Outlook 2024: Southeast Asia POV
How businesses and brands can reshape life, culture and behavior in Southeast Asia
As we settle into the mid-2020’s, Southeast Asia is taking on a new character, in a post-Covid environment, with the downstream effects of geopolitics, local economies, and elections coming to the foreground.
Southeast Asia has long relied on foreign inflows. The US-China tensions and supply chain reconfigurations brought by the pandemic benefited the region by absorbing the displaced production capacity from China. Singapore was the key beneficiary in the quantum of flows, followed by Vietnam and Indonesia.
Looking ahead, the Southeast Asia economy will grow faster in 2024, with an annual real GDP growth projected to recover to 4.7% this year, up from 2023’s deceleration to 4.2%. Trade-oriented economies will drive growth, with continued support from travel and tourism. A return to robust growth indicates that the region is poised to shake off the last, lingering effects of the Covid downturn.
Elections have been heating up across Southeast Asia. In more than one country, elections are entangled with strong nationalism. The Philippines and Malaysia elected new leaders. Vietnam underwent a leadership change. Thailand and Cambodia headed to the ballot box to elect their representatives. Singapore and Indonesia also voted for respective new Presidents.
In his recent book, Living with Civilizations, eminent historian Wang Gungwu explains how Southeast Asia has been shaped by external influences from Indic, Sinic, Islamic and European-Christian civilizations. Countries in Southeast Asia selected elements from various civilizations and integrated them into their own national cultures. The peaceful coexistence of diverse ethnic, religious, and linguistic groups has been a reason why the region is a “salad bowl” of culture and cooperation: a hodgepodge of diverse people, beliefs, behaviors, and partnerships.
The open and inclusive trait that runs through Southeast Asia explains the region’s resilience to adapt and adjust to the downstream effects. History is replete with events such as the Asian financial crisis, the dot com bubble burst, SARS, tsunami, and even the Covid pandemic. After each of these crises, the openness and inclusiveness of Southeast Asia enabled the nations to navigate, each in its own way, the tensions, and tides of a changing world.
The human and inclusive landscape of Southeast Asia is witnessing an increasing demand for generative AI. By 2030, AI is predicted to add US$1 trillion to Southeast Asia’s overall GDP. There is no denying that the power and potential of AI have grown considerably, forcing humans to adapt their behavior. At the intersection of digital adoption and economic growth, Southeast Asia is uniquely positioned to leverage the generational shift in the Human-AI relationship.
With these shifts in mind, let us consider the downstream effects in life, culture, media and experiences — looking at how consumer behavior is headed in the next few years.
In life, the struggles of balancing work and life, coupled with the high cost of living, are affecting family structures and personal milestones. Zooming out, there is an increasing degree of cooperation and cultural partnership between Southeast Asian nations that is influencing consumer behaviors in the region. In media, platforms are collapsing and unifying in ways never seen before; In the experience economy, the era of immersive and interactive encounters is taking shape.
How can businesses and brands navigate the downstream effects? We unlock four trends playing out in the region, highlighting the opportunities and the watchouts.
Life’s New Beat
One of the most profound shifts because of the downturn effects is in the rhythms and cycles of our lives. The shifts are disrupting habits and patterns related to the 40-hour work week, nuclear families, and consumer milestones like purchasing homes.
Covid put the region’s highly rigid work environment back in the spotlight. Employees who had a taste of working from home in 2020 dreamt of a future where they had more control over work-life balance. Four years on, the reality is that hybrid work has become the norm. Southeast Asia is home to countries with famously long working hours, as “hard work is associated with success”. The World Health Organization estimated that 260 million people in Southeast Asia (or, about one in seven) live with a mental health condition, and many of them are not receiving timely treatment.
The pandemic pushed health and wellbeing into the forefront of younger generations’ consciousness. With rising costs of living, more employees are shifting their views on mental health, equality, diversity and inclusion.
