Luxury retail is hitting a generational speed bump. Once buoyed by the spending power of older millennials and Gen X, high-end fashion and beauty brands are now facing a slowdown, with Gen Z opting out of traditional luxury splurges.
Most recently, global markets from Paris to Shanghai have reported sluggish sales, prompting concerns across the industry. At the same time, the secondhand apparel market is booming. Thredup’s 2024 Resale Report projects it will reach $350 billion by 2028, growing three times faster than the overall global apparel market. The rise of resale isn’t just a trend; it’s a signal that younger consumers are actively reshaping what luxury means.
According to recent research, Millennials and Gen Z are projected to account for three-fourths of global luxury spending by the end of 2025 – a figure that makes this pivot in taste and behavior impossible for brands to ignore. Conspicuous consumption is losing appeal for a generation raised amid climate crises, economic instability, and digital transparency.
The Rise of Secondhand and Sustainable Shopping
For a generation raised on side hustles and climate consciousness, the resale rack holds more appeal than the luxury boutique. Platforms like Depop, Vestiaire Collective, and The RealReal have become go-to destinations for Gen Z shoppers, trading upcycled finds and limited-run vintage pieces with the same enthusiasm that previous generations reserved for fresh-off-the-runway collections.
Sustainability is part of the draw, but so is value – why spend $2,000 on a new designer bag when you can score a rare archival piece for half the price?
Luxury brands are paying attention. Some, like Gucci and Balenciaga, have partnered with resale platforms or launched in-house re-commerce programs to capture a slice of the growing circular economy. But for Gen Z, these moves only matter if they appear real, not reactionary.
Designer Status Loses Its Shine
Flashy logos are no longer the badge of status they once were. For Gen Z, luxury is shifting away from overt branding and toward values like individuality, sustainability, and authenticity. Rather than chasing the latest drop from heritage houses, young shoppers lean into personal style, often expressed through vintage, upcycled, or indie-label finds.
Many industry reports show how Gen Z consumers consider sustainability a primary factor in their clothing choices, outranking brand prestige. This is reflected in their growing reliance on secondhand platforms and their preference for products that align with their ethics and identity.
A carefully curated thrift-store find or a niche designer piece carries more cultural capital than a mass-produced luxury item. For legacy brands, the challenge is clear: status isn’t just about labels anymore; it’s about meaning.
Economic Pressures Meet Conscious Consumption
Inflation, student debt, and rising housing costs are prompting Gen Z to reassess their spending habits. While their overall spending power is rising, many are adopting frugal lifestyles, not just out of necessity but as a reflection of their values. Movements like “no-buy” and “low-buy” challenges have gained traction on platforms like TikTok, encouraging participants to limit their purchases to essentials. Financial pressures and a growing awareness of environmental and mental health concerns influence this shift.
Discretionary spending in the US is slowing, with luxury fashion down 12% in 2023 and another 9% in 2024, according to the Bank of America Institute. The drop signals a shift toward more intentional, value-driven consumption.
Environmental concerns also play a significant role. Deloitte’s 2024 Gen Z and Millennial Survey ranks climate change as one of the top concerns for younger consumers, influencing their preference for sustainable and ethically produced goods.
This financial restraint isn’t just shrinking purchases; it’s redirecting loyalty toward brands that reflect cultural roots and values.
Local Labels and Cultural Loyalty
Global luxury brands are facing increasing competition from a surge of homegrown talent. Gen Z consumers gravitate toward local designers who blend traditional craftsmanship with modern aesthetics and sustainable practices in markets like Indonesia and Japan.
In Japan, brands like Kapital and Visvim have garnered attention for their artisanal approach and deep cultural roots. Kapital, founded in Kojima, Okayama, is celebrated for its unique designs that draw inspiration from vintage Americana and Japanese heritage. Visvim, established in 2001, is known for its meticulous craftsmanship and commitment to quality, attracting a loyal global following.
In Indonesia, labels such as Sejauh Mata Memandang lead with textile collections grounded in local heritage and environmental consciousness. The brand applies slow fashion principles, utilizing sustainable materials and traditional techniques to create pieces that resonate with environmentally conscious consumers.
These local labels often operate on smaller scales and with slower production cycles – an intentional contrast to the fast-paced churn of global fashion. For Gen Z, the appeal lies in purchasing pieces that feel personal and principled, rooted in their cultural identity and values.
A Digital Pivot to Stay Relevant
As Gen Z’s digital engagement deepens, luxury brands increasingly explore virtual platforms to connect with this tech-savvy demographic.
Gucci launched the “Gucci Garden” experience on Roblox in 2021, offering an interactive virtual exhibition celebrating the brand’s creative vision. Players could explore themed rooms inspired by Gucci’s campaigns, with their avatars absorbing elements of the exhibition and transforming into unique digital artworks.
These initiatives reflect a broader shift in the luxury industry, where digital interactions increasingly influence consumer behavior. According to Bain & Company, approximately 70% of luxury purchases are influenced by online engagement, even if the final sale happens in-store.
To further enhance personalization, brands like Louis Vuitton invest in AI-driven tools to tailor marketing campaigns and product recommendations based on consumer behavior. For Gen Z, it’s not just about the product; it’s about the experience.
Rethinking Luxury for a New Generation
Legacy brands are learning that Gen Z wants more than a product – they want a point of view. In response, some of fashion’s biggest names are beginning to reframe luxury not as excess but as intention.
Burberry and Stella McCartney have rolled out repair and resale services, tapping into the circular economy. In 2023, LVMH announced plans to expand its environmental initiatives through Life 360, a roadmap focused on sustainable design, regenerative agriculture, and product longevity. Smaller labels are going even further, with capsule collections made entirely from deadstock fabrics or upcycled materials.
But authenticity remains the dealbreaker. Gen Z is adept at detecting greenwashing and is quick to call it out. A flashy sustainability pledge means little without visible follow-through, and younger consumers are doing their homework.
The path forward for luxury brands will likely require more than a seasonal campaign. It will take real investment in ethical production, meaningful storytelling, and experiences that resonate across digital and physical worlds. For a generation redefining value on its own terms, prestige alone no longer sells.
The Bottom Line
Luxury’s future won’t be built on legacy alone. With Gen Z rewriting the rules of status, style, and spending, brands that once thrived on exclusivity now face a different challenge: staying relevant in a world where authenticity, transparency, and values matter just as much as design.
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AI is transforming market research at breakneck speed. It can analyze vast datasets in seconds, extract sentiment from global conversations, and generate predictive insights that shape business decisions. The efficiency is undeniable. But AI alone is not enough.
Despite its advancements, AI will not replace human researchers. It operates within the confines of its training data, lacks contextual awareness, and cannot anticipate shifts before they emerge. AI is powerful, but it is not infallible. A misinterpreted trend or misleading prediction can lead to costly mistakes in consumer insights.
AI’s capabilities should not be mistaken for true intelligence or strategic thinking. It recognizes patterns in historical data but lacks industry expertise and the ability to ask the right questions in the first place.
Brands that rely solely on AI-driven research risk making flawed decisions based on incomplete, biased, or outdated data. AI will continue to reshape market research, but human expertise remains indispensable for interpreting insights, challenging assumptions, and providing strategic foresight.
AI Lacks Context – And That’s a Problem for Market Research
AI predicts patterns; it does not comprehend meaning. It processes language based on past data, but it cannot truly understand context the way humans do. This limitation becomes clear in market research, where cultural nuance, sentiment, and local market dynamics are critical in shaping consumer behavior.
Consider consumer sentiment analysis. A phrase like “That’s sick” can signal enthusiasm in one demographic but disapproval in another. In Japan, where indirect communication is common, consumers often soften negative feedback with neutral or ambiguous phrasing. AI models trained primarily on Western datasets may misinterpret this restraint as positive sentiment, leading to flawed insights.
AI’s failure to grasp deeper cultural shifts can also distort market trends. For example, an AI model analyzing China’s luxury market might highlight rising spending on high-end brands without recognizing the underlying sociopolitical drivers – such as government regulations on conspicuous wealth or the rising preference for quiet luxury among younger consumers.
Without human oversight, AI-driven research risks flattening cultural differences into misleading generalizations. An AI-optimized campaign, for instance, might target Gen Z in the U.S. and Southeast Asia with identical messaging, overlooking the vastly different values that shape purchasing decisions in each region.
AI processes data, but market research depends on understanding. Without human intelligence, context is lost.
Bias in AI Training Data
AI learns from data – flawed data leads to flawed insights. Bias in AI is not just a technical issue; it is a systemic challenge with real-world consequences for brands.
A Virginia Tech study of 555 AI models found bias in 83% of them. These biases stem from historical data imbalances, overrepresenting certain demographics, and cultural blind spots embedded in training datasets. In market research, this can distort consumer insights, favoring dominant markets while sidelining diverse global perspectives.
Western consumer behavior, for example, dominates many AI training datasets. A fashion brand using AI to forecast global trends may receive insights heavily weighted toward European and North American aesthetics, overlooking emerging influences from Southeast Asia, Africa, or Latin America. AI may predict minimalist designs as a universal trend, while in reality, bold prints and intricate craftsmanship remain strong drivers of demand in emerging markets.
Bias extends beyond market trends to language models. Sentiment analysis tools trained predominantly in English struggle to detect tone, humor, and idiomatic expressions in other languages. AI interpreting social media conversations in India may fail to recognize how Hinglish (a blend of Hindi and English) influences consumer sentiment, leading to misclassifications.
These biases have real economic implications. A global brand launching an AI-driven campaign based on incomplete or skewed insights risks alienating key audiences, misallocating marketing spend, or missing untapped opportunities.
AI is a tool, not a substitute for human judgment. Researchers are essential for auditing AI insights, diversifying training data, and ensuring context before brands act.
AI Can’t Think – Flawed Prompts Lead to Flawed Insights
AI is only as accurate as the prompts it receives. Unlike human researchers, AI does not refine its inquiries. It passively generates responses based on query structure – even if the prompt is flawed, vague, or misleading.
