Vision 2025 Update

Asia Pacific

Picking up momentum

Drivers of Global Change: Asia Pacific is a Vision 2025 update that dives into the changing human values in the Asia Pacific region towards 2025 and beyond. This report will provide insights into the future of this region as it develops its global layer and simultaneously keeps local influences. With multiple growing economies, there are moments that highlight the effect on physical products, retail, and business strategy.

Many APAC countries face the reality of the cost-of-living crisis, and citizens have expressed frustration through various streams as a mode of survival. While housing and travelling is expensive or unavailable, new lifestyles are discovered via co-living or recreating foreign cultural experiences. Supplements are on the rise as a response to stressful environments, with younger generations forging diverse self-care methods. Others turn to technology for empowerment. We see a surge in traditional art techniques or cultural monuments infused with digital tools. New rituals and beliefs develop for destressing and entertainment.

Consumers make more conscious choices through various channels, but refuse to trade down. Local brands that strive for quality and innovation are ahead of the game and an option considered alongside luxury products. On a larger scale, companies and country legislations attempt to build sustainability and renewables towards a long-term strategy.

Despite these struggles, APAC citizens are choosing not to soften their quality of life and still seek to make the most out of it, even if they are small moments. We can look towards these unique and innovative moments as a point of reflection on how to continue approaching such a pivotal year as 2025.

Much of Asia-Pacific are still recovering from the after effects of the pandemic. Economic activities are impacted, and consumer confidence has become less stable. People have come to rethink their purchasing behaviour and consumerism as a whole. Our conception of time has changed, routines have shifted. Much of this influences by our emotions, culture, stress, mental health, and social interactions. It can be confusing to switch back to a “normal” lifestyle when the past few years seemed like a blur. Many feel we are returning to where we were in 2019, as it was the only frame of reference for stability.

At OvN, we recognise there are nuanced differences between each APAC country. We looked at a wide range of circumstances and can identify some common themes, which we have chosen to highlight relating to lifestyle experiences, sustainability, culture, and technology. Overall, the most significant impact towards 2025 would be people’s desires to seek an outlet for their mental health and simulatenously elevate their lifestyle experiences. Identity and the ability to express authentic uniqueness through a deeper exploration of themselves are the biggest motivators.

You can download the PDF of the report here

Banner, Photo by Jordy Meow

Right, Biometric Theatre by Rafael Lozano-Hemme

“There is an opportunity for brands to facilitate shared rituals of release to forge a sense of belonging and community, and embrace the spectrum of emotion.”

Huiwen Tow

Head of APAC strategy at Virtue

Content

Local companies are winning

High quality and targeted

APAC consumers are opting for local brands not only for their quality and innovation but also for their close relationship with the local market. Local companies offer competitive products that can be superior to foreign brands. These researchers and brands are highly embedded in the community and culture. It makes them react faster to specific, concentrated, and relatable trends that are suitable for the domestic market.

Local brands are investing more in research and development. Towards 2025 brands are enabling the launch of climate-friendly products in global markets, best seen with the EV market in their capacity for price competition and tech innovation.

The consumer’s choice

Regional loyalty

Aside from innovation and quality, consumers prefer local brands to emphasise national pride, particularly in the Chinese market. A McKinsey report specifies that 49% of Chinese consumers think domestic brands are “better quality,” with most consumers willing to pick Chinese brands to support local companies.

Over the past years, there have been increased local brand purchases. Cultural collectives would like to support one another through difficult times. A product becomes more culturally relevant through regional material sourcing or having the courage to boldly brand itself as “home made”. Here, brands can get respect from the community and generate an authentic, proud national fandom.

Left to right, Zeekr X expands to Europe, Li-Ning x designer Oscar Wang for the Spring 2024 show, Botnal captures India’s mass-based market, Lacàph Space Sài Gòn holds learning sessions and activities for their signature Vietnamese coffee

Beauty duty & self care

The role of women

With the looming global economic recession and other socio-economic influences, wellness as a category will not slow down. People seek at-home care methods which are personal to their lifestyles. Personal care was one of the major categories at Cosme Tokyo 2023, and the role of women’s routine and self-care methods have changed over the past few years.

“Beauty duty” is a term originating from Japan and Korea, and brought attention to younger Chinese netizens. It refers to societal pressure women face to wear makeup or dress up for professional events and social outings. Rather than conforming to these standards, netizens call for women to focus on self-care, their independent wishes, and invest in financial goals and status.