A new wave of mental health platforms began rolling out across the region providing employers (and employees) with localized offers that address the unique challenges of mental health, such as Intellect, CoacHub and ThoughtFull. #PlantHappinessPH, the mental health initiative of Globe, The Philippines’ digital solutions company, brought focus to dancing and planting as hobbies that relieve stress and anxiety.
In response, companies are dishing out perks like 6-month WFH for new parents. In Singapore, under Prudential Singapore’s Flexi-Time arrangement, employees can work in 150 alternative working spaces across the city state.
Companies and governments across Southeast Asia are cautiously testing four-day work weeks as notoriously long working hours have taken a toll on workers, with little to show in terms of productivity. Employees in Singapore, Vietnam, Thailand, the Philippines, and Indonesia are keen on adopting a four-day work week, according to a Milieu survey. More than three in four Singaporeans expressed greater interest in jobs that provided three-day weekends.
Separating work and personal life is already challenging as it is. What happens when a high-familial-duty culture and virtual job setup threaten to blur the boundaries even more?
As in many developed countries, falling fertility rates reflect a generational change in priorities, and young people do not consider marriage or parenthood as important life goals. The resident total fertility rate (TFR) in Singapore recently dropped below 1 for the first time in the nation’s history. Singapore Prime Minister Lee Hsien Loong during the annual Lunar New Year message encouraged young couples to add “little dragons” to the family to counter the country’s falling birth rate.
Southeast Asian countries are known for strong filial ties and intergenerational support. Rising costs, exacerbated by the pandemic, are stymieing the home-buying ambitions around Southeast Asia.
Tight-knit family cultures, combined with a lower rate of marriages and birth-rate, mean that Southeast Asia’s millennial population have not felt pressure to move away from their families. Southeast Asia traditionally never had a strong “rental culture,” and most households preferred to own their dwellings as opposed to renting. 30% of millennials are still living with their parents in Singapore and Indonesia, and as much as 49% of millennials from Thailand are not moving out.
The story of first-time homeownership is one of affordability. Although hyped as a fast-growing economic bloc, Southeast Asia suffers from some of the highest home-price-to-income ratios of any region due to stagnating wage levels and unsustainable capital value growth.
With the pressures on work, families, and spending behaviors, can Artificial Intelligence (AI) can lighten the load? AI-driven technologies such as automated chatbots have spared workers from repetitive tasks and processes. The Philippines has been integrating AI into sectors like government, healthcare, agriculture, transport and finance. The ubiquity of AI will allow people to enhance their practice, optimize their skills, and make AI their assistant co-pilot.
One immediate application for AI will be to personalize and contextualize human emotions through content. The “Smile Generator” AI tool introduced on Colgate’s website, encouraged users to create personalized Colgate smiles on their social media and champion the cause of celebrating diverse smiles.
AI-driven addressable strategies will challenge traditional media and marketing approaches. ‘Prompting Feelings’ — the world’s first generative AI exhibition in collaboration with Singapore Association for Mental Health (SAMH), showcased powerful art pieces generated using prompted truths about what it’s truly like living with mental health disorders.
Cross-Border Collaborations
As personal rhythms change, it is also reshaping the wider world around us. Southeast Asia is a cocktail of nations with a unique national identity yet belonging within a regional ecosystem. At a time when the world is witnessing political divides and conflicts between neighboring countries, Southeast Asia stands out as a shining example of collaboration and cooperation that goes beyond borders.
Take clean energy for example. The ASEAN Power Grid (APG) constructs a regional power interconnection to improve the region’s access to secure and affordable energy. There is a lesson in how a flexible and pragmatic cross-border power grid can decarbonize the region and meet the rising electricity demand. Singapore has also been working on the Laos PDR-Thailand-Malaysia-Singapore Power Integration Project, another cross-border interconnector that supports regional economic growth and leverages renewable energy across countries.