Even skilled, prompt engineers face limitations. A poorly phrased prompt can generate oversimplified, generic, or incorrect conclusions. AI does not ask clarifying questions; it provides an answer, regardless of accuracy.
Take a simple query: “What are the key market trends in China’s e-commerce sector?” AI will likely generate an answer from public sources, summarizing data that may be outdated, incomplete, or biased toward certain industries. But AI cannot:
Verify insights against proprietary industry reports
Assess real-time regulatory changes
Distinguish between consumer behavior and aspirational trends
A human researcher, in contrast, would challenge surface-level answers, refine the inquiry, and verify data sources before drawing conclusions. They would incorporate firsthand industry reports, recent policy shifts, and expert interviews – elements AI alone cannot access.
This limitation is particularly risky when business leaders take AI-generated insights at face value. The consequences could be costly if a company bases expansion decisions on generic AI-driven market reports without considering local economic shifts or competitive dynamics.
Market research isn’t just about answers – it’s about asking the right questions. Until AI can think critically, human researchers remain essential for producing insights that are not just fast but accurate, relevant, and actionable.
AI and Data Privacy – The Hidden Risk for Market Research
Market research relies on proprietary data – confidential insights, sales figures, and competitive intelligence. However, AI models like ChatGPT cannot analyze private datasets unless directly integrated with a company’s internal systems. Even then, concerns over security, compliance, and intellectual property create significant barriers to full AI adoption in research.
Brands should be cautious about exposing sensitive business data to AI platforms. Customer transactions, internal strategy documents, and consumer feedback databases contain valuable insights that cannot be legally or ethically uploaded to public AI tools without strict safeguards.
Beyond security risks, data governance laws like GDPR (Europe) and CPRA (California) impose strict regulations on how consumer information is processed and stored. For example, an AI model generating insights from consumer purchasing data in the EU may inadvertently violate compliance rules if proper consent mechanisms are not in place.
Consider a global retailer analyzing sales trends. If it relies on AI without integrating its proprietary transaction data, the model defaults to public consumer trends, often failing to reflect internal sales dynamics. The result? A misleading picture of market performance.
Privacy concerns also extend to consumer sentiment analysis. AI scrapes insights from social media, forums, and online reviews, but consumers do not always consent to their data being used for machine learning. Without clear ethical guidelines, brands risk violating consumer trust – or even regulatory standards – by unknowingly using AI-driven research based on unauthorized data extraction.
For AI to be a viable research tool, brands must build secure, proprietary models that ensure privacy compliance without compromising analytical potential. Until then, human researchers remain essential in handling market data ethically and strategically.
AI Relies on the Past – And That’s a Problem for Forecasting
AI is built on history. Every insight, prediction, and analysis it generates comes from past data. AI excels at pattern recognition but struggles with the unexpected.
Generative AI cannot foresee market disruptions, cultural shifts, or industry-defining moments that lack historical precedent. It operates within the boundaries of its training data, making it reactive rather than truly predictive.
Had AI forecasted the future of digital advertising in 2018, it would have prioritized Facebook and Instagram, entirely missing TikTok’s meteoric rise. AI lacks real-world intuition, qualitative industry insights, and cultural foresight – critical skills that human researchers possess.
AI also fails to anticipate black swan events – unforeseen disruptions that reshape industries overnight. The COVID-19 pandemic, financial collapses, and geopolitical crises that trigger supply chain shifts are beyond AI’s predictive capabilities.
AI’s reliance on past data also reinforces outdated assumptions. A model trained on consumer trends from five years ago may still prioritize pre-pandemic spending behaviors, outdated media consumption habits, or product preferences that no longer align with reality.
Human researchers, by contrast, don’t just analyze the past – they interpret weak signals, identify emerging behaviors, and anticipate shifts before they become trends. They engage in social listening, expert interviews, and in-field observations, capturing the intangibles that AI misses.
Brands that rely too heavily on AI risk making decisions for a world that no longer exists. The real advantage lies in blending AI’s efficiency with human foresight.
AI’s Misinformation Problem – And Its Consequences for Market Research
AI doesn’t just analyze data; it generates it. And that creates a serious challenge for market research: misinformation.
AI models do not verify sources, cross-check facts, or assess credibility. They generate responses based on statistical probability – not journalistic rigor or industry expertise. As a result, AI can hallucinate, fabricate, or reinforce false narratives if the underlying data is flawed.
This can result in flawed, high-stakes decisions in market research. A global brand basing a product launch on AI-generated insights risks misallocating millions if the model’s training data is flawed, biased, or outdated.
Misinformation compounds over time. When biased assumptions are repeatedly fed into AI systems, errors are reinforced, creating a cycle of false insights. This is particularly dangerous in industries where consumer preferences shift rapidly and misinformation spreads easily – such as beauty, health, finance, and sustainability. If an AI model trained on outdated reports falsely claims Gen Z is abandoning luxury goods or that plant-based diets are declining, brands that act on these insights risk missing real opportunities.
Misinformation isn’t always deliberate – sometimes, it stems from incomplete or outdated datasets. However, in market research, the cost of acting on false data remains the same, regardless of intent.
Human oversight is essential. AI can accelerate research, but only human expertise ensures insights are accurate, credible, and free from misinformation.
AI Lacks Brand Intelligence
AI can process vast amounts of data, but it lacks brand-specific knowledge. Unless explicitly trained, it cannot access proprietary company reports, internal sales data, or confidential market intelligence. AI insights remain broad, generic, and detached from a brand’s unique positioning without direct integration.
In highly competitive industries, this limitation is costly. Consider a global CPG company researching snack preferences across different markets. AI can summarize consumer sentiment from public data but cannot:
Analyze internal sales across product categories
Evaluate past marketing campaigns’ impact on brand perception
Incorporate real-time data from loyalty programs or first-party surveys
Without these layers of proprietary insight, AI’s recommendations remain surface-level. They may identify macro trends but cannot drive brand-specific decision-making.
AI also falls short in competitive analysis. It can compare publicly available brand narratives, pricing, and digital marketing strategies, but it cannot assess a competitor’s internal strategy. A luxury fashion brand entering India needs more than AI’s broad take on “Indian consumer behavior.” It requires firsthand research, competitor benchmarking, and localized insights – elements AI cannot generate independently.
Ultimately, market research is not just about understanding consumers – it’s about understanding them in the context of a brand’s goals, positioning, and competition. AI can identify trends, but only human researchers can align insights with business strategy, competition, and brand equity.
AI is a Tool – Human Expertise is the Advantage
AI is revolutionizing market research, accelerating data analysis and expanding access to insights. But it remains just that – a tool, not a replacement for human expertise. AI can summarize data, detect patterns, and automate tasks, but it cannot think critically, challenge assumptions, or grasp the deeper context behind consumer behavior.
Brands that rely solely on AI risk decisions based on incomplete, biased, or outdated insights – errors that can cost millions. Those who combine AI-driven efficiency with human judgment, strategic reasoning, and cultural expertise will gain a decisive competitive edge.The future of market research isn’t AI vs. humans – it’s AI with humans. The brands that master this balance won’t just adapt; they will lead.
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Once dismissed as retail relics, physical storefronts are making a surprising comeback – this time, powered by digital-first brands. From pop-ups to permanent flagships, online-native companies are opening brick-and-mortar locations not out of necessity but by design.
Amazon Style offers shoppers curated fashion based on browsing history. Warby Parker’s clean, minimalist stores blend seamlessly into upscale neighborhoods, offering eye exams alongside Instagrammable interiors. In Bangkok, Pomelo Fashion invites customers to try on app-selected items in sleek fitting rooms before completing purchases from their phones.
It’s a reversal that reflects more than a retail pivot. While digital advertising remains cheaper in terms of pure reach, online CPMs average between $3 and $10, compared to $22 or more for traditional media, customer acquisition online is becoming less efficient. As competition intensifies and privacy changes limit ad targeting, many direct-to-consumer brands are seeing digital acquisition costs climb, sometimes exceeding average order values. In this landscape, storefronts are emerging as strategic complements: part showroom, part service center, part brand theater. For these brands, it’s not just about footfall. It’s about reducing digital dependency and building loyalty through real-world engagement.
Why Physical Retail Now
For years, e-commerce promised a frictionless future – one-click checkouts, fast shipping, and endless inventory. But as digital storefronts multiplied, so did the challenges: skyrocketing customer acquisition costs, rising return rates, and a sea of sameness. Today, even the most digitally fluent brands are discovering that a website alone can’t deliver emotional connection or tactile trust.
Physical stores are filling the gap. A well‑designed storefront gives customers something the digital shelf can’t: the ability to touch, try, and experience. According to the U.S. Census Bureau, e‑commerce accounted for 15.3 % of total U.S. retail sales in 2023—a share that continues to rise quarter by quarter. While physical stores still drive the bulk of retail activity, the steady growth of online shopping, especially during major events like Black Friday, signals a lasting shift in consumer behavior.
Still, not all categories follow the same trajectory. Furniture and home‑furnishing purchases increasingly migrate online; nearly 31 % of home furnishing sales occurred digitally in 2023.Consumer electronics remains split, with value and convenience driving online growth, but big‑ticket purchases often favor in‑store confidence. And goods like plants, outdoor supplies, garden products, and decorative home items, where touch, size, and immediacy matter, have stubbornly resisted complete digital takeover. Big‑box outlets continue to dominate these segments, with traditional furniture and outdoor‑living stores capturing the lion’s share of consumer spending.
In other words, the price tag and physicality of the item strongly influence where consumers choose to shop. You can order a lamp or phone online, but the comfort of a store still wins when it comes to the feel of a sofa, the freshness of a plant, or the scale of a patio set.
But these new retail spaces aren’t built for volume. They’re designed for impact. Brands are leaning into high-touch service, curated displays, and neighborhood-specific assortments. Instead of acting as isolated outposts, these stores function as real-world extensions of the brand – driving online traffic, deepening engagement, and turning one-time buyers into repeat customers.
