At first glance, Southeast Asia’s growth story continues. But macroeconomic strengths have not secured shopping baskets domestically.

GDP is projected to grow nearly 5% annually by 2035, led by Vietnam and the Philippines. However, aggregate projections are buoyed by pockets of growth rather than a region-wide sales boom, and structural gaps limit the region’s longer-term outlook. Fast-moving consumer goods (FMCG) growth has been either flat or declining since 2023 across the SEA-6 (Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam).

Population growth experiences a similar counterweight: The SEA-6 are projected to add 50–60 million consumers by 2030, making Southeast Asia second only to India and China in terms of population growth. However, those consumers may be a difficult combination of thrifty and fickle. One-third of consumers report being worse off financially compared to the prior year, and roughly 8 in 10 indicate they are buying less to help manage their spending. Nearly half of consumers indicate they would change brands on the spot if their go-to product wasn’t available.  

Meanwhile, AI is rewriting sales journeys, forcing consumer products (CP) companies to find entirely new ways to win consumer love and add value.

New research by Bain & Company and Nielsen NIQ offers deeper insight into Southeast Asia’s growth story, including trends, strategies, and imperatives to produce a happier ending.

Key highlights

• The macro-basket mismatch: Exports and investments have powered much of the region’s GDP growth, while declining wage growth and rising household debt have capped domestic consumer spending.
  
  
• Population growth: A surge in consumers doesn’t guarantee a surge in sales. As Southeast Asia's consuming class expands, brands will need to identify category- and country-specific growth opportunities, whether through increased penetration or premiumization.
  
  
• Accelerated churn: Insurgent disruptors are accelerating share churn across categories, with local and regional players often gaining ground over multinational corporations.
  
  
• Selective premiumization: Despite cutting back on spending overall, Southeast Asia consumers are willing to splurge on products for the right reasons, including products that are “good for me/my family.”
  
  
• Channel competition: Traditional trade remains the leading sales channel for FMCG but is losing share to minimarkets and online channels. Meanwhile, B2B wholesale and hard-discount formats are squeezing margins and creating potential channel conflicts.
  
  
• AI discovery: Roughly 80% of consumers report using AI in their shopping journey, and AI is now the leading source for brand discovery. However, AI is also the least-trusted source for product recommendations.

Strategic priorities

In our research, FMCG executives agreed on five strategic priorities for the next twelve months:

1. Product and portfolio innovation
2. Cost reduction and productivity
3. Pricing and pack architecture
4. E-commerce and social commerce capabilities
5. Supply chain and operational resilience

Imperatives for leadership

Our research identified five imperatives for FMCG leaders, all of which are underscored by adaptability and resilience.

1. Reclaim pride and reignite love for your brand: To win back lapsed buyers, CPs must deliver better products and better value and back them up with social proof, such as reviews, ratings, or social buzz.
   
   
2. Turn strengths into superpowers: Lean into strengths across the consumer journey, supply chain, and execution—turning them into unbeatable competitive advantages.
   
   
3. Recapture control over the consumer journey. Winning CPs will own new control points in the consumer journey, such as AI prompt search, to reinforce brand equity and create value that can’t be commoditized.
   
   
4. Tap into tailwinds with bold M&A moves. CPs will need to pursue bold M&A or deliberate exits to establish the next $1 billion brand.
   
   
5. Supercharge decisions. With digital and AI capabilities, CPs no longer have to choose between speed and scale. They can make millions of continuous decisions annually, creating value at every stage of the FMCG value chain.

Ultimately, the right strategy requires aligning investments and resources around the right big bets. Decide which predictions affect your future the most and act now to preserve your growth story.

About NielsenIQ

NielsenIQ (NIQ) is a leading consumer intelligence company, delivering the most complete understanding of consumer buying behavior and revealing new pathways to growth. NIQ’s global reach spans more than 90 countries, covering approximately 85% of the world's population and more than $7.2 trillion in global consumer spending. With a holistic retail read and the most comprehensive consumer insights—delivered with advanced analytics through state-of-the-art platforms—NIQ delivers the Full View. For more information, please visit www.niq.com.