Outlook 2022: S.E.A. POV
Four innovation trends shaping the future of media & technology in Southeast Asia
Co-written by:
- Liz Shie (Senior Regional Strategist, UM APAC)
- Jesca Bantayan (Head of Strategy, UM Philippines)
- Aditya Kilpady (Regional Strategy Director, UM APAC)
- Pradon Sirakovit (Regional Strategy Director, UM APAC)
In the beginning of the 21st century, the Philippines was coined as the ‘Text Capital of the World.’ As social media usage rose, it became the ‘Social Media Capital of the World.’ The Philippines, just like other countries in Southeast Asia, has been embracing technological disruptions. Two decades later, the scale of disruption is accelerated by a global health crisis, ushering new behaviors and expectations. For brands in Southeast Asia (SEA) to remain relevant, marketers will need to adapt amidst volatility and understand how Southeast Asians navigate change.
Today, despite the signs of recovery from the pandemic, headwinds coming from global economic factors, new Covid-19 variants, and political unrest continue to challenge stability. Amidst these conditions, Southeast Asians remain resilient. The SEA region has been known to navigate entropy and bounce back amidst natural disasters, revolutions, and economic crises in the past.
Unlike most countries in the Asia-Pacific region where change is propelled by institutional reform, most of the changes in Southeast Asia are catalyzed by the people. The region characterized by a powerful sense of community where it is culturally inherent to help each other overcome problems, even with personal sacrifice. Even before the pandemic, Indonesians have been espousing “gotong royong” whenever they help each other for a common goal, whether that is to assist their fellow countrymen to recover from typhoons or build shared spaces. The same is practiced by “jitarsa’’ for Thais, “tinh thần cộng đồng’’ for the Vietnamese, “bayanihan” for Filipinos, “kampung spirit” for Singaporeans, and “kita jaga kita” for Malaysians. This spirit of community further ignited during the pandemic as whole nations experienced crises. Social media, ecommerce, online delivery, and digital payments became necessary tools for their personal and communal survival.
Now, a new era is in their midst as they forge the post-pandemic world. How will Southeast Asia harness its strength of community through connectivity to face the uncharted? We identify four ways in which entropy will play out globally and unearth windows of opportunities and challenges for marketers in the subregion.
The SEA region has been known to navigate entropy and bounce back amidst natural disasters, revolutions, and economic crises in the past.
Power to the People
This emerging entropy is largely seen to be driven by no less than us, the consumers. Two years into the pandemic, content interactions and preferences have recalibrated around the world, especially here in Southeast Asia. With rising consumer digital adoption, news outfits have pivoted from broadcasting via TV and newspapers, new movies are increasingly consumed at home instead of in cinemas, and A-list celebrities no longer have the monopoly of popularity due to the rise of influencers.
Now, ordinary consumers can become content creators or influencers. Across Southeast Asia, influencers have individually amassed thousands, sometimes millions of followers. Influencers earn from their own day to day content — and brands are the ones who are now aligning their brand objectives to the personality and clout of these influencers. Each market in Southeast Asia has their own set of popular influencers, leading brands to question the well-trodden path of using international celebrities to represent their brands, favoring instead self-made influencers who may have greater authenticity and connection with local audiences.
Each market in Southeast Asia has their own set of popular influencers, leading brands to question the well-trodden path of using international celebrities.
The emergence of influencers in Southeast Asia is not just about hyperlocal popularity, but also the hyper-relevance of each influencer on specific media touchpoints, such as Nianna Guerrero of the Philippines who has more followers on TikTok than she has on YouTube. This means that brands need to balance not only their personalities, influence, and types of content, but also on which platforms they are most effective.
In Southeast Asia, virtual influencers or computer-generated avatars are also gaining ground, ushering a hot new trend in the world of influencer marketing. Take Ailyn, an avatar personifying a 20-something Thai fashion maven, who has been able to wield real world influence of her audience. Surely, this means that anybody with a creative mind can be an influencer, and anybody with a talent for producing could potentially earn from influencer marketing.