The playbook is shifting: Stores aren’t just about sales – they’re about staying top of mind in a distracted, digital-first world.
Pomelo Fashion’s Omnichannel Evolution
Founded in 2013 by David Jou and Casey Liang, Pomelo Fashion has emerged as a leading omnichannel fashion brand in Southeast Asia. Initially operating solely online, the company has expanded its presence with physical stores in Thailand, Singapore, Indonesia, and Malaysia.
Central to Pomelo’s strategy is its “Tap.Try.Buy” service, which allows customers to order items online, try them on at a designated store, and pay only for what they choose to keep. This approach enhances the shopping experience by integrating the convenience of online browsing with the assurance of in-store fitting.
In May 2025, LeadIQ reported that Pomelo Fashion achieved $750 million in annual revenue, marking a substantial leap from the $38 million recorded in 2022
Pomelo’s expansion efforts have included entering new markets, such as Cambodia, where it partnered with Zando Group to establish a retail presence. Additionally, the company has focused on enhancing supply chain efficiency by implementing unified inventory systems and streamlining return processes.
By seamlessly blending online and offline experiences, Pomelo Fashion continues to adapt to the evolving retail landscape, aiming to meet the diverse preferences of its customer base.
Why online brands are opening stores
For digital-first companies, opening a physical store isn’t about replicating traditional retail – it’s about amplifying what already works. With online customer acquisition costs climbing and attention spans shrinking, many brands view stores as a channel for deeper engagement rather than just sales.
Stores offer what websites can’t: human connection, hands-on product trials, and immediate service. They create environments where discovery feels organic and tactile, and shoppers can linger, ask questions, and build trust. That trust often carries over into digital behavior. According to Warby Parker’s most recent earnings report, customers who engage with online and retail touchpoints tend to have higher lifetime value.
For brands like Pomelo, stores also provide critical feedback loops. Each in-person interaction offers insights into fit, preferences, and regional trends – data that helps refine everything from product design to inventory allocation. Physical locations are no longer separate from e-commerce platforms – they’re extensions of them, working in sync to personalize the experience and drive loyalty.
The result is a more resilient retail model, one that spans screens and sidewalks.
The evolving role of the website
While physical spaces gain momentum, the brand website remains the nerve center of the modern retail ecosystem. But its role is shifting – from being the sole point of sale to becoming a connective platform that bridges discovery, transaction, and service.
Today’s websites aren’t just digital catalogs. They power appointments for in-store try-ons, host loyalty programs, manage returns, and sync with physical inventory in real-time. At Pomelo, the app and website are critical to the “Tap.Try.Buy” model, allowing customers to browse, reserve, and purchase without friction. Warby Parker’s platform does the same, letting users schedule eye exams, browse local store stock, or complete an in-store purchase online.
For brands blending offline and online, the website is no longer the endpoint – it’s the interface. It carries the brand’s identity, handles the logistics, and learns from each customer interaction. As stores become more experiential, the website does the heavy lifting behind the scenes, ensuring a seamless handoff between channels.
The digital shelf might not be enough on its own anymore – but it’s more important than ever in making the entire system work.
What shopping will look like in 2050
If you walk into a store in 2050, you might not walk out with a bag. Instead, your personalized selections – curated by AI, informed by biometric data, and filtered through your sustainability preferences – could arrive at your door within hours, if not minutes.
Retail futurists envision spaces that act less like inventory warehouses and more like interactive brand labs. Physical stores may shrink in size but grow in sophistication, equipped with augmented reality mirrors, smart shelves, and real-time language translation for global shoppers. If consumers opt-in, facial recognition could trigger dynamic pricing based on loyalty status or previous purchases.
Sustainability will likely shape store formats, too. Modular, low-waste layouts, carbon-neutral delivery options, and locally sourced assortments could become table stakes. Data from online and in-store behavior will sync seamlessly, creating a “phygital” loop where discovery, trial, and purchase span both worlds.
But some things won’t change. Shoppers will still crave connection, story, and the confidence that comes from seeing and touching a product before committing. The brands that win in 2050 may look futuristic – but at their core, they’ll understand something timeless: trust is built person-to-person, even when powered by pixels.
Retail’s Quiet Reinvention
What began as a tactical move to lower return rates or offer fitting rooms has turned into something more fundamental: a rethinking of what retail means. Digital-first brands aren’t just entering physical spaces; they’re redesigning them on their terms.
These aren’t legacy department stores or big-box chains. They’re focused, frictionless, and hyper-intentional. Every square foot has a purpose, whether to host an eye exam, facilitate same-day pickup, or serve as a live feedback loop for product development.
The quiet reinvention underway isn’t about going back – it’s about moving forward with the tools, data, and expectations of a new era. The lines between online and offline are no longer blurred. They’re gone entirely.
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The consumer journey used to begin with intent. A need arose, a search began, and brands vied for attention on the results page. That digital arena, structured around keywords, ads, and SEO, rewarded whoever best spoke the search engine’s language. That model is losing ground.
AI is altering not only what consumers see but also how they seek. Search is giving way to suggestion. Generative AI tools such as ChatGPT, Google’s SGE, and TikTok’s algorithmic feed replace active intent with passive input. Type less. Scroll more. The funnel is fading.
In this new model, over half of consumers prefer product suggestions from generative AI rather than search engines. Nearly seven in ten say they’re ready to act on them. What once required comparison and evaluation is increasingly instant and unexamined.
The implications for brands are structural. Visibility is no longer won on a search results page. The new battleground lies inside opaque recommendation systems, where influence depends on what the algorithm surfaces, not what the consumer seeks.
When Search Becomes Suggestion
Once, the journey began at the search bar. Now, it starts within the logic of a machine. More and more choices—from headphones to holidays—emerge not from exploration but from a feed or prompt. Curated results appear from systems trained on data the consumer never sees.
This isn’t hypothetical. In the past year, 58 percent of global consumers have begun using generative AI for product recommendations, according to Capgemini. In the UK, 37 percent of under-40s now use AI for more than half of their searches. In the US, it’s 32 percent. The expectation isn’t to browse. It’s to receive, instantly and with zero friction.
Even when consumers still use search engines, their behavior has shifted. Google’s Search Generative Experience now places AI-generated summaries above all other results.
According to Adobe, in 75 percent of cases, these overviews end the search then and there. Users find what they need without ever visiting a brand’s site. Visibility, once a matter of rankings and backlinks, is now defined by what the machine considers relevant.
For brands, this changes the calculus. Winning a keyword no longer guarantees visibility. If your product is not named in the AI’s shortlist, you do not exist. Recipe platforms have already felt the impact. In late 2024, traffic fell sharply as AI began answering holiday cooking questions outright. Only brands that were directly cited, such as Allrecipes, maintained strong engagement.
The Vanishing Middle
The old journey had a rhythm. Awareness led to research, research to comparison, and comparison to choice. Each step allowed brands to step in, whether through ads, testimonials, or product pages. That middle ground is disappearing.
Instead of reading dozens of reviews, consumers now ask AI assistants which model to buy. They trust the tools to compare specs and recommend what fits. A global survey from Attest in early 2025 found that 47 percent of consumers use generative AI tools such as ChatGPT, Microsoft Copilot, or Claude to research products before purchasing. In Canada and the UK, the number rises to over half. These are no longer fringe behaviors. They are becoming the norm.
The reason is simple. AI makes the process feel efficient. It can process reviews in seconds, highlight differences, and suggest what someone like you might want. Research by Bain & Company shows that in China, where e-commerce evolves rapidly, 58 percent of consumers already trust AI product recommendations, and 65 percent are comfortable using it to make decisions. On platforms like Taobao, users can now ask what’s trending, what fits their style, or what is on sale, all through generative AI chat.
Consumers are not just skipping steps. They are outsourcing them. And many prefer it. Capgemini reports that 68 percent of global consumers are now willing to act on AI-generated product recommendations. This includes both first-time purchases and routine replacements. What was once a journey is now a prompt.
For brands, this compression brings a new kind of challenge. The window to influence is smaller. If AI chooses the shortlist, brands must win earlier. At the same time, the impact of inclusion is greater. Being one of three suggestions matters more than ranking seventeenth on a search page. Presence in the recommendation layer is now critical.
How Trust in AI Splits Across Borders
While AI is changing how people shop worldwide, not everyone is moving at the same speed or with the same trust. The gaps span age, location, and gender, showing where AI influence is strongest and where hesitation remains.
In Southeast Asia, adoption is surging. A regional study by SleekFlow found that 88 percent of shoppers across Indonesia, Malaysia, and Singapore rely on AI recommendations to guide purchases. Ninety-two percent use AI-powered platforms for personalized suggestions. These markets are mobile-first and integrated across platforms, making them more receptive to automation that simplifies shopping.
By contrast, consumer sentiment in the US remains cautious. According to the Retail Media Breakfast Club, 55 percent of American shoppers do not trust AI shopping chatbots or automated product suggestions. Among those who encounter these tools, fewer than half choose to engage. The skepticism often stems from perceived bias, previous poor experiences, and a preference for human reassurance in more complex decisions.
Age plays a defining role. Research from Attest shows that 60 percent of shoppers under 50 are willing to use AI assistants or chatbots on brand websites, compared to only 43 percent of those aged 50 and older. Younger consumers tend to see AI as infrastructure—a tool rather than a threat. They also expect higher levels of personalization. Capgemini reports that two-thirds of Gen Z and millennials want AI-powered product suggestions tailored to their behavior and preferences.
A measurable gender divide has also emerged. A recent multi-country survey by Attest found that 52 percent of men are comfortable with AI-generated product recommendations, compared to just 43 percent of women. The reasons vary, but often include differences in trust toward technology and the desire to retain control over purchasing decisions.