Wellbeing and beauty

Shifting old stigma

The demands of a fast-paced working lifestyle also demand wellness to be optimised. Supplements for quick treatment and consumption have been trending. Even CBD use in supplements and creams has been taking off in Japan. The Japanese CBD industry is expected to reach $456M (JPY 66B) by 2025 (Euromonitor).

Although it is a minor category due to cultural stigmatisation, it is still a significant development showing the shifting needs of a younger, urban generation that rely on CBD products for stress and relaxation. Most domestic Japanese brands import CBD from Europe and the United States. Cultivating and distilling hemp is still heavily restricted but will change in late 2023 as the Ministry of Health reviews legislation for easier importing and manufacturing.

Left to right, Going Grey’s vegan hair care, Pillow’s CBD supplements for sleep and relaxation, NAVER’s Healthy Chart page recommends customised health supplements using big data, FI ME KA’s CBD and plant-based creams and period wear

Longing for more

Resistant and shifting demands

By 2030, the rising ASEAN population will hit 726M. Over 280M new Gen Z consumers will be across SEA and South Asia. By 2025, Gen Z will account for a third of the labour force in Vietnam alone (PwC) and is forecasted as the fastest growth in APAC in 2023. The ASEAN region is looking to foreign trade and investment and is attractive to international brands who plan to relocate and optimise supply chains.

Brands must note, however, that APAC youth are pushing back on the “996” work culture and societal expectations. Youth unemployment has hit 20.8% in China, despite them being the most educated in decades. There is a loss of hope that a degree won’t improve their social position or guarantee benefits, and a lingering feeling of alienation from advertised economic prosperity.

Youth
concerns
and
desires

A desire for more

Nearly half of APAC Gen Z’s feel stressed (48%): 46% from work and study, and 44% from financial concerns (McKinsey). The struggle to establish a long-term plan pushes youth to find routes for self-care and short-term fun or potential side hustles. If they can’t travel to bucket-list dream destinations, they choose to create meaningful scenes on a limited budget.

6 in 10 (57%) of APAC youth describe success as a “healthy work-life balance”. Companies should exert effort to attract and keep teams by finding meaning in work and providing purpose for career advancement. Incentivising learning can help to attract and keep talent, and to quell any social mobility concerns for those who freshly entered the job market.

Left to right, Chinese graduates at a job fair, HRWorld SEA, ‘#Americore’ (#쳄벌크끝루) on Chinese social media, CAKE bank in Vietnam is popular with Gen Z for their rates and savings accounts alongisde product

PUMA

Forever Dance Street Competition, Shanghai

PUMA celebrated their 75th anniversary in Shanghai, emphasising their enthusiasm for local street dance culture and backing its popularity in China.

Empowered & & cautious

Taking advantage

By 2025, the total installed base of IoT units will be 30.9B worldwide. Various APAC and cloud computing businesses are integrating AI and ML for smart-supply chains and solving data platform models between organisations. 85% of IT leaders in India believe their current IT infrastructure is ready for the demands of AI, and 56% across Asia Pacific (Equinix).

Uptake in technology and investments have integrated into lifestyle and administration. Metahumans or artificial figures can practically assist without workers being physically present at the office, as seen with Indonesia’s tvOne anchors. AI translation systems can convert various dialects, languages, and accents to accommodate the country’s diverse ethnicities.

Utilising
Artificial
Intelligence

Double edge technology

On the other hand, there are concerns over creators copyright infringement. Earlier this year Douyin initiated industry regulations for creators to use clear labels on their content that differentiate AI generated content, emphasising that AI generated content that infringes on others copyright is prohibited.

Deepfake scams have also been on the rise. Beijing’s Anti-Fraud Centre claims that WeChat AI scams had a near 100% success rate. Tutorials on voice and face cloning with AI are easily accessible online, especially with music artists and celebrities. A recent livestream phenomenon is on the rise where streamers use AI to adopt the likeness of celebrities to boost sales numbers, sparking debates on false advertisements and the legality of mimicing someone’s likeness.

