UOB's ASEAN Consumer Sentiment Study 2024 highlights a shift in Thai consumer spending: Focus on experiences and investments

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.

Mr Yuttachai Teyarachakul, Head of Personal Financial Services, UOB Thailand said "This year study's 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 per cent of respondents citing it as a key worry. Additionally, 60 per cent of respondents identified increased household expense, and 58 per cent noted a decline in savings as contributing factors. In response, approximately half of the respondents reported reducing their expenditure on non-essential items, while 45 per cent have sought secondary sources of income, and 44 per cent have begun actively searching for offers and discounts while shopping.

Growing trend in experiential spending

However, despite the uncertain economic climate, Thai consumers are prioriting experiences over luxury goods. More than 40 per cent 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 per cent) and Gen Y (45 per cent) respondents. Data from Visa Thailand supports this trend, showing a nine per cent decline in luxury spending but nearly three per cent rise in experiential spendings 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 in entertainment also exhibits the most significant growth at 57 per cent.

International travel demand stays robust

International travel remained a significant part of experiential spending, with more than half of Thai consumers (58 per cent) having taken an overseas trip within ASEAN in the past year, ACSS 2024 findings showed. Respondents also favored 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 1 July 2023 to 30 June 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 per cent of Thai consumers reported holding emergency funds covering at least three months worth of expenses, above the regional average of 54 per cent. Notably, the younger generations were placing greater priority on wealth preservation through savings and investments 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 the number of deposit accounts held by Gen Y grew by 27 per cent during the same period. In terms of investing, the number of Gen Z investors more than doubled, jumping 129 per cent, while Gen Y investors increased by 23 per cent. Direct offshore investments by Gen Z and Gen Y UOB Thailand investors collectively grew 10 per cent, with foreign investments through Thai-registered funds rising by 14 per cent too.

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 UOB ASEAN Consumer Sentiment Study 2024, please visit go.uob.com/acss2024-th