As more of the consumer journey is shaped by algorithms, these differences become more significant. Brands using AI in customer-facing roles, such as chatbots, smart recommendations, or predictive tools, must calibrate the experience. This may involve offering human support options, explaining how suggestions are generated, or allowing customers to set their own preferences.
AI may be guiding the journey, but consumers still decide whether to follow it.
Rethinking Visibility
The scramble to adapt is well underway. As the consumer journey shifts from search to suggestion, brands are confronting a simple truth: if they are not recommended, they are not seen.
This shift has prompted a quiet pivot. Marketing teams that once focused on SEO and paid search are now trying to understand the internal logic of generative AI. A new term is gaining traction: AI Optimization, or AIO. It refers to becoming discoverable not through indexed pages, but through the language models that shape how consumers discover information.
The mechanics of AI optimization are still evolving. Unlike search engines, generative tools do not explain how they rank or retrieve results. But early patterns are emerging. Content written by brands often performs better than affiliate-style reviews. Clear metadata and direct answers increase the chances of being cited. Brands that lead in category-specific Q&A content are more likely to appear in AI-generated responses. The tactics resemble SEO in structure, but not in strategy.
The urgency is real. In late 2024, when generative AI summaries began appearing at the top of search results, retailers and publishers saw immediate declines in organic traffic. Recipe websites were among the first to feel the impact. Pages that once ranked highly for terms like “how long to roast a turkey” were bypassed by AI-generated summaries offering the answer directly. According to Retail TouchPoints, only sites cited within the summaries retained or gained traffic during the holiday surge.
This marks a shift in where and how attention is directed. Investment is following the trend. Capgemini’s latest consumer trends report shows that seven in ten consumer product and retail brands now see generative AI as transformative. The shift extends beyond content and search, reaching across ecommerce, brand-owned channels, and customer service platforms. Rather than simply attracting clicks through advertising, these brands are now focused on teaching algorithms to recommend them first.
This new strategy begins upstream. Influence must be established before the consumer even knows what to search for.
When Precision Becomes Overreach
Personalization has always been the promise. AI made it scalable. Yet as recommendations become more precise, the line between relevance and intrusion starts to blur.
Retailers are already tailoring storefronts, emails, and product bundles in real time using algorithms that learn from shopper behavior. According to SleekFlow, 86 percent of Indonesian shoppers and 80 percent of Malaysians are more likely to buy when recommendations feel personalized. These are not marginal lifts. For many brands, it can be the difference between cart abandonment and conversion.
Yet enthusiasm has limits. In the US and Europe, many consumers remain uneasy about how much insight AI systems have into their preferences. The same personalization that increases engagement can raise concern when it feels overly intrusive. An ad that references recent browsing may feel helpful. One that appears to tap into emotional insecurities can feel invasive. This is especially true in sensitive categories such as health, beauty, and finance.
The challenge for brands is not just technical but perceptual. When consumers do not understand why a suggestion appears, trust begins to erode. Some companies are responding by rethinking opaque recommendation systems. Others are adding cues such as “Because you bought X” or “Similar customers preferred” to explain suggestions without revealing the full algorithm.
At its best, personalization mimics human intuition. But when it becomes too precise, it reminds people they are being watched. The opportunity lies in keeping suggestions helpful without making them feel inevitable. Brands that succeed may not be the ones with the most data, but those with the most restraint.
Where Did All the Traffic Come From?
The numbers still arrive in dashboards: sessions, bounce rates, time on page. But what drives them is shifting. AI-generated traffic behaves differently. It is erratic, difficult to attribute, and increasingly where the momentum is.
During the 2024 holiday season, US retailers reported a sharp surge in visits originating from generative AI tools. Adobe Analytics reported that traffic from AI assistants to retail sites rose more than 1,300 percent year over year, with Cyber Monday alone spiking nearly 1,950 percent. By early 2025, volumes had normalized but remained 1,200 percent higher than six months prior. These were not background processes. They were real consumers arriving through prompts, voice queries, and curated answer boxes.
Most arrived without a breadcrumb trail. They skipped homepages, ignored menu structures, and bypassed campaign entry points. Often, the AI had already filtered their options. The user clicked through with purpose, but no context. They had been handed a short list and were already deep into decision mode.
The design assumptions behind most ecommerce sites are ill-suited to this pattern. Recommendation engines still default to broad segmentation. Onsite personalization depends heavily on past behavior. But AI-driven visits come from somewhere else entirely. The visitor may never have seen an ad. They may not have been retargeted. They are acting on a suggestion from a model trained on billions of pages, but not necessarily one the brand paid to influence.
When the Shelf Is Chosen for You
Consumers have always edited the market down to a handful of options. AI just gets there first. Instead of reviewing dozens of choices, people are increasingly presented with three or four. In many cases, that shortlist is generated automatically. The product that appears first is not always the best or cheapest. It is the one the model selects, based on inputs the consumer never sees.
This has created a new visibility economy. Brands are no longer just competing for attention. They are competing for inclusion. One generative AI platform recommends a particular vacuum cleaner because its specs were easier to parse. Another suggests a niche beauty brand because it had more verified customer reviews. These are not paid placements. They are algorithmic guesses at relevance, made instantly and often without explanation.
The result is a narrowing of the funnel before the consumer ever enters it. In B2B markets, this is already measurable. A 2025 G2 report found that nearly one in ten business buyers now skip the traditional shortlist process entirely, moving forward with a single vendor surfaced by AI. In these cases, the machine performs triage on behalf of the buyer. The rest of the market never gets a look.
The implications are not subtle. Being second no longer means being part of the decision. It means being invisible.
From Funnel to Feedback Loop
The consumer journey is no longer a funnel. It is a feedback loop, shaped less by desire than by data. When AI becomes the first point of contact and the final nudge to purchase, brands lose the space in between. They no longer guide decisions. They wait to be selected.
This is not just a change in channels. It is a change in power. Brands built their digital strategies around discoverability, assuming the consumer would come looking. That assumption is obsolete. AI is now the gatekeeper, the recommender, the editor of choices. And unlike search engines, it does not reward effort. It rewards fit.
The question is not how to rank. It is how to be picked. That means understanding how generative systems evaluate relevance, context, and authority. It means building content for a model, not a human. It means accepting that visibility is no longer earned through awareness but conferred through inclusion.
Most brands are still trying to optimize the journey. The smartest ones are rebuilding for a world where the journey is optimized by someone else.
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Protein has slipped out of the gym and into everyday life. It’s no longer the domain of weightlifters or meal-prep obsessives, but something far more ordinary and far more widespread. In Britain, it now turns up in desk drawers, schoolbags, glove compartments, and corner shop fridges. It’s being stirred, shaken, squeezed, and snackified. And, crucially, it’s not being consumed for muscle. It’s for focus. For balance. For the small but satisfying sense of doing something right.
Sales of protein bars, powders, and drinks have climbed 24.2% in the past year, pushing the UK’s sports nutrition market to £1.1 billion. But the term “sports” is misleading. For many, protein isn’t about performance at all. It’s about practicality. Commuters pick up ready-to-drink shakes between trains. Office workers reach for a bar between Zoom calls. Parents hand protein yoghurts to teenagers because they feel vaguely healthier than crisps. Protein, today, is about keeping things ticking over.
That quiet normalisation is most obvious on the high street. Where once there was a dusty corner of the supermarket for “active lifestyles”, now there are prominent displays of high-protein snacks, cereals, bakery items, and even desserts. It’s a word that works across the nutritional spectrum, something that can sit beside indulgence as easily as it can beside restraint.
And British shoppers aren’t short on options. Shelves are filled with chocolate-coated, dairy-free, oat-based, and whey-packed bars, flavored with everything from peanut butter to salted caramel. The variety says as much about branding as it does about diet. Protein has become shorthand for modern food values: a desire for function, as well as taste, convenience, and, increasingly, identity.
Protein is no longer just a supplement. For many, it reflects small, everyday choices that align with broader intentions—eating well, staying alert, and maintaining balance. In a culture increasingly shaped by wellbeing, high-protein foods offer a quiet reassurance that you’re doing something good for yourself.
What’s Driving the Protein Push
What’s driving protein’s rise isn’t hype, but how effortlessly it fits into everyday routines. Unlike other health trends that require restriction or reinvention, protein works quietly in the background, adding structure, energy, and reassurance. From Gen Z to pensioners, each generation is finding its own reasons to embrace it.
Millennials and Gen Z are leading the shift, but they’re not chasing muscle gains. Recent research revealed that over 60% of UK adults under 35 say they consume high-protein foods to feel energised and manage stress, rather than for fitness. On platforms like TikTok, #highproteinmealprep has surpassed 700 million views, with fridge tours and influencer routines turning protein bars and powders into everyday essentials. These are not supplements. They are lifestyle markers, shared as much for accountability as for aesthetics.
Yet the interest is not confined to the under-40s. In a recent survey, 45% of UK consumers over 55 said they were increasing protein intake to support healthy ageing. This group is not buying protein for trend’s sake, but for muscle preservation and mobility. The shift reflects a broader awareness that protein is not just for the gym. It is a foundation for long-term wellbeing.
One motivation stands out across age groups and lifestyles: functionality. Unlike diets that cut, cleanse, or punish, high-protein choices add something. They help people feel fuller, stay sharper, snack less, and simplify mealtimes. This reflects Britain’s broader wellness economy, where the emphasis is on feeling well rather than performing wellness.
This also helps explain why consumers prefer familiar formats. Bars, shakes, yoghurts, and puddings continue to dominate, not because they are new, but because they are practical. Most shoppers are not looking for lab-designed alternatives. They want recognisable foods that fit their habits and offer clear functional benefits.
The result is not a fleeting trend, but a gradual evolution in how people approach food. Protein is not a disruptor. It is an enabler. It offers small, practical wins that add up over time. In a culture where wellness is no longer niche, that promise holds lasting appeal.
