Retail in Asia


Southeast Asia’s biggest consumer trends to know going into 2022

The number of digital consumers increased significantly during the pandemic in Southeast Asia. According to Google’s e-Conomy SEA 2021, 60 million people used a digital service for the first time during the pandemic.

The region’s rising digitalisation wave and evolving consumer preferences are expected to usher in a new age of retail.

Based on the ‘Southeast Asia Trender’ report released by Asia’s fashion & lifestyle e-commerce platform Zalora, Retail in Asia shares five consumer trends in Southeast Asia to know now for 2022.

SEE ALSO: Meet the five consumer personalities redefining Asian retail in 2021

Increased Digitalisation

The pandemic was a catalyst for digital acceleration in Southeast Asia, making the region one of the world’s most connected regions going into 2022.

According to the e-Conomy SEA 2021— an annual publication by Google, investment company Temasek and market researcher Bain and Co. — 40 million new internet users came online in 2021, bringing the internet penetration in Southeast Asia to 75 percent.

Additionally, the number of digital consumers (those who paid for an online service) also increased, with 60 million people using a digital service for the first time during and after the pandemic.

By market, the Philippines recorded the highest proportion of new digital consumers, with 20 percent coming online in 2020 and 2021, topping the Southeast Asian average of 16 percent. Thailand recruited 18 percent of its total digital consumers during the pandemic, while Malaysia sat at 15 percent, followed by Vietnam (14 percent), Indonesia (13 percent) and Singapore at 10 percent.

Special mention was given to Indonesia, whose digital user total is expected to grow to 221 million in 2025, with online retail penetration in Indonesia expected to grow to 77 percent of its total population by 2025, Zalora report said, quoting the Digital Market Outlook.

Malaysia is another market to watch in terms of digitalisation and growth. Malaysia’s rising education levels and a consumption-driven middle-class saw the nation’s digital spend per person increase by 47 percent last year, compared to 2020, while overall e-commerce sales are expected to further increase by 1.3 times by 2026.

Zalora reported a 19 percent increase in new brands to its platform, with companies in the region prioritising their online presence to reflect consumer tastes.

“The pandemic is probably the biggest driver behind all of this,” said Google’s head of industry e-commerce at Google, Jerome Hamlin, when talking about the digital surge.

“I think for businesses, what I am really encouraging you to think about is how to use this acceleration: by building new and lasting customer relationships. If you can invest in the long term and build these relationships, you can really leverage that stickiness and habits that are being formed.”

However, the report called for an omni-channel approach to retail. As restrictions ease, and shoppers return in-store, Southeast Asians still rely on physical and digital channels when purchasing, the latter used to communicate and influence the purchase decision, even when the final purchase is offline.

According to the report, some 90 percent of consumers referred to at least one digital channel during their overall research journey, with 58 percent of consumers in the region selecting a digital channel as the most helpful touchpoint for decision making.

Interestingly, almost all (96 percent) of shoppers used Google Search Trends in their purchase research, skewing higher in Indonesia (99 percent), Malaysia (98 percent), Thailand (98 percent), Philippines (98 percent), and Singapore (95 percent), with Vietnam the lowest at 90 percent.

Buy Now Pay Later

During the pandemic, consumer e-wallets usage surged from 45 percent across Southeast Asia, compared to pre-Covid times.

Buy Now Pay Later (BNPL) e-payments have disrupted the world of retail and finance in Asia, and have risen in popularity during the pandemic, especially for the Southeast Asia region’s 290 million who are financially underserved.

For example, in Indonesia, where credit card ownership is scarce and m-commerce is hugely popular, some 55 percent of new e-commerce users paid using BNPL, according to Kredivo and Katadata Insight Centre. Indonesia also saw a 10x increase in searches for e-wallet services and 15x rise in BNPL services in the last five years, according to Google Search Trends, making it one of the fastest growing markets for the BNPL service.

In addition to mobile and financial convenience, BNPL options allowed consumers to splurge on products they never thought they could afford with one payment. Moreover, appealing payment options—from monthly instalments to 0 percent interest fees—provided consumers with access to quality products and services, further broadening financial inclusion. And that included the luxury industry, according to Zalora data.

BNPL for luxury was used across all countries throughout the region on Zalora, with Malaysians leading the way with 10 percent of luxury purchases made using BNPL instalments in the first half of 2021.

Zalora noted that Malaysians migrated to BNPL for the flexibility and convenience it offers, reflecting the nation’s high brand and value-driven culture. Hong Kong reported the next highest BNPL use in luxury at 6 percent, with Singapore at 5 percent. Indonesia recorded the lowest usage of BNPL with 0.64 percent, a market that prefers sportswear and hobby-related products instead of luxury items, said the report.

“Consumers today value a seamless and personalised service,” said Vangie Hu, Vice President of Marketing at Atome, in an interview with Zalora. “They want to be able to choose where they spend their money (whether offline or online) and their payment terms (immediately or monthly).”