Another shift we have observed is that the power to define what is primetime now rests with the consumers, not with the networks or content creators that we grew up with. According to The Trade Desk and Kantar, across Southeast Asia, an estimated 31 million OTT viewers have stopped tuning in to linear TV and are now turning to on-demand content at their fingertips. It has become commonplace for new movies to be seen on SVOD channels, giving consumers the option to choose between movie houses and watching movies in their own home. For example, HBO has screened Wonder Woman 1984, and The Batman far earlier than they would have normally been shown on television, had cinemas been fully operational. As a result, dayparts have blurred, media consumption completely disrupted, and primetime has become anytime. This recalibrated behavior has become the new normal for the Philippines. With OTT acceleration due to Covid and alongside the steady rise of on demand video, one of the country’s biggest free-to-air channels was discontinued in 2020. For brands, it is now imperative to know, and to follow, where good content is — because this is where they will find their consumers.
With the shifting of power to consumers, both on viewership and content creation, one implication is the emergence of fake news. With content now coming from everywhere, the bane of this trend is misinformation. As media and news consumption recalibrated to digital screens, it has inadvertently paved the way for accepting information from sources that may not be credible or true. In response, fact checking organizations are being organized across the region, for example, Anti-Fake News Centre Thailand, Tsek.ph in the Philippines, Fact Check VN in Vietnam. However, the focus against fake news would be more on news about the government, the pandemic, and other more serious matters. Fake news, hate speech, misinformation possibly from influencers or ordinary content creators may still fall through the cracks and vulnerable audiences are sitting ducks to this.
Digital acceleration has placed increasing power at the hands of consumers to create and share content very quickly across various platforms. We as media practitioners should be our own police and advocates to safeguard consumers against false information that spread on the internet. As we embrace the power shift to consumers, we must also take caution against the pitfalls.
For brands, it is now imperative to know, and to follow, where good content is.
Lifecycle Loyalty
Whether it is our favorite football club, our preferred ‘kopitiam’, or the car we love to drive, there are certain brands we experience an unwavering connection with and keep going back to. In marketing, we call it ‘brand loyalty.’ “It costs 5 times more to acquire new customers than to retain current customers” is an adage often heard. Acquiring new customers is vital for future growth, but not at the expense of alienating existing customers.
One of the casualties of the pandemic has been customer loyalty. People are more distracted, and the pandemic has forced customers to shift their attitudes, beliefs, and purchase behaviors. Along with media fragmentation, digital acceleration and a splurge of choices, loyalty has eroded. Consumers in countries like Japan and South Korea are known to have the highest brand loyalty. Southeast Asian customers on the other hand are extremely “brand-promiscuous”, and the pandemic has accelerated their trial of new brands because of stock outs and unavailability, especially in markets like Thailand and the Philippines.
Along with media fragmentation, digital acceleration and a splurge of choices, loyalty has eroded.
A recent shift observed is that the pandemic put a spotlight on creating a better world with environment and sustainability high on people’s agenda. The pandemic has made people more conscious of the products they consume, and they are now influenced by the impact the product has on the environment and society. According to Bain & Company, 80% of Southeast Asian customers are willing to pay a 10% premium for eco-friendly and socially conscious products. It is time to recognize that sustainability is the new normal — not just in perception but in every aspect of marketing, from product design to supply chain and operations. The new lens to lifecycle loyalty will include sourcing of ingredients, packaging, down to how it is disposed of or replaced.