The Brand Strategy Behind the Boom
As the appetite for protein grows, so too has the way it is marketed. In supermarkets and corner shops alike, protein is no longer confined to the health aisle. It appears on endcaps, in meal deals, and even in vending machines. It has been repositioned not as a supplement, but as a shortcut to modern living.
Marketing once focused on performance: leaner, stronger, faster. Now it leans toward everyday credibility. Products no longer ask consumers to train harder. They position themselves as tools to help people keep going. UFIT’s ready-to-drink shakes, for instance, are priced at £1.79 for a grab-and-go bottle, aimed at shoppers who have never set foot in a supplement store. Grenade, one of the UK’s bestselling protein bar brands, leads with indulgence rather than nutrition. Flavors like white chocolate cookie, fudge brownie, and peanut butter make the experience feel more like a treat than a transaction.
Even traditionally masculine brands like Jack Link’s have adapted. The US-born jerky maker now invests in UK campaigns across esports, festivals, and social media. This is no longer protein for the gym. It is protein for gaming, raving, and late-night snacking. The shift is strategic. In Britain, protein has become a lifestyle.
Much of this success comes down to the flexibility of the format. Bars and shakes don’t require a new habit. They fit easily into existing ones. That’s also why brands have doubled down on packaging that communicates quickly, using bold labels like “20g PROTEIN,” simplified ingredient lists, and soft color palettes borrowed from the wellness world.
And the storytelling doesn’t stop at the shelf. Influencer partnerships, especially with micro-influencers who reflect everyday routines, have helped protein products blend seamlessly into social feeds. Not as a flex, but as a cue. In a world where the line between food and self-image continues to blur, that visibility matters.
In the UK, brands aren’t selling protein as performance. They’re selling it as permission. Permission to snack, to simplify, to opt into health without opting out of pleasure. It is this careful balance between function and familiarity that has propelled protein from niche to necessity.
Image credit: Huel
Huel’s success tells a story far bigger than meal replacement. Founded in the UK in 2015, the brand launched with a promise of nutritional completeness and convenience, offering vegan shakes and powders for those too busy to cook but unwilling to compromise on health. It quickly moved from niche to norm, propelled by savvy digital marketing and a cult-like community of professionals, students, and time-pressed urbanites.
What makes Huel notable is how it positioned protein as a practical staple instead of a specialist tool. Its expansion from online-only sales to supermarket shelves brought ready-to-drink shakes and bars into the hands of everyday shoppers. By 2024, Huel’s global footprint had reached 25,650 stores, its UK retail presence strengthened, and its annual sales hit £214 million, an increase of 16 percent year-on-year. The brand’s profitability also grew sharply, with pre-tax profit nearly tripling in the same period.
Huel hasn’t leaned on performance or indulgence. Instead, it has championed efficiency, routine, and nutritional balance, values that resonate with modern British consumers, especially millennials and Gen Z. In doing so, it helped redefine what protein means in everyday life.
How the UK Compares Globally
Britain’s protein habit may feel local, but it is playing out on a global stage. Around the world, consumers are rethinking when and why they reach for protein. Yet the UK stands apart not in volume, but in tone. While other countries frame protein around performance, Britain treats it more like a life skill. It is about balance, ease, and everyday upkeep.
In the United States, the trend has gone maximalist. Protein shows up in ice cream, pancake mix, breakfast cereal, and even candy. Proffee, a mash-up of protein and iced coffee, started as a TikTok trend and quickly moved into cafés and ready-to-drink ranges. Sixty-three percent of Americans actively look for protein in snacks. The line between indulgence and function is all but gone.
In Southeast Asia, the shift looks different. Economic growth has made animal protein more accessible, driving up demand. At the same time, younger consumers in countries like Thailand and Singapore are drawn to plant-based alternatives, which they associate with health, sustainability, and modernity. In Thailand, sixty-seven percent of consumers say they plan to reduce meat consumption. The motivation is not ethical but personal. People want to feel better and live longer.
In Japan, protein trends are shaped by age. An older population is fuelling demand for products that support strength and mobility but are easy to consume. Protein jellies, soft snacks, and drinkable supplements are now common, pitched as daily maintenance rather than athletic fuel.
China is experiencing a boom in online protein sales, up sixty-eight percent yearly in 2023. A mix of fitness aspirations and beauty messaging drives the growth. Protein powders are popular with women and have been promoted as tools for weight management and skin health. Livestream shopping and influencer campaigns sell a lifestyle as much as a product.
In India, the conversation is still emerging. A large percentage of the population remains protein deficient, but a growing middle class is engaging with protein as a marker of wellbeing. Dairy brands like Amul have launched fortified lassi and ice cream, positioning protein as both nutritious and desirable.
Across these regions, protein is rising in relevance. But few markets have made it as ordinary as the UK. Here, it is not aspirational or remedial. It is part of the meal deal, the snack shelf, and the weekday routine. It does not announce itself. It just fits.
The Rise of a Rotational Approach to Protein
Protein may be having its moment, but British shoppers are not choosing sides. The surge in high-protein eating has not sparked a divide between meat and plants. Instead, people are mixing both, often within the same day, and sometimes the same meal.
Part of the shift is pragmatic. Meat remains central to most diets, but plant-based options have gained ground as a way to lighten meals without losing satisfaction. The UK leads Europe in plant-protein innovation, accounting for roughly 18 percent of all new product launches. Supermarket shelves now carry lentil-based pasta, oat-protein shakes, vegan protein bars, and meat-free versions of familiar British dishes.
This is not happening because the nation has gone vegetarian. Most consumers still identify as omnivores or flexitarians. What has changed is the desire for variety and balance. A plant-based lunch does not preclude roast chicken at dinner. It simply reflects a flexible approach to food, guided by mood, values, or convenience.
Protein branding speaks to this shift. On one shelf, whey-based shakes and jerky target muscle and recovery. A few paces away, pea-protein bars promise calm, clarity, and clean ingredients. Both are selling, often to the same household. In The Telegraph’s round-up of the year’s best protein bars, vegan and dairy-based options sit side by side, not as rivals but as parallel answers to different needs.
Taste, convenience, and credibility matter more than protein source. Shoppers want it to work, but they also want it to feel right—nutritionally, culturally, and ethically. The success of the category depends less on what it is made from and more on how well it fits into daily life.
In Britain, this is not about replacement. It is about rotation. And that, more than anything, explains why protein has found a place across such a wide swathe of the population.
What the Protein Economy Means for the Future
Protein may be having its moment, but British shoppers are not choosing sides. The rise of high-protein eating has not triggered a divide between meat and plants. Instead, people are blending both, often within the same day, and sometimes the same meal.
Part of this shift is practical. Meat remains a staple, but plant-based options have gained ground as a way to lighten meals without sacrificing taste. The UK leads Europe in plant-protein innovation, responsible for around 18 percent of all new launches. Supermarkets now stock lentil-based pasta, oat-protein shakes, vegan protein bars from brands like Huel and Tribe, and meat-free versions of familiar dishes.
This is not happening because the country has gone vegetarian. Most consumers still identify as omnivores or flexitarians. What has changed is the desire for variety and balance. A plant-based lunch does not mean skipping chicken at dinner. It simply reflects a flexible, responsive way of eating.
Protein branding follows suit. On one aisle, whey-based shakes and jerky from brands like UFIT and Jack Link’s are positioned for strength and recovery. Nearby, pea-protein bars and oat-based products promise calm, energy, and simplicity. Both types sell, often to the same person.
Taste, convenience, and credibility matter more than the source. Consumers want protein that works, but they also want it to align with their habits, values, and sense of self. Success in this category depends not on whether the protein is animal or plant, but on how well it fits into daily life.
In the UK, this is not about replacement. It is about rotation. And that, more than anything, explains why protein has broad appeal across generations, income brackets, and lifestyles.
Looking to understand the next wave of protein consumers? At Kadence International, we help brands uncover what drives demand, from satiety to sustainability, and how to connect with evolving needs through the right formats, flavors, and messaging. Whether you’re refining recipes, developing new product lines, or targeting new segments, our research gives you the evidence to act confidently. Get in touch to see how we can support your next move.
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Consumer sentiment in the US took a sharp downturn in the first quarter of 2025, signaling growing anxiety about the economy as inflation fears and geopolitical tensions weigh heavily on households.
The University of Michigan’s consumer-sentiment index dropped to 50.8 in April, down from 57 in March, marking the lowest since June 2022. Inflation expectations surged to a 44-year high of 6.7%, deepening concerns about a potential recession. As fears of stagnant economic growth and rising costs persist, US households are not only deferring big-ticket purchases but are also shifting their spending habits. A 2024 survey by McKinsey found that 57% of consumers plan to postpone purchases of cars, electronics, and home appliances due to economic uncertainty. This behavior reflects a broader shift in consumer priorities, where many opt to save for security rather than indulge in discretionary purchases.
In addition, more consumers are actively reconsidering their brand choices. According to Ipsos, one in four Americans have boycotted a brand in the past year over political or ethical reasons, signaling a more value-driven approach to spending. This trend underscores a more selective approach, with households prioritizing purchases that align with personal values and long-term needs.
The Shift in Spending Behavior Globally
Globally, households are tightening their belts in response to growing financial uncertainty. Consumer confidence has dropped significantly in the US and Europe, as evidenced by rising savings rates. In the US, savings deposits increased by 5.4% in 2024, according to major US banks, while credit card usage declined. Meanwhile, Europe’s savings rate surged to 13.5% in Q4 2024, up from 10.7% in 2023, indicating that consumers are prioritizing savings over spending.
Retail sectors are feeling the impact of this shift. High-ticket purchases, such as luxury goods and cars, are down across key markets as consumers focus on essentials and future security. Reports from the European Central Bank show a marked decline in discretionary spending, echoing similar trends in the US.
While this cautious approach stems from immediate financial strain and long-term economic uncertainty, the shift is expected to shape the global economy in the coming months. Companies that can adapt – offering products aligned with consumer values, health, and sustainability – will be well-positioned to thrive in this evolving market.