Looking ahead, digital payment transactions are set to almost double to US$1.2 trillion by 2025 in Southeast Asia, according to Google Search Trends. Such predictions mean retailers must provide digital payment solutions, including BNPL options, to shoppers in a post-pandemic climate, both online and in-store, so not to miss out on consumers that rely on the service due to financial convenience and flexibility.


Southeast Asia’s increased appetite for digitalisation has also had an impact on the region in terms of sustainability – from purchasing habits to brand values.

While more are shopping online, 80 percent of Southeast Asians prefer to buy from companies that have invested in lessening their negative social and environmental impacts, according to a report by the Global Survey of Corporate Social Responsibility and Sustainability.

From 2020 to 2021, Zalora said that searches related to sustainability remained stable on its platform, with 15 percent of the retailer’s active customers purchasing items via its ‘Earth Edit’, representing 6 percent of Zalora’s sales share to date.

In looking for sustainable items, Millennials made up 64 percent of the searches followed by Gen X at 18 percent. Gen Z, on the other hand, only contributed to 14 percent of the total, outpacing Boomers which made up just 1 percent.

Contributing to Zalora report, UK eco-beauty brand Lush noted that Southeast Asian consumers are today more informed about the products, preservatives, and options they are presented with, “which means that they are looking for brands that are more sustainable and bring a lot more than just saying what the products are expected to do,” Lush’s Singapore director, Nafees Khundker, explained.

“We see more customers coming into our stores asking about the sustainability of our ingredients used in our products and see more customers coming in with their reusable bags and containers, instead of requesting a paper bag.”

In fashion, Southeast Asian consumers have also reduced their consumption of nonessential items and are buying more quality garments over cheap clothing. Driven by affordability, especially after Covid-19, resale or the second-hand has become trendy, even in luxury, where consumers can find fashionable, quality and sustainable clothing, that matches their values and is at the right price-point.

Modest wear

Islam is the most widely practiced religion in Southeast Asia, with approximately 275 million followers across Indonesia, Malaysia, Brunei, Singapore, Southern Thailand and parts of Mindanao in the Philippines.

Being a region steeped in cultural reverence, Islamic traditions are being outworked in Southeast Asian consumer preferences too, with a rise in searches for halal and modest wear as a result of more businesses pivoting digitally, according to Google Search Trends.

Malaysia witnessed a 15 percent uptick in searches for halal goods from 2019 to 2020, while Singapore and the Philippines recorded increases of 35 percent and 38 percent, respectively.

Modest wear categories have also changed in terms of preference and popularity, as more shoppers work from home. Zalora has seen an increase in demand for traditional tops since early 2021, replacing traditional dresses as a top category performer.

“As casualwear becomes de rigueur at home, Muslim consumers find new ways to practise modesty indoors—especially during Zoom calls,” said the Zalora report. “Think denim jeans paired with crisp shirts and a hijab in this regard, where everyday comfort meets business chic.”

Tops made up 35 percent of modest wear purchases on Zalora this past year, followed by traditional dresses at 28 percent, tudung and head scarves (19 percent), batik (9 percent) and prayer headgear (6 percent).

Demographically, Millennials and Gen Zs were more likely to purchase modest modern pieces during the pandemic, while Baby Boomers looked to traditional wear as their primary choice of apparel.

Meanwhile, 45 percent of total shoppers on Zalora purchased formal wear from central locations (think cosmopolitan cities like Kuala Lumpur and Jakarta), while 51 percent hail from the outskirts (like Sarawak and Jawa Barat).


Southeast Asian shoppers spent an average of US$127.50 per person on luxury items across e-commerce platforms, from February to July in 2021, according to iPrice.

An appetite for luxury that was attested to by Google, with search trends for top designer brands in some markets exceeding pre-Covid levels in the first half of 2021.

This uptick was especially pronounced in Singapore, where the search interest was as high as 1.5x compared to pre-Covid level for top brands such as Louis Vuitton, Chanel and Dior.

The motive? Finding respite in online luxury shopping by purchasing “feel-good” nonessential items during the pandemic.

“These findings are consistent with an APAC research we have done commissioned with Kantar, where we found out that consumers are buying these feel-good indulgence items to make themselves happier during this time of uncertainty,” said Stephan Wu, Strategy and Insights Manager at Google.

By category, Zalora said luxury shoppers spent the most on wallets and purses at 8.79 percent via its platform.

SEE ALSO: EXCLUSIVE INTERVIEW with ZALORA on e-commerce growth in Southeast Asia

Meanwhile, fragrances came in a close second at 8.03 percent and t-shirts at 7.45 percent. At the same time, Zalora’s unique luxury buyers were mostly aged 36 and up, despite the platform’s main customer belonging to the 25-to-35 age group, with a 42 percent market share.

Baby Boomers were the second largest age category, with those over 40 amounting to 26 percent of the luxury market’s share for Zalora.