As we know that in Southeast Asia, the collective power of people mobilizes change. Which explains why, as per a recent Kantar study, 63% of customers do not feel that sustainability is their sole responsibility as an individual. In fact, they expect a collective action in their journey to embrace the new environment and sustainability practices. Last year, Coca-Cola Thailand collaborated with Indorama Ventures, the world’s largest recycled P.E.T. producer and an environmental startup, to hand over P.P.E. suits made from collecting and recycling P.E.T. bottles. The “Coke Recycle Me with Trash Lucky” campaign encouraged people to separate their recyclables at home — including P.E.T. bottles. It was a collective effort involving multiple stakeholders with the spotlight on people’s action on recycling.
Another shift observed is that lockdowns limited mobility, and acceleration of online shopping reignited the importance of convenience to drive loyalty. A survey by GlobalData showed that more than 63% of Asian customers sought products that save time and effort, and brands are placing emphasis on delivering convenience as part of their overall experience. When the pandemic wreaked havoc on the airline industry, AirAsia seized an opportunity in the crisis by building a regional super app — a digital ecosystem of services bundled under a single mobile app, which offers a combination of booking flights, hotels, shopping, food delivery, ride hailing or if you are just looking for best deals in town. This helped them jump revenues 39% in 2021 and an opportunity to deepen connection with customers. Similarly, Grab, Gojek and Tokopedia have grown to encompass a wide array of logistics, ecommerce, and payment services.
Decision-making has been especially tough during the pandemic. According to scientists, with the accumulation of choices, people are going through decision-fatigue. The overabundance of brand choices is not empowering — far from it, it is overwhelming. Since Southeast Asia is characterized by a powerful sense of community and connectivity, brands can harness the power of the community to make decision-making easier. Online fashion platform Zalora took this a notch up with their Community Influencer Program using real-life ’everyday’ micro-influencers to endorse products and earn as a result via their social media platforms. This was a unique value exchange for Zalora and their customers. Customers got rewarded for endorsing and the brand got an authentic marketing voice.
History is replete with ‘Black Swan’ events such as the Asian financial crisis, the dot com bubble burst, the SARS outbreaks, and severe weather events. But after each of these crises, a cultural cycle has been accelerated. The Covid-19 pandemic is an opportunity for companies and brands to future-proof their business by reimagining loyalty. Customer loyalty is no different from loyalty in personal relationships. Marketers who realize this will be in a better position to retain customers, leveraging people’s new interest in social and environmental purpose, reigniting convenience through connected ecosystem opportunities and ease decision making through communities.
Since Southeast Asia is characterized by a powerful sense of community and connectivity, brands can harness the power of the community to make decision-making easier.
The Multiplayer Internet
On any Sunday, at public parks in Singapore, one may observe vibrant gatherings of Southeast Asian foreign domestic workers mingling, laughing, and dancing to melodic tunes blasted from their mobile phones. These dance moves come with clear guidelines from an app; a restricted timeframe of 15- to 60-second windows to shoot videos; a slate of songs to which they dance. These choreographed moves are uploaded and shared with families across oceans.
The past two years of the pandemic have highlighted the importance of social media as an emotional connector between foreign workers and their families, with apps like TikTok adding an extra dimension to these virtual interactions. 43 million new internet users in Southeast Asia were added, with growth accelerated at the height of Covid-19 in 2020. The total number of unique users online in the region is projected to reach 400 million by 2026, according to eMarketer.
While TikTok has become the default go-to platform for snackable entertainment, Facebook undoubtedly created the most significant buzz last year by announcing its ongoing metaverse development. The concept is at least 5 to 10 years away from full feasibility, but people are already excited by the prospect of interacting with people in the digital realm through avatars. According to a report by Citi, the metaverse will be worth $US8 to 13 trillion by 2030. Milieu Insights also reported that 72% of Southeast Asians feel positive about it, thanks to its advanced social interaction components. Earlier this year, HSBC became the first financial services provider to enter the Sandbox Metaverse. It announced a partnership to open opportunities for virtual communities to access its financial services and enable creators to monetize assets on the blockchain. This demonstrates brands seeing enormous potential of new experiences being created through emerging platforms for current and future customers in virtual communities.