Case Study: Frasers Group’s Strategic Store Closures Amid Economic Uncertainty
Image credit: X
Background: Frasers Group, a major UK retailer owning brands like Sports Direct and House of Fraser, has faced challenges due to declining consumer confidence and increased operational costs. In response, the company has closed several stores, including its flagship, House of Fraser in Bath, which had been operating for over 200 years.
Actions Taken: Frasers Group has been consolidating its physical retail presence, focusing on high-performing locations and expanding its online offerings. The company has also been investing in its luxury segment, with CEO Michael Murray expressing confidence in a rebound in demand for premium goods.
Outcome: While facing short-term challenges, Frasers Group aims to strengthen its market position by streamlining operations and capitalizing on the anticipated recovery in luxury retail.
The Impact on Financial Institutions and Retailers
As consumer behavior shifts toward savings and caution, financial institutions and retailers feel the effects. Banks have reported an uptick in deposits, while credit card usage has decreased, signaling a change in how consumers manage their finances in uncertain times.
In the US, savings rates have steadily increased over recent years as consumers prioritize financial security. The Federal Reserve’s 2024 Financial Stability Report shows that household savings rates have remained elevated, with a marked preference for more liquid assets. This shift in consumer behavior is attributed to ongoing economic uncertainties and the rising cost of living. Meanwhile, credit card debt, though still growing, has been growing at a slower pace compared to the previous year, with the Federal Reserve noting in its 2024 Report on Household Debt and Credit that credit card balances increased by 6.4% in 2023, slower than previous years’ growth. This suggests consumers are becoming more cautious with discretionary spending, opting to save more and use credit less.
Retailers are adjusting to these changing dynamics. For many brands, especially those in luxury and non-essential goods markets, the slowdown in spending has forced a reevaluation of strategies. High-end brands, which have long relied on the discretionary spending of affluent consumers, are facing challenges as more shoppers scale back on big-ticket purchases.
On the other hand, retailers in the wellness, health, and essential goods sectors benefit from this shift. A January 2024 McKinsey & Company report highlights that 56% of Gen Z consumers in the US consider fitness and wellness a “very high priority,” reflecting a continued commitment to spending on health-related products and services. McKinsey estimates that the global wellness market, valued at over $1.8 trillion, continues to grow at 5-10% annually, with significant demand for wellness products in emerging markets.
For financial institutions, the challenge lies in balancing the growing demand for savings accounts and low-risk investments with the need to provide consumer credit options. As fewer people rely on credit cards, many banks are exploring alternative forms of credit, such as buy now, pay later (BNPL) services, which allow consumers to make purchases without accumulating high-interest debt. While BNPL services have gained popularity, there are concerns about their long-term sustainability and the potential for increased consumer debt.
Ultimately, the growing trend toward saving and cautious spending drives significant shifts in the financial services and retail sectors. Companies that can adapt to these changes – offering value, flexibility, and products aligned with consumers’ evolving needs – will be well-positioned to thrive in the coming months.
How Brands are Adapting Strategies in Response to Consumer Behavior Shifts
In response to the evolving consumer market, companies are implementing various strategies to align with changing preferences and economic conditions:
Enhanced Digital Engagement: Retailers use digital platforms to offer personalized shopping experiences. This includes leveraging data analytics to understand consumer behavior and tailoring marketing efforts accordingly.
Flexible Pricing and Promotions: Companies are introducing flexible pricing models and targeted promotions to address price sensitivity. This approach aims to maintain customer loyalty while accommodating budget-conscious consumers.
Product Innovation and Diversification: Brands diversify their offerings to meet consumers’ evolving demands. This includes introducing new product lines that align with current trends, such as wellness-focused or sustainable products.
The Road Ahead: Implications for Economic Growth
The trend toward saving and cautious spending presents a complex economic landscape. While rising savings rates provide financial security for households, the slowdown in consumer spending could stall short-term economic growth. In Q1 2024, real personal consumption expenditures (PCE) grew just 1.3%, down sharply from 3.4% in Q4 2023. This slowdown reflects persistent inflationary pressures.
As discretionary spending contracts, sectors dependent on non-essential purchases, such as luxury goods and travel, face significant challenges. Bain & Company reports that global luxury market growth slowed to 3% in 2024, a stark decline from double-digit growth in previous years.
However, wellness, health products, and essential goods continue to see strong demand, driven by consumer interest in well-being and sustainability.
As consumer caution impacts overall economic activity, particularly in markets reliant on consumption-driven growth, policymakers and brands must adapt. Encouraging spending on wellness and essential goods, while promoting savings, could help stabilize growth. Companies that strategically align with these consumer priorities—through innovation, targeted marketing, and flexible pricing – will be better positioned to thrive despite economic uncertainty.
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Cash is disappearing from daily life across Southeast Asia. In 2019, nearly half of all transactions in Asia were made in cash. By 2027, that figure is expected to fall to just 14 percent, according to the Bank for International Settlements. Mobile wallets—once a convenience—are now overtaking physical currency as the region’s default mode of payment.
This isn’t just a shift in how people pay. It’s a full-blown rewrite of Southeast Asia’s consumer economy. From Bangkok to Manila, behavior, access, and mobility are being shaped by QR codes, app-driven incentives, and an ecosystem of competing fintech platforms racing to own the checkout moment.
The scale of adoption is staggering. In the Philippines, over 90 million people—around 80 percent of the population—use GCash or Maya, according to Bangko Sentral ng Pilipinas. In Indonesia, QRIS transactions surged to 2.7 billion in 2024, up 66 percent from the year prior, based on data from Bank Indonesia.
Thailand logged more than 16 billion PromptPay transactions in 2023, cementing it as the country’s most common payment method. In Singapore, the SGQR system now supports over 30 digital payment schemes, allowing users to scan a single code and choose their preferred app—no cash, no card, no friction.
Unlike China and India, where single players dominate, Southeast Asia is shaping a multi-platform economy. Consumers aren’t just going digital; they’re actively choosing between wallets based on rewards, speed, and the ecosystem of services attached to each app.
The Regional Play
A landmark pact between five ASEAN countries is turning mobile payments into a regional system. Indonesia, Malaysia, Singapore, Thailand, and the Philippines have linked their QR code schemes, enabling cross-border wallet use. A Filipino tourist in Bangkok can pay with GCash. A Thai traveler in Singapore can use PromptPay. No currency exchange. No new app. Just scan and go.
This isn’t just symbolic cooperation. It’s a practical leap toward regional commerce at digital speed. Consumers already expect to scan and pay anywhere. Now, the infrastructure is catching up.
More than 100 million tourists visited ASEAN countries in 2024. Many of them already live cashless at home—and now expect the same abroad. For small businesses, cross-border payments mean a wider market without new infrastructure. A QR sticker and a smartphone are all it takes.
Policymakers see this as just the beginning. Cross-border wallet use could soon expand to remittances, regional e-commerce, and subscription billing. Southeast Asia is quietly building the infrastructure to support a truly interoperable digital economy.
Platform Power and Wallet Wars
Beneath all this infrastructure is a more urgent contest—one for daily dominance. Wallets are no longer just payment tools. They are retail ecosystems, vying for attention, behavior, and loyalty.
In Indonesia, ShopeePay, OVO, and Dana are locked in a three-way race, each tying payments to e-commerce, food delivery, and retail perks. In the Philippines, GCash leads with over 90 million users, while Maya carves out a younger audience through crypto, banking, and cashback. GrabPay holds ground in Singapore and Malaysia by weaving payments into transport and everyday services.
These wallets don’t just process payments. They offer credit, savings, loyalty points, insurance, and instant promotions. Consumers now choose where to shop based on who gives the better deal—not who’s closest or cheapest.
Brands are adapting fast. Retailers are building in-wallet offers and flash deals to stay top of mind. Banks are co-branding products to remain visible inside apps. In this economy, platform presence can matter more than price point.
Wallet ecosystems aren’t just changing how people pay—they’re changing how people choose. As competition heats up, the most powerful wallets are becoming retail platforms in their own right, collapsing the gap between promotion and purchase.
How Brands Are Winning in the Wallet Economy
Jollibee x GCash: Scaling Speed and Spend with QR Exclusives
Jollibee has turned mobile wallets into more than just payment tools. In early 2024, the Filipino fast-food giant piloted QR-only express counters in busy Metro Manila stores—accepting GCash exclusively for walk-up orders.
The results were immediate. Checkout times fell by 30 percent on average, with lunchtime throughput increasing by nearly 20 percent in the busiest branches. But the real advantage was behavioral. GCash-linked promotions—including “buy one, get one” bundles for specific meal sets—drove higher ticket sizes and repeat visits. Jollibee reported a 12 percent lift in average order value among wallet users compared to traditional cash or card buyers during the campaign window.
Beyond volume, the partnership gave Jollibee something more valuable: clear usage patterns. It tracked conversion by time of day, adjusted promotions instantly, and mapped how wallet users shop differently. The model offers lessons beyond fast food. QSR chains across the region are now experimenting with QR-linked incentives to boost order volume and loyalty.
Unilever Vietnam x ZaloPay: Closing the Loop on Sampling and Segmentation
Unilever Vietnam used mobile wallets for more than sales—it used them to test, learn, and refine. In a 2024 pilot with ZaloPay, the brand launched a digital sampling campaign for its new “urban essentials” personal care line targeting Gen Z professionals.
Consumers claimed samples directly through the ZaloPay app, but redemption came with a short quiz and opt-in to Unilever’s official account. In just three weeks, over 150,000 users participated. Of those, 17 percent converted to purchase. More importantly, the campaign delivered real data: which products got tried, how long users waited, and who came back to buy.
Traditional sampling often delivers little feedback and a lot of waste. This campaign flipped the script. For FMCG brands, it’s a path forward—less sampling waste, more segment-level insight, and faster market-readiness. It wasn’t just about targeting—it was about validating what a new segment actually wanted.
