerns. Their willingness to spend on sustainable products reveals their emphasis on value over price, so businesses should focus on providing value.

Secondly, businesses should use social media when doing business to increase sales, however, they must use it responsibly by safeguarding customers’ personal data.

Thirdly, businesses should embrace sustainability in their products and services because Thai consumers are more interested in this matter.

Fourthly, businesses should use data responsibly to build trust with consumers.

Piyanat
By now, you, our listeners, can understand Thai consumers’ needs and expectations: they’re inclined to spend more on necessities, have an increasingly positive attitude towards consuming sustainable goods and continue to use social media for purchase-related activities, despite increased concerns over data security during online transactions. Businesses can certainly use the voice of the consumer insights from our report to their benefit, whether to plan their marketing or other strategies.

Thank you Pisit for joining us today.

Pisit
You’re welcome and thank you.

Piyanat
For those who’d like more information, the Voice of the Consumer Survey 2024: Asia Pacific – Thailand Snapshot is available on our website www.pwc.com/th or follow PwC Thailand social media channels – LinkedIn, X and Facebook for our latest updates.

Don’t forget to like and follow the PwC Thailand Spotlight podcast series so you don’t miss out on our new episodes.

That’s it for today, thank you and goodbye.