As another example of regional cooperation in Southeast Asia, the ASEAN interoperable QR code payment ecosystem (a first of its kind in the world) is that facilitates financial connectivity between countries. When TikTok Shop launched in Southeast Asia, it was meant to be a cross-border selling platform for small online stores in Thailand, Malaysia, Vietnam, and the Philippines. Today, cross-border QR payment mechanism benefits more than 1.77 million users of Singapore, Malaysia and Indonesia by 2025, without having to worry about currency conversion or exchange rate fluctuations. Users of Singapore’s PayNow and Malaysia’s DuitNow can easily make person-to-person funds transfers.
Gaming in Southeast Asia is shaping how people interact, build communities, and engage across countries. Online multiplayer games like “Mobile Legends: Bang Bang” and “PUBG Mobile” fostered an environment of cross-border friendships (and rivalries!). With the growing popularity of esports, the opportunity to use influencer marketing and celebrity endorsements is catching fire. Mandopop superstar JJ Lin is an avid gamer and a far-reaching ambassador for esports across Southeast Asia. He owns esports teams in Singapore and Malaysia that dominate at the BRSG Valorant Community Series and the Stay Home Challenge Breaker tournaments.
While Korean dramas have always been popular in the region, lately Chinese TV series are making a big splash in the region. Chinese drama’s growing fame comes amid strengthened bilateral cultural exchanges between China and Southeast Asia under the Belt and Road Initiative (BRI). Chinese fantasy costume drama, Till the End of the Moon, was broadcast on Thai online video platform True ID last year. Last year, a video of Thai taxi drivers watching Chinese TV series ‘The Knockout’ went viral on social media. Images of the leading character were pasted across the three-wheeler — a vivid display of the rising popularity of Chinese TV series in the Southeast Asia market.
In Southeast Asia, besides K-Pop and Chinese dramas, Japanese anime also has a big fan base. Based on Google Trends, three out of the top five countries ranked by anime popularity globally are in Southeast Asia — the Philippines, Vietnam and Malaysia. In Indonesia, “Attack on Titan” raked in a spectacular 830 million minutes, higher than the FIFA World Cup 2022. UniPin, an Indonesia-based in-game payment company, joined forces with Domino’s in Malaysia, Singapore, and Thailand, along with Genshin Impact (a Chinese MMO game that heavily borrows from anime aesthetics), to launch exclusive collectibles and branded merchandise for the gaming and anime community.
Contradictory to the global narrative of increasing polarization and division Southeast Asia shows significant overlap between different cultures and industry sectors. Whether it’s clean energy, QR payments, esports, entertainment or pop culture, Southeast Asia demonstrates interoperability of cooperation and partnership between nations that greatly influences behavior.
Southeast Asia is rapidly advancing efforts to build inclusive cross-border collaborations. There is an easy osmosis of business, finance, and culture through borders. Much like the popular Southeast Asian cuisine, Nasi Lemak that represents ingredients mirroring influences of Chinese, Malay, Indian and Indonesian cultural tapestry.
Revenge of the Monoculture
There was a time with clearly defined verticals in entertainment. Put simply, film, TV, music, and video games belonged to their own silos. In 2024, this concept diminished to the point where the verticals are barely distinguishable.
GWI data indicates that daily time spent on social media in Southeast Asia is high but declining. To better understand this shift, we need to understand the unification of the media ecosystem.
As social media platforms reset in the TikTok-ification of Instagram and YouTube-ification of TikTok, social media is becoming less about “social” and more about the “media”.
Digital platforms are on a collision course. Spotify is launching music videos in Indonesia, and TikTok launched a music-streaming service in Singapore. While video probably won’t kill the audio star, it may not be great for YouTube’s music video traffic. Across the region, telecom operators, including Telkomsel in Indonesia, Astro in Malaysia, Globe Telecom in the Philippines, StarHub in Singapore, and Advanced Info Service in Thailand, are becoming OTT aggregators. This shift has made it convenient for customers to access a wide range of streaming platforms to access a wide range of streaming platforms.
With improved smartphone cameras and editing tools, user-generated content, the darling of digital marketing in Southeast Asia, is serving a similar function as entertainment content. The Philippines Department of Tourism invited social media users to create advertisements using online tools on their tourism website. The timeless #ItsMoreFuninthePhilippines user-generated ads, solidified the Philippines’s position as a desirable travel destination with a 16% increase in tourists.
