Anticipating Inflation in Asia 2022 and Beyond
The Future of FMCG and Retail
After two years of uncertainty living under the pandemic, we thought we will finally see a new normal in Asia. However, before this happens, we are now hit by another challenge of inflationary pressure that is affecting both consumers and brands.
Looking across the key markets in Asia, we are indeed seeing price increase seen across most markets with volume slowdown. Shoppers in Chinese Mainland, Indonesia and Philippines are potentially switching to cheaper products.
The good news is, we are still expecting FMCG to grow in 2022.
Across South East Asia markets, we are projecting that Q4’22 growth will be around 3% despite price increase as likely due to the opening of local economy.
Understanding how shoppers will react to price and inflationary pressure will help in determining our brand growth strategies and in this paper we will be looking at the different behaviours that shoppers will potentially demonstrate during uncertain times across FMCG categories. Some of the key potential shopper reactions to categories are:
- Increase/reduce in Overall Category Volume
- Increase/reduce in Choice of Segments
- Switch Channels
- Increase/reduce Promotional Reliance
- Switch brands or move to Private Label
- Changes in Product Mix (segment, pack sizes)
- New/Lost Buyers
In addition, we have enlisted key industry views from our key partners who each excel in their sector: Friesland Campina, Coca Cola, Mars Wrigley and Unilever who will also be sharing their insights and views on how brands can cope with inflation and continue to reach consumers during these times.
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