72% of Southeast Asians feel positive about the metaverse, thanks to its advanced social interaction components.
Excitement in the virtual world has also manifested in the rising popularity of non-fungible tokens or NFTs. Based on a recent poll by Finder across 20 markets globally, 4 out of the top 5 ranked countries come from the region, with as high as 32% of Filipinos already owning NFTs. Sales of Bored Ape, an NFT collection built on the Ethereum blockchain, have already totaled US$1 billion globally. Local Singaporean celebrities such as JJ Lin, Irene Zhao, and Shigga Shay have been very active in this scene, and transactions of their renditions of Bored Ape have made them significantly richer. Twitter recently started accepting NFT avatars as profile pictures for paid users, connecting digital goods to online presence.
On the gaming front, over a hundred million Southeast Asians played online games with their real-life friends in 2020 during the height of the pandemic, representing an increase of 8.4% year on year, according to GWI*. Despite travel restrictions beginning to ease toward the end of last year, the number of people gaming with friends was sustained throughout the transition period. Gamestart, Southeast Asia’s largest gaming convention, also found that 60% of gamers prefer to play games with friends, so this behavior is here to stay. Esports is a significant passion point that cut across a large demographic in this region because it has altered the narrative of what an athlete or a team of athletes should look like. Gaming has built and integrated communities across different cultures and creeds, traditionally underrepresented in the media. Brands have an opportunity to help legitimize these emerging gamers and their success, as their reach is enormous.
Whilst the pandemic has put a grinding halt to live events over the past two years, recovery is seemingly in sight, with 32% of the live music market’s growth in the next four years coming from APAC. Justin Bieber’s World Tour in Asia generated enormous buzz when it was announced, and the concert scheduled for November in Bangkok completely sold out within hours. The match between Liverpool & Manchester United to be held at the Rajamangala Stadium in Bangkok in July 2022 was also sold out in days. People cannot wait to attend in-person events again.
However, while physical gatherings were not possible during the pandemic, some brands chose to remain active with the help of technology. AIS, Thailand’s largest mobile operator, in collaboration with Nadao Bangkok, ran a virtual meet and greet session with fans in 2020. The 5G VR-enabled live stream allowed Nadao’s roster of superstars to mingle with fans online, mimicking a real-life event in the comfort of their rooms. This event occurred right in the middle of the pandemic which had deprived stargazers of physically interacting with their favorite heartthrobs.
Thanks to the collectivist cultures in Southeast Asia, brands have an excellent opportunity to rally behind tribes and reignite a togetherness as lines continue to blur between the physical and digital worlds, and establish an omnipresence, which is already felt at a personal level amongst families, friends, and colleagues.
Thanks to the collectivist cultures in Southeast Asia, brands have an excellent opportunity to rally behind tribes and reignite a togetherness.
The Great Escape
The pandemic has caused significant stress among Southeast Asians. As many as 9.3 million workers in the region were unemployed during the height of the lockdowns in 2020, according to the Asian Development Bank. Meanwhile, employees who were able to transition to a work-from-home set-up felt the strain of the lack of delineation between their personal lives and careers. Regardless of sector, these factors along with the threat of another Covid-19 surge can be said to have contributed to the stress being reported by 81% of Singaporeans, 78% of Filipinos, 61% of Malaysians, 59% of Thai, 51% of Indonesians, and 42% of the Vietnamese, according to a survey by Milieu.
Even Gen Z felt the emotional burden of the pandemic, battling family pressures, grappling with online learning, and facing a volatile job market. As such, 73% of Gen Z in the APAC region are showing elevated levels of stress based on a Sandpiper Communications Study.
To cope with the mounting stress, many have been turning to the digital realm for refuge. The Digital Society Index, an annual global survey on consumer interaction with technology, has shown that consumers are interacting with technology in more positive ways during the pandemic, and key Asian markets are amongst the most optimistic about adopting new technology. In Southeast Asia, 79% are using it for entertainment activities, 69% to stay in touch with family and friends, and 41% to make new friends, according to data from GWI*.
