Pandemic concerns recede, inflation looming public consumption – Ipsos study

The Ipsos SEA Ahead survey ran across Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam in May and June 2022.

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  • Marcomm Ipsos in Indonesia Marcom Team
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According to the results of Ipsos SEA Ahead 6th wave survey, 71% of Southeast Asians admitted that the Covid-19 situation in their country was under control and believed the pandemic had become endemic. The public's concern about the pandemic situation has subsided. The same report shows that personal finances (22%) and inflation (21%) are the biggest concerns for Southeast Asians today. This is in line with the results of the Ipsos Global Advisor - What Worries The World survey which shows that inflation is a major concern for the world community today (39%), while Covid-19 is in ninth place (16%).

SEA Ahead is a series of Ipsos surveys to understand the development of public opinion and consumption behavior in Southeast Asia during the pandemic. This survey is the sixth wave of online surveys involving a total of 3,000 respondents for Indonesia, Singapore, Malaysia, Thailand, Vietnam and the Philippines, during May and June 2022.
Meanwhile, Ipsos Global Advisor - What Worries The World is a global survey covering 28 countries in the world, including Indonesia, involving a total of 19,508 respondents, during July and August 2022.

 

National Economic Optimism Amid Inflationary Pressure

The national economic recovery due to the pandemic continues to be overshadowed by public concerns about inflation. In the Ipsos Global Advisor – What Worries The World report, 67% of the world's people are pessimistic about their country's economic situation. However, in contrast to the Indonesian people, the majority of which 61% stated that the current national economic situation was good. In terms of ranking, Indonesia is in the third highest rank compared to other countries, after Arabs in first place (97%) and India in second place (78%). Moreover, in the same report, it is known that the level of concern of the Indonesian people towards inflation is the lowest (19%) compared to 27 other countries.

In the 6th wave of Ipsos SEA Ahead report, it is known that on average (54%) Southeast Asians are optimistic that their country's national economy will be stronger in the next 6 months. Indonesia itself, the optimism of the people (77%) is at the highest rank compared to other Southeast Asian countries.

“Despite the uncertain inflation and global economy, the results of the two surveys conducted by Ipsos, both SEA Ahead and Global Advisor, both consistently show positive public sentiment towards the current and future national economic climate. This high level of public optimism will greatly affect the economic recovery and public consumption itself,” said Soeprapto Tan, Managing Director of Ipsos in Indonesia.

 

Public Consumption Affected by Price Increase

In this wave 6 SEA Ahead report, it is seen that the impact of the global inflation wave is inevitable and also has an impact on Southeast Asian countries. A majority (96%) of Southeast Asian consumers say rising prices have had a significant impact on their lives.
In Indonesia, 46% of consumers said they were “very much affected” by price increases. The product categories felt by the majority of Indonesian consumers experienced significant price increases, namely food (87%), gas (68%), and beverages (52%). Nevertheless, they continue to make purchases for basic needs such as; foods, cleaning products, and personal care products. Meanwhile, on secondary/pleasure expenditures, such as domestic and international travel, cultural activities, and others, consumers began to save. In addition, most (40%) consumers are still hesitant to make big ticket purchases, such as houses and cars.

“The increase in the price of household goods, such as food, gas, and beverages, due to inflation has begun to affect the purchasing power of consumers. Although we see the optimism of the Indonesian people towards the positive national economy, they will be more critical and careful in shopping and choosing products," added Soeprapto Tan.

The majority of consumers still prefer to shop online, even though some of them have shopped offline, either in supermarkets, minimarkets, as well as markets and conventional stores once a week or more. Especially Indonesian consumers (59%) who claim to shop online more often now than 6 months ago. E-commerce is the most widely used online shopping channel by consumers, compared to social media, transportation applications, and official websites. The product categories that many Indonesian consumers buy online are fashion and sportswear (75%), top up e-wallet balances and bill payments (70%), and food and beverages (55%). In more detail, gen Z and millennials more often use messaging services and digital payments than gen X.

“With much of Southeast Asia transitioning to the endemic phase of Covid-19 and tackling inflation, it is increasingly important for leaders to exercise resilience and long-term foresight to adapt to rapid and complex change. Inflationary times are challenging—how are we going to innovate? Adjust pricing strategy? Rethink brand differentiation? In the midst of uncertainty, the way forward is to determine what is right for your consumers, balance short-term benefits and long-term risks, and most importantly, build your empathy to create real relationships with consumers and take relevant actions,” said Soeprapto Tan.