Left to right, ByteDance and Alibaba placed large orders for NVIDIA’s A100 and H800, Air India launched Gurukul.AI for personalised workforce upskilling paths, Bilibili user cloned singer Stefanie Sun’s voice using AI, Indonesia’s tvOne has a news anchor ‘Nadira’ based on anchor Fahada Indi

Cultural DNA

Celebrating heritage

More APAC citizens are leaning towards emotional connections towards their own culture, celebrating local and regional creatives and shopping for goods that are closely connected with nostalgic aesthetics. Creatives experiment with recontextualised relics, using the power of technology to unlock deeper spiritual connections.

Artists are exploring this new creative renaissance. They proudly express and integrate cultural DNA into their works for the public to experience. Local brands that stay close to this are part of this cultural clique, and buyers can use products to declare their heritage.

Art
and
technology

Digital economy & using arts

In Asia, businesses and technology start-ups use technology as a tool to promote local art and culture overseas. It can also be used to protect intellectual property rights and reinforce the city as an art and culture hub, best seen in Hong Kong. Companies that are connected to arts and technology allocate more resources which fosters a rich art scene and space to develop art.

In Southeast Asia the digital economy is expected to reach $363B by 2025, and online spending could reach up to $1T by 2030. E-commerce is the largest sector currently driving digital growth, alongside travel and media. Out of the 60M new digital consumers, Thailand and the Philippines are leading demographics.

Left to right, Google/Temasek/Bain e-Conomy report 2021, Stephy Fung makes digital NFT fashion based on her Chinese heritage and British upbringing, XIZAOZAO by Dabeiyuzhou (댕굄倒壟), Hong Kong’s SerendiCity media arts festival

Green progression

Powerhouse

Asia is anticipated to use half the world’s electricity by 2025. Using quantifiable metrics, 30% of the successful APAC corporations today report their carbon footprint. By 2024 this number will rise to 50%. Nuclear power and renewables, wind and solar, will account for most electrical supply growth towards 2025. The emissions generated from the power generation sector are expected to plateau by 2025 with the help of these alternative sources.

Partnerships between Africa, China, India, and ASEAN countries are significant to realise opportunities for PV manufacturing and battery material refining. China’s developed private sector during Covid-19 successfully attracted more foreign investment in low-carbon and biomass technologies.

Sustainability
and
energy

Long-term sustainability

ASEAN’s shift towards long-term climate goals is a necessity for survival. Indonesia’s announcement to move the capital is a signal of this, being one of the largest greenhouse gas emitters in Asia, and projections suggest that North Jakarta will be submerged by 2050.

Vietnam and Thailand are raising their ESG standards to cultivate and keep trade relationships. Vietnam is investing in renewables for net zero targets, with Siemens and Vestas already established within the country. On a consumer level, the interest in sustainability is still very early, especially in East Asia, but this is slowly shifting. 29% of those under 34 will prioritise purchasing from brands that emphasise sustainability and corporate responsibility (KPMG).

Left to right, Vietnam’s electric taxi service Green SM, Osaka’s World Expo 2025 ‘Designing Future Society of Our Lives’, Indonesian president Joko Widodo at the G20 Summit, ATRenew’s automated quality inspection of second-hand items

Culturally consistant

Building on familiartity

By 2025 plant-based protein start-ups are expected to grow by 25% in Asia, quoted by BIV founder Andrew D Ive. The first investments have been in larger markets: Thailand, Indonesia, and Japan. APAC citizens are looking into flexitarian diets without sacrificing taste. Leveraging local ingredients (such as soy, wheat, and pea protein) can help to convince consumers to make the shift.

Various plant-based start-ups serve based on customer needs rather than pure product attributes. Singapore and GOOD Meat plan to build Asia’s largest cultivated meat facility, after approval from the Singapore Food agency. The Singaporean government plans to support alternative protein start-ups to make its food indsutry self-sustaining.

Food
and
adjustment

Adapting to a fast-paced lifestyle

Trending on Chinese social media, the phrase “white people food” popped up. It can be categorised as unappealingly assembling raw food and marketed as low-calorie and fat-reducing. The initially humourous trend sparked a large discussion about cooking easy meals and the “996” work culture. Posts from migrant worker accounts also showed that they made these meals to adjust to the cost of living crisis. They can cut costs by avoiding takeaway and making lunch without a gas fire.

Citizens want to ease their busy lifestyles. Retail strategies have also expanded towards this by growing into third-space experiences beyond the physical store. Enhancing retail and digital capabilities can bring a strong connection within the consumer’s daily routines.

