In recent years, economies around the world have faced varying levels of growth and recession, resulting in consumers experiencing fluctuating perceptions about their financial well being. Amid these unpredictable conditions, many experts expected an uptick in consumers’ financial situations, while others questioned whether economic progression is proportionate, pointing to the growing wealth gaps in many markets. These sentiments are captured in Nielsen’s 2018 Changing Consumer Prosperity report, which reveals consumers’ sentiment toward their financial situations and their spending behaviours, and how this has changed over time.
In Singapore, a positive monetary outlook is displayed. Close to half of Singaporeans (49%) believe they are better off than five years ago. 67% also indicated they live comfortably and are able to buy some things just because they want them, which is supported by a 23% increase in average personal disposable income growth from 2014. And how is APAC faring in comparison? Clearly, Singapore’s financial confidence converges well with APAC’s economic scene. With 70% in APAC reporting that they are in a better position today compared to five years ago, APAC scores as the most financially optimistic region of the world. Indeed, APAC’s economic boom has enabled Asian markets to become more globalised and innovative, and at the forefront of cutting-edge technological advance.
As wealthier APAC consumers are increasing looking to brand identity to boost their social status, premium products have gained popularity in the APAC region. A premium product comes with a range of desired features: quality, value, and a good feeling about yourself. These traits are inbuilt, pre-implemented and ready-to-go. The symbolic advantages of such? It is a ready-made script about your elevated personal image and backstory. And where these benefits are increasingly attractive, it is useful to examine the sources in which people get their premium products from. In Singapore, most (72%) buy premium products from in-store local retailers. A main affordance exclusive to physical stores is the ability for consumers to touch, feel and hold a product to develop an enhanced sense of connection to it.
At the same time, online premium product purchasing is also substantial, as 32% and 28% of Singaporeans purchase from online local and overseas retailers respectively. As this online trend is likely to grow in our digital age, it is crucial for brands to make use of online sales opportunities. This online opportunity is accentuated with personal electronics being the top category of goods that the highest number of Singaporean consumers (36%) are willing to pay for. This trend is reflected on a worldwide scale, where 42% of global consumers are willing to buy premium for personal electronics, making it the global top category of premium consumer spending. When more consumers are digitally hooked, e-commerce is increasingly the go-to mode of purchase, and the future of shopping is in a world that is always connected.
Other top categories that Singaporeans are willing to pay premium prices for are clothing/shoes (35%), home entertainment (26%), meat & seafood, cosmetics, jewellery (all 23%), dairy products, hair care and vitamins (all 22%). The premium buying of these fast-moving consumer goods (FMCGs) that are frequently replaced reflects Singaporeans’ high disposable income and purchasing power. What constitutes as ‘premium’ is not necessarily only high-end luxury goods like avant-garde bags or shoes, but also daily products essential for the layman. Every consumer has the opportunity to brand himself with a superior identity, and every brand an exclusive positioning.
In this case, what are the attributes that Singaporeans are willing to pay a premium for? With 92% of Singaporeans indicating their willingness to spend more on products that “provides superior function or performance”, this is the top premium attribute in Singapore. “High quality or safety standards” is a close second (91%). To gain competitive advantage, brands should create products that are seamless, sophisticated and digitally advanced. Task efficiency can be improved to facilitate our mega-fast lifestyles. Double advantages are achieved where function converges with aesthetics: A sense of social status is also conveyed to suggest that the consumer is on-trend and at the top of his industry.
Organic and eco-friendly trends also see a significant group of followers. 81% and 80% of Singaporeans are willing to pay premium prices for products that contain “organic/all natural ingredients” and “environmentally friendly/sustainable materials” respectively. There is thus a marketing opportunity for brands to ride on the green trend, especially when exercising corporate social responsibility creates a sincere and personable brand image. And on the customers’ side, they can be empowered to claim ownership over both their personal health and carbon footprint, taking care of both themselves and the earth at the same time.
To establish touch points, it becomes crucial to ask, where do Singaporeans get their information of premium products from? With 46% indicating they do so through recommendations by friends or family, word-of-mouth is the top information source. WOM is often perceived as neutral and unbiased, and also overcomes the insincerity and distance of third-party advertising. Research comes in second, with 43% stating it as a source of insights. To cash on this knowledge-driven opportunity, it is important for companies to boost online visibility through search engine optimization strategies. Website keywords and titles should be catchy and succinct, and statistics or experts can also be employed to improve the rationality or logic of brand claims.
Ultimately, brand equity – or the symbolic value of a brand, should be cultivated for companies to stand out in a crowded marketplace. These intangible traits have highly visible impacts in creating unique selling points for brands, driving effective premiumization that steers companies towards profitable end goals.