Wallets as Retail Real Estate
In Southeast Asia’s evolving consumer economy, mobile wallets are becoming the new shelf. They are visible, contextual, and central to purchase decisions. No longer just the endpoint, they’re shaping what happens before the sale is even made.
Wallets are now where discovery happens. Real-time promos, loyalty rewards, and flash deals make QR apps as influential as in-store signage. In Indonesia, ShopeePay’s “Deals Near Me” surfaces location-based offers that nudge shoppers toward one convenience store—or one coffee shop—over another.
UX Design is now strategy. What shows up on the payment screen—bundled meals, upsells, time-limited offers—can shift behavior in seconds. In a recent survey, 62 percent of Southeast Asian wallet users said an in-app offer had changed their purchase decision in the past three months.
Brands are responding with wallet-native campaigns. In the Philippines, GCash partners with major retailers to launch app-exclusive bundles. In Vietnam, FMCG players are testing ZaloPay-only SKUs to gauge price sensitivity among mobile-first Gen Z consumers.
For marketers, this changes the playbook. Campaigns now live inside the moment—built into the wallet, not broadcast through media. And just like endcaps in a store, wallet placement is scarce, valuable, and judged by performance.
How Digital Wallets Are Closing the Financial Gap
While wallets compete for urban customers, they also unlock access for millions previously excluded from formal finance. The World Bank estimates that over 40 percent of adults in the Philippines, Indonesia, and Vietnam remain unbanked. Mobile wallets are changing that.
Street vendors, farmers, and gig workers are now building financial histories with every tap. In Indonesia, over 29 million small businesses use QRIS to accept payments. In the Philippines, GCash delivers welfare payouts, subsidies, and remittances, often to people who’ve never walked into a bank.
This shift is producing an entirely new class of consumers. They’re connected but overlooked—digitally fluent but invisible to most traditional marketing models. For researchers, the challenge now is to understand how financial access rewires habits and reshapes trust.
Wallet adoption may be booming across the region, but no two markets look alike. Some are dominated by one or two players. Others support overlapping apps, bank wallets, and homegrown fintechs. The variation speaks to different consumer needs and regulatory choices.
Comparing Wallet Ecosystems Across ASEAN
Country
Dominant Wallets
Notable Features
Estimated Adoption
Indonesia
Dana, OVO, ShopeePay
QRIS compliance, local cashback, offline ubiquity
70–75%
Philippines
GCash, Maya
Microloans, utility payments, crypto access
80–85%
Thailand
PromptPay, TrueMoney
Linked to national ID and digital welfare payouts
90%+
Singapore
GrabPay, PayNow, DBS PayLah
High QR interoperability, cross-border ready
95%+
Malaysia
Touch ‘n Go, Boost
Toll road integration, state-backed incentives
80%+
Sources: Central bank data, World Bank Global Findex (2024), platform reporting
What This Signals
The wallet boom in Southeast Asia is not a trend—it’s a system reset. It’s changing how value flows, how behavior is tracked, and who gets included.
Consumers are gaining fast access to finance, but only through platforms that decide the terms. Governments see more. Banks lose ground. Retailers shift strategy. But the risks are real—ecosystem lock-in, data monopolies, and a widening gap for the disconnected.
Southeast Asia is building the prototype for a fully digital consumer economy. What works here won’t stay here. Markets with similar demographics will follow—some already are.
As wallets become embedded in daily life, they generate a stream of behavioral data that most traditional research methods cannot easily replicate. For brands and researchers alike, this shift is not just an operational upgrade—it is a structural advantage.
Who Gets Left Behind in a Wallet-Led Economy
Not everyone is tapping phones or using QR codes. Across Southeast Asia, millions still rely on cash, not by choice, but by necessity. As digital systems race ahead, they are leaving some consumers behind.
The elderly, rural communities, and informal workers without smartphones or stable internet still make up a large share of the population in countries like Indonesia, the Philippines, and Vietnam. For many, wallets remain either out of reach or out of trust.
Even in cities, resistance is growing. Consumers worry about data tracking, fraud, and hidden fees. In Thailand, a watchdog recently warned about wallet-based lenders targeting young users with high-interest loans disguised as pay-later perks.
Cash still offers something digital doesn’t—trust. In many traditional communities, handing over bills is easier, more familiar, and more accepted. As merchants go digital, cash users risk being pushed out of the transaction altogether.
Governments face a balancing act: modernize finance without deepening exclusion. Incentives for wallet use should not come at the cost of cash access, especially in rural or unbanked areas. For brands, the solution lies in hybrid systems that serve both digital adopters and cash loyalists.
The danger of a wallet-led economy is not that it moves too fast, but that it forgets who isn’t coming along. Progress will be measured not just in QR checkouts, but in how well the new economy includes the voices, habits, and limitations of every consumer.
A View from the Future Consumer
Southeast Asia is not just adopting digital finance—it’s rewriting the rules. While Europe debates regulation and the U.S. sticks to cards, this region is designing a payment system that is mobile, fast, and increasingly borderless. Consumers aren’t waiting for banks to evolve. They’re building the next model themselves.
For brands, the implications are clear. The old playbook—national campaigns, static rewards, and linear funnels—no longer works. Today’s consumers jump across apps, currencies, and contexts without hesitation. The winners will meet them there, designing not for convenience, but for relevance at the point of payment. Pricing isn’t set in advance. It’s surfaced in the moment—shaped by wallet prompts, bundled rewards, or time-limited offers.
For researchers, this landscape offers something rare: behavior in real time. Every wallet tap leaves a trackable decision—what was bought, where, when, and how the user was nudged. But knowing what happened is not the same as knowing why. That’s where research matters most. Ethnography, cultural fluency, and journey mapping are the tools that explain what dashboards alone can’t.
Research must move faster, go deeper, and sit closer to where decisions are made—in wallet ecosystems, in platform partnerships, and in the fast-evolving lives of Southeast Asian consumers.
Some brands are already blending behavior data with on-the-ground insight. In Vietnam, a beverage company spotted rural sales spikes through wallet data. Field interviews revealed the link: payday loans disbursed on the same day each month. That single insight reshaped everything—from promo timing to pack size.
The next breakthroughs in understanding consumers won’t come from dashboards alone. They’ll come from pairing live data with lived experience—decoding what people do and why they do it. The future of research isn’t digital by default. It’s embedded, agile, and built inside the systems where decisions happen.
Consumer power is shifting from income to intuition—from how much people spend to how fluently they move through the ecosystems around them. Southeast Asia isn’t adapting. It’s leading.
Kadence International helps brands decode evolving consumer behavior across Asia and beyond. To understand what drives tomorrow’s decisions, talk to our team.
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Thailand is embarking on a bold economic initiative that intertwines fiscal stimulus with digital innovation. The government has launched a digital wallet scheme, providing eligible citizens a one-time payment of ฿10,000 (approximately USD 275). This initiative aims to invigorate local economies and accelerate the nation’s transition to a cashless society.
The program is being rolled out in phases, with the third phase targeting 2.7 million young individuals aged 16 to 20. These recipients will receive the funds through the Thang Rath app, a government-developed platform to facilitate digital transactions. The funds are intended for use within local communities, with certain restrictions to ensure the money stimulates domestic consumption.
Thailand’s digital wallet initiative aims to stimulate economic activity and promote digital transactions. The program’s first phase targeted 50 million citizens aged 16 and above, each receiving ฿10,000 (approximately USD 275) through a digital wallet. This approach is designed to encourage spending within local economies and accelerate the country’s shift towards a cashless society.
Thailand’s digital wallet program is a significant case study in integrating fiscal policy with digital technology. By distributing funds through digital means, the government stimulates the economy and encourages the adoption of digital payment systems, potentially influencing consumer habits and financial behaviors.
From Handout to Handset
This is money designed to move markets. Thailand’s ฿10,000 (USD 275) digital wallet credit is distributed exclusively via mobile apps. It has clear boundaries: it must be spent within a designated time period, in specific geographic areas, and only through participating merchants equipped to handle digital payments. The delivery mechanism is the government-backed Thang Rat app, which uses national ID verification to register users and link them to eligible purchases.
The program injects short-term liquidity while strategically embedding digital transactions into routine life. Access requires digital fluency – scanning codes, verifying identity, and transacting within the PromptPay ecosystem. The interface has been streamlined for ease, but the implications are layered. Thailand is accelerating the normalization of app-mediated spending across demographics and regions.
Financial institutions and major digital wallet providers are working behind the scenes to integrate merchant systems and stabilize the transaction flow to ensure rapid uptake. This isn’t limited to major retailers. Many small vendors, from noodle stalls to corner pharmacies, are registering to accept payments. The digital wallet scheme demands not just consumer participation, but full-scale merchant onboarding into a cashless economy.
This is a behavioral leap for millions of Thais who still rely heavily on cash. But for younger recipients, the transition feels intuitive. Many live on their smartphones, accustomed to social commerce, e-wallet promos, and gamified savings. What the government is effectively doing is placing a financial incentive on behavior they’re already inclined to adopt.
In this way, the program is a behavioral nudge packaged as an economic policy. It’s teaching people how to spend in a new way, and rewarding them for doing it quickly.
A Timed Windfall for Local Commerce
Businesses across Thailand are preparing for increased consumer spending driven by the digital wallet program. The requirement for funds to be used within a specific period encourages immediate spending, prompting merchants to adjust their pricing strategies and promotional activities accordingly.
Food stalls are printing QR codes, retailers are adjusting shift schedules, salon owners, café managers, and shopfront vendors are updating signage to remind passersby that e-wallets are accepted here. The shift is visible and urgent in provinces where cash has long dominated daily transactions.
In Bangkok’s inner districts, chains and convenience stores are doubling down on digital promotions. Buy-one-get-one offers, bundled discounts, and mobile flash sales are being calibrated to coincide with the disbursement dates. The psychology behind it is clear: create immediacy, trigger impulse purchases, and keep consumers in-app and on-premise.