Social content is getting supercharged by generative AI. The ubiquity of AI is ushering in an era of zero marginal creation, where the resources to produce content will trend toward zero. This is transforming content creation, leading to an infinite media inventory and tailored UGC experiences. As the pipeline from ideation to execution gets shortened, marketers in Southeast Asia are harnessing AI platforms to create personalized content. The recent Pizza Hut’s “Takeaway Pocket Pleasers” campaign used Midjourney to create a campaign featuring AI-generated visuals.
TikTok, synonymous with short-form videos, has a growing influence with TikTok Malls taking off among younger demographics. In Indonesia, TikTok Mall grew so fast that it spooked regulators, leading to a ban. Now, it looks to be making a return with ByteDance’s purchase of Tokopedia.
Lazada, a leading e-commerce platform in Southeast Asia, introduced ChatGPT-powered LazzieChat, an intelligent chatbot in English, Bahasa Indonesia, and Tagalog. The technology recommends products based on skin diagnosis test results.
There is an increasing need for content moderation on social media, which puts pressure on regional governments and technology companies to mediate online content. The Indonesian government requires companies to remove ‘illegal content and services’ within 24 hours to protect the public from unlawful “prohibited content”.
The near future will see a healthy supply of media inventory, and the best way to break through and capture attention is with events. The key strategy that elevates media into an event is by creating a sense of FOMO (the Fear of Missing Out). Blending of media and entertainment builds “social proof”, elevating a sense of event-ized media and shared experiences that infuses urgency.
Philippines is known for the “budol culture.” (Budol is a Filipino slang for the act of persuading someone into doing or buying something unnecessary.) Hashtags such as #TikTokMadeMeBuyIt and #BudolOfTheDay remind us of how we are looking to peers to show us trusted results, recommend what works and what doesn’t, and help discover new products.
The healthy supply of media inventory re-emphasizes the need for shared cultural experiences. The revenge of monoculture is manifesting in attending live concerts as travel resumes to pre-Covid days. The heightened feeling of FOMO and desire to be part of that in-crowd got over 300,000 “Swifties” from Singapore and neighboring countries to attend six sold-out Eras Tour shows. “Swiftonomics” bumped up Singapore’s GDP for Q1 by 0.2%, adding over SG$ 400 million!
Nostalgia is new again as people are rediscovering the joys of monoculture as a means of salvation from AI. Everything from retro toys, 1970s furniture designs, nostalgic nibbles and Air Jordan 1s are making a comeback. Sneaker Con SEA held every year in Singapore is a chance for sneakerheads and streetwear mavens to get their hands on exclusive kicks. Similarly, the “kidults” are buying into nostalgia at Lego Minifigure Factory — the region’s largest Lego store in Jakarta.
So how can Southeast Asian marketers lean into a monoculture? There is an opportunity to localize by partnering with creators to add authenticity and enhance cultural relevance. Tourism Malaysia and AXN Asia partnered for Unfading Memoirs, an original mini-series that follows travel enthusiasts as they explore the country’s rich culture and heritage.
With the Taylor Swift phenomenon, we saw a number of partnerships materialize, such as Grab’s free shuttle for Swifties, Haidilao’s (a popular hotpot restaurant) bracelet making stations.
In the future, with AI-generated content filling our feeds, the value of participating in culture moments will only grow. The best way to capture attention is by turning “media inventory into cultural events”. The success of media hinges on creating events into cultural phenomenon that generate a sense of FOMO. This shift may counterbalance the flurry of AI-personalized content, re-emphasizing shared cultural experiences.
The Expanding Experience Economy
The continuing development of the digital environment is matched by a resurgence in offline entertainment and leisure experiences, which include music concerts, live sporting events, and theme parks. The experience economy crowned itself as one of the most important themes in the region with people’s unrelenting quest for bucket-list experiences such as seemingly death-defying swings over Balinese forests.