Left to right, MUJI Farm concept in Shanghai, #WhitePeopleFood (겜훙레) trending on Chinese social media, Meatless Kingdom uses mushrooms for ‘beef’ rendang, Starbucks partners with Amap for new retail channel Starbucks Curbside

New living

Co-living

Co-living is a modern living concept that gained popularity in Singapore over the last few years. It gives tenants private rooms in a shared living space with common amenities and added conveniences or perks, such as housekeeping, maintenance, W-Fi, community events, and brand memberships. It was initially designed to develop collaboration, relationship-building, and community for those who felt detatched from the rest of the city.

As an alternative to conventional accommodation, most co-living options are offered at regions that are well-connected to transport and workplaces. The top three players in the co-living market make up for ~50% of the total market share in Singapore.

Lifestyle
experiences

Managing for the future

75-85% of these guests are under 40 years old. Single and couples have been the majority, but now smaller families who struggle for homeownership are joining the circle. With high property prices (20% increase in price and 42.5% increase in rent), co-living is an affordable and flexible option. New parents are opting for co-living to save for their children’s future. Travelling digital nomads have also taken up a portion of the rooms, more notably in Thailand.

The rising demand from demographic shifts addresses the lifestyle needs of citizens. In the short term, it addresses the delayed completion of residential projects. In the long-term, it addresses hybrid work styles, focuses on wellness for self and family, independent living, and the demand from new or returning foreigners.

Left to right, Coliwoo’s Hotel Amber, Episode 101 in South Korea, Figment uses Singaporean heritage shophouses and has a Creator Residency programme, Ng Kah Fa and his family staying at a co-living accommodation

Luxury is no longer about status

Co-Quality channels, quality product

Disposable income has slowed down. In the luxury market, APAC consumers spend conservatively but choose to maintain quality of life. Different channels are adopted, online and offline, to seek more detailed information about features and functionalities before purchases.

Modern luxury is no longer about exclusivity but rather inclusivity and giving back to communities. Consumers are especially seeking transparency and integrity when connecting with luxury brands. 74% of Chinese customers switch from their loyal brand if sustainability and corporate responsibility are emphasised (KPMG). In an economic recovery phase, citizens have pivoted their philosophy with brands and become more conscious of credentials.

Modern Luxury

Obtainable

Modern luxury is obtainable, affordable, and collectable. Industry executives feel the push for digital transformation, sustainability, and experiential retail to remain relevant amongst younger consumers. Digitally native buyers now also seek exclusive collectables that can satisfy their need for self-expression or to represent their uniqueness. LVMH, for instance, has been looking at Metaverse and Web3++ for expanding product innovation.

The digital and sustainable transformation has redefined luxury and transcends geographical borders. There is value amongst APAC consumers, especially Chinese consumers, that attributes value to brands that can connect socio-culturally. Understanding local values that transcend language can establish relationships in the long run.

Left to right, Pop IP Marser collaborates with Gucci for collectable figurines, Younger consumers appreciate nuanced details by McKinsey, ICICLE’s Natural Way collection uses food dye, WeChat Mini Programs provides information and ability to chat with a sales associate

Looking Forward

Keeping the roots

It has been challenging over the past few years in terms of APAC recovery and returning to normalcy. Recent economic struggle particularly in East Asia has taken a hit on consumer confidence, leading to apprehensive decision-making on the part of the citizen, employer and employee relationships, and business strategy. Most people of varying class backgrounds were forced to adjust their lifestyle to some degree as a response to this. Consumers seek an outlet to release their burdens, through various personalised outlets whether it be self-care, using digital tools and technology, or going back to traditional cultural practices.

APAC citizens and consumers want to elevate their quality of life, even through micro-moments that are sharable with loved ones and online audiences. While going through difficulties, people wish to bring back purpose and excitement, especially post-pandemic where many underwent a waiting period to return to normal. Seeing other countries back on track has given hope and motivated many.

Brands that stay close to cultural roots can develop deep connections with the APAC region and stay close to the consumer. Localised interactions can help accelerate this process to make a swift change and develop the courage for bolder investments. There is still a resilient attitude amongst citizens towards a better future, which can be supported by brands through platforming the extraordinary, strategising long-term authentic sustainability, and providing new life experiences.

You can download the PDF of the report here

Right, ICICLE’s Hemp Up! collection