To cope with the mounting stress, many have been turning to the digital realm for refuge.
Watching, listening, and gaming online allowed them to relax and unwind; meanwhile, video conferencing and chatting lessened the isolation. The pandemic has brought about behaviors of doing things together online, where there is a blend of entertainment and interaction. In this way, communities were formed and strengthened through meaningful connections and shared experiences. People saw their communities as a safe retreat where they were able to enjoy activities and support each other.
Perhaps the industry that had to pivot the most and leverage technology to tap communities is travel and tourism. Singapore tourist destination Sentosa tapped the growing gaming community by creating a Sentosa Island in Animal Crossing on Nintendo Switch. The in-game island getaway is a faithful replica of the island, including its beach bars, nature trails, and luge rides, providing a novel escape for gamers. Meanwhile, the wider local communities of Singapore got to escape from everyday worries with a glimpse of cute wildlife from the Singapore Zoo in a series of videos showing how the animals are adapting to the new normal, including coatimundis and African penguins roaming its premises.
Different industries are also coming together in creative ways to offer new experiences and avenues to escape. Centered on the community of aspiring young sports athletes in the Philippines, Milo created a grassroots program called Milo Home Court, which allowed these aspiring athletes to remove themselves from the daily qualms of the pandemic by recreating the sports experience at home. They did this by creating an ecosystem to allow them to thrive by publishing sports training content, hosting online virtual classes, and educating moms on how to keep their kids active at home. This program has led to the brand’s organic growth of 24%, per tracking data from WARC.
Different industries are coming together in creative ways to offer new experiences and avenues to escape.
While going online to escape has its positive effects, it also has its downside. Many have expressed that the internet has become a place of stress, with four out of ten worrying that they are spending too much time on their smartphones and one out of ten saying that social media is causing them anxiety. Brands like OREO have started to tap into some of these growing concerns by championing messages that urge consumers to ‘Disconnect to Connect’ in Indonesia, Vietnam, and the Philippines. In its relationship-themed campaign promoting togetherness with family, the brand communicated a simple message about getting away from technological devices to enjoy quality time.
Moreover, hobby groups have emerged during the lockdowns such as circles for baking, planting, painting, and volunteering, partly out of necessity and partly out of fashion. Gen Z has a mixed response to them. Some were spurred into action trying to better themselves whilst others saw all the activities on their feed as a constant pressure to stay productive. 69% of Gen Zs in APAC feel the pressure to be constantly busy, with Indonesia among the top countries.
As we emerge on the other side of the pandemic and prepare ourselves for a post-Covid future, we need to embrace that the next normal is going to be different. Pre-Covid, communities have been the bedrock of society which has brought about resilience, change, and development in the region. Post-Covid, communities remain relevant, but it is propelled further by connectivity bringing about disruptions and uncertainties on an unprecedented scale.
Brands will need to navigate the contradictions of these four trends. First is Power to the People, wherein people have the power to choose who they listen to, but this exposes them to more disinformation. Second is Lifecycle Loyalty, where consumers gain more choices but are also paralyzed by it. Third is the Multiplayer Internet, wherein people are moving towards the online world, but they are still craving in-person connections. Last is the Great Escape, wherein people are escaping from daily stresses online but also battle with digital fatigue. For brands to navigate the age of entropy, they will not only have to look at transforming business fundamentals but also embrace the contradictions of engaging meaningfully with the opportunities and issues of the post-Covid world.
Post-Covid, communities remain relevant, but it is propelled further by connectivity bringing about disruptions and uncertainties on an unprecedented scale.
Note: * Indicates statistics derived from GWI: 8 Waves from Q12020 to Q42021 across ID, MY, PH, SG, TH, & VN.