Southeast Asia has an expanding experience economy. United Overseas Bank, a Singapore-based regional bank, is making a big push to provide people with greater access to concerts, travel, fine-dining, and meet-and-greet experiences. Singapore is quickly becoming a flagship destination for concert tourism in the region, given its recent string of blockbuster concerts featuring global superstars such as Ed Sheeran, Taylor Swift, and Coldplay. Coldplay brought in over 200,000 fans to Singapore in January, while Swift drew more than 300,000 fans during her six shows in March. It is a trend that will likely continue, with American singer Olivia Rodrigo set to perform in Singapore in October.
With all the fans in the Southeast Asia region coming to Singapore for the concerts and boosting the local economy, the Lion City provided additional experiences that enhanced their trips. For example, to mark Taylor Swift’s The Eras Tour, the event exhibitor set up a walkthrough experience with pop-up stores and light and water shows that gave the fans an incredible experience. Fan-led activities at the venue with booths for friendship bracelets elevated the overall experience for the community.
A few days after Taylor Swift lit up Singapore, Sentosa Island unveiled a new immersive “multi-sensory” landmark. The Sentosa Sensoryscape is the latest attraction melding nature-inspired architecture with technology to offer an immersive phygital experiential public park.
Beyond concerts, sporting events is also a big draw for the Southeast Asian audiences. Although the pandemic kept sports fans out of the stadium, avid fans are returning with vengeance to experience the same thrill they used to in the pre-pandemic days. Singapore’s F1 Grand Prix event, for example, left everyone giddy with excitement.
Last year, Indonesia hosted the FIFA Under-17 World Cup. This was the first time a FIFA event was hosted in Indonesia, a country with a fanatic football culture. The Government took great steps to renovate stadiums to FIFA standards. A thrilling final was played in front of 13,037 spectators and the FIFA President praised Indonesia for the great attendance of nearly half a million people.
The experience economy aids sensory elements that can create powerful connections to create a holistic impression. Bangkok has its own Louis Vuitton x Yayoi Kusama iconic dotted pumpkins. Since the launch of the collaboration, Louis Vuitton has unveiled a series of awe-inspiring installations to activate the campaign across the world. South-East Asia now has its own showcase.
Singapore’s Changi Airport is one of the few airports in the world where locals visit for leisure. This is a wonderful experience for travelers and locals wanting an enjoyable experience. Whether it’s sliding down long slides, admiring the Jewel Vortex or immersing at the Changi Experience Studio to learn about the workings of an airport, there is something for everyone.
Brands are leaning into the experience economy to excite the middle class. LEGOLAND Malaysia upgraded with new attractions like MINILAND Amazing Malaysia and SEA LIFE Underwater Dining experience, where patrons can enjoy a meal amidst seahorses, jellyfish, stingrays, and starfish.
One of the most intriguing developments of the experience economy is the hybrid experience that enhances in-person experiences with digital elements. With just one IKEA store in Manila for over 7,000 islands in the Philippines, the furniture retailer leaned into outdoor locations to create a #IKEAEverywhere experience that transforms public spaces into makeshift IKEA showrooms — restaurants doubled as shopping hubs, nail salons offered a unique browsing experience, and even gyms, clinics, and beaches. This allowed consumers to interact with IKEA’s offerings in the most unexpected places, simply by scanning a QR code to be directed to IKEA’s online shopping platform.
Brands are investing in hybrid immersive and interactive experiences that go beyond the basic functionality. This includes entertainment displays that are digitally enhanced to captivate and involve customers. The future is here, and it is experiential.
Conclusion
The integration of AI into a human and inclusive landscape of Southeast Asia marks a significant shift in the culturally and technologically rich Southeast Asia. This shift extends beyond the mere adoption of new technology; it represents a fundamental change in the downstream effects in life, culture, media, and experiences. Looking at how consumer behavior is headed in the coming years will necessitate the development and implementation of new marketing communication strategies