Meanwhile, mom-and-pop stores in Chiang Mai, Khon Kaen, and Phuket are entering the formal financial ecosystem for the first time. Participation in the program requires digital onboarding. The upside: access to new customers flush with government-backed spending power. The risk: failing to move quickly could mean missing the wave altogether.
Consumer behavior is expected to be fluid but focused. Analysts anticipate that essentials and small indulgences, like meals, home goods, and personal care, will dominate early spending. But discretionary categories, especially fashion and electronics, could also benefit, particularly if retailers tailor offerings to fit within the ฿10,000 bracket.
This is a demand surge programmed into the system. Every player, from a street vendor selling grilled pork skewers to a regional supermarket chain, is being pulled into a countdown economy, where readiness and responsiveness could decide who gains and who gets left behind.
Digital Payments Go Mainstream in Thailand
The timing of Thailand’s digital wallet rollout is no accident. With PromptPay already embedded into daily life through peer-to-peer transfers and utility payments, the infrastructure for mass adoption was quietly laid years ago. What’s happening now is a sudden acceleration, where digital payments are no longer a convenience, but a condition for participation.
The mechanics are simple: the digital credit can only be spent via QR code transactions within the Thang Rat app or partner platforms. While younger, tech-savvy consumers may find the digital wallet system intuitive, older demographics and small businesses in semi-urban or rural areas face challenges in adopting this technology. Efforts are underway to support and educate these groups to ensure inclusive participation in the program.
This forced familiarity is a powerful lever. In previous government subsidies, such as the “Half-Half” co-payment scheme, uptake of digital payments spiked, but often reverted once the incentive expired. The difference this time lies in scale, urgency, and exclusivity. With no offline alternative, digital behavior becomes the default.
Retailers, both large and small, are expanding their digital loyalty ecosystems, leveraging infrastructure that’s already in place. Meanwhile, independent merchants are being trained through government-led and private sector initiatives, many of whom accept mobile payments alongside cash for the first time.
There are structural benefits too. Digital transactions bring transparency, reduce leakage, and pull more activity into the taxable economy. For financial institutions and fintech platforms, it’s a rare moment to onboard users en masse, expand digital credit histories, and introduce adjacent services like microloans and savings tools. What was once novel, QR payments and app-exclusive deals, is now baseline behavior. Habits form, preferences evolve, and expectations reset.
For Thailand, this isn’t just about going cashless. It’s about normalizing a new rhythm of consumption, one mediated by apps, verified by biometrics, and reinforced through constant interface with digital payment systems.
Programmed Consumption and the Rise of Directed Demand
Thailand’s digital wallet program doesn’t simply encourage spending; it shapes it. By placing parameters on how, where, and when the ฿10,000 can be used, the government has introduced a form of economic steering rarely seen at this scale. Unlike traditional cash stimulus, which relies on recipients to allocate funds freely, this initiative narrows consumer choice and concentrates activity into predefined lanes.
The logic is deliberate. Restricting usage to local businesses prevents capital leakage to international e-commerce platforms. Limiting the timeframe creates urgency. Requiring digital payment methods brings consumers and merchants into closer contact with formal financial systems. By specifying where and how the digital wallet funds can be used, the government effectively directs consumer spending towards specific sectors and regions, aiming to boost local economies and encourage digital payment systems.
This creates a behavioral moment for consumers. Faced with a ticking clock and a limited range of vendors, they are more likely to make purchase decisions that are reactive, needs-based, or convenience-driven. This doesn’t eliminate agency, but it does channel it. The consumer becomes a participant in a curated economic script.
Retailers are adapting quickly. Some design promotions that align with the wallet’s value cap, offering bundles or tiered discounts pegged just under ฿10,000. Others are integrating in-app incentives, such as exclusive digital deals or gamified rewards. It’s not a one-off campaign. It’s a moment for brands to convert compliance into long-term connection.
There are also downstream effects. Data trails emerge as millions engage in digital-first transactions over a condensed period. Purchase preferences, time-of-day activity, and location-based behavior are logged in real time. This creates a trove of behavioral insights for tech partners and financial services firms, potentially reshaping how credit scoring, product development, and localized marketing unfold in the months ahead.
Similar experiments have been attempted globally, particularly in conditional cash transfers. But Thailand’s version is uniquely digitized, centralized, and transactional. It offers a test case in how programmable money can accelerate economic recovery and behavioral adaptation.
Understanding how different consumer groups respond to this stimulus is essential for long-term strategy. Young adults, already comfortable with mobile interfaces, adapt rapidly, but older consumers may show resistance or partial adoption. Rural users face infrastructure gaps that could slow uptake or reshape spending patterns around trusted local merchants. Urban Gen Zs may spend impulsively and favor experiential categories, while Gen X participants lean toward utility-driven purchases. These behavioral distinctions matter for segmentation, pricing, and product development, particularly as brands look to refine future targeting based on wallet usage data.
New Norms in Marketing and Merchandising
The digital wallet program is forcing businesses in Thailand to rethink the fundamentals of how they market, merchandise, and manage demand. Digital credit may be temporary, but behavioral ripple effects influence how brands present themselves online and in-store.
At the heart of this transformation is timing. With a strict window in which the funds must be used, consumer attention is compressed. That changes the marketing calculus. There’s no luxury of a long lead funnel or sustained brand storytelling. Campaigns must hit fast and deliver clear value. QR codes aren’t just payment methods; they’re now marketing triggers, embedded in posters, flyers, and social posts that tie spending to immediacy.
Product curation has also shifted. Brands are building product bundles priced just below the ฿10,000 threshold, creating psychological cues for consumers to spend the full amount. Some offer flash deals that reset daily, while others push limited-time bundles through retailer apps or LINE commerce channels. These are not just promotions but engineered conversions calibrated to align with the digital wallet framework.
Inventory planning, too, has become more dynamic. Mid-sized retailers and national chains are using digital dashboards to track wallet-driven demand in real time, enabling rapid stock reallocation. Categories like food delivery, personal electronics, cosmetics, and small household appliances are spiking, especially among younger consumers already fluent in app-centered shopping habits.
The new challenge is coherence for businesses operating in both physical and digital spaces. Messaging must be synchronized across touchpoints, inventory systems must be tightly integrated, and customer service needs to anticipate a wave of first-time digital shoppers. This isn’t just a surge; it’s a behavioral onramp for consumers who have never interacted with a loyalty program or browsed a brand’s offerings through an app.
Loyalty itself is being redefined. With state-funded money in play, consumer allegiance becomes fluid. People are less concerned with brand heritage and more focused on price, accessibility, and in-app rewards. The brands that win in this window may not be the ones with the longest history, but the ones that adapt fastest to this new consumption model.
A Testbed for Market Entry and Innovation
Thailand’s digital wallet stimulus is becoming a live laboratory for market entrants and tech innovators. The initiative presents a rare opportunity to observe real-time consumer responses at scale, under state-structured conditions, by creating a compressed environment of digitally enabled, time-bound consumption.
This moment offers more than a demand bump for global brands and startups exploring Southeast Asia. It provides behavioral proof points. Which price points resonate with a digitally empowered consumer base? How do young adults prioritize purchases with a fixed wallet balance and expiration date? What formats – QR discounts, app-based coupons, social-first promotions – translate into immediate action?
For global brands operating in Thailand, the closed-loop nature of the wallet system introduces new constraints. Transactions are restricted to pre-approved domestic merchants using Thai QR payment infrastructure, sidelining international platforms and foreign e-commerce flows. This forces global players to rethink their localization strategy, not just in language or pricing but also in payment compatibility, compliance with local fintech protocols, and partnerships with Thai digital ecosystems. Without local enablement, access to wallet-driven demand is effectively off-limits.
These are questions that typical market entry research can only approximate. But in Thailand right now, the data is unfolding in real time.
Retail tech platforms are already responding. Point-of-sale solutions are being retrofitted to accommodate PromptPay and Thang Rat app syncing. Loyalty software providers are rolling out integrations tailored for the short-term stimulus. Meanwhile, financial institutions are watching new patterns emerge around credit top-ups, digital wallet storage, and tiered savings, insights that could inform broader regional product development.
For brands considering market entry, the digital wallet rollout reduces uncertainty. It forces clarity around key operational requirements: payment infrastructure compatibility, smartphone-optimized UX design, local partnership strategy, and promotional agility. Previously theoretical risks like payment fragmentation and uneven digital engagement are unfolding in real time, offering rare visibility.
There is also a broader story unfolding around interoperability. Local players that capture wallet-based spending may quickly gain bargaining power in distribution deals or tech partnerships. New winners could emerge, not just based on product strength but also on their ability to move quickly, adapt nimbly, and serve a new type of Thai consumer who expects digital fluency as the norm.
In this way, the program becomes more than a fiscal initiative. It is a proving ground for what works in digitally conditioned economies, and a barometer for how brands, especially those eyeing ASEAN growth, should rethink their playbooks.
Beyond the Wallet
The digital wallet program is temporary, but the behavioral architecture it introduces is anything but. Thailand’s push toward app-based, conditional cash disbursement may be a one-off stimulus. Still, it functions as a prototype that could shape the long-term relationship between consumers, digital ecosystems, and the state.
At a policy level, it hints at future mechanisms for targeted fiscal relief. With a national app tied to ID verification, merchant QR capability, and geofenced rails, Thailand has the infrastructure for agile, targeted interventions. Imagine fuel subsidies issued directly to drivers’ wallets, or education grants tied to purchases at approved vendors. Thailand is effectively building the scaffolding for programmable transfers that move beyond welfare and into consumer engineering.
For brands, this shifts the horizon. Suppose public spending can be deployed with this degree of precision. In that case, market strategy must now factor in state influence – not just regulation or taxation, but direct participation in how demand is created, distributed, and spent.
It also raises questions about data sovereignty and consumer privacy. Every transaction under this program is logged, time-stamped, and geolocated. While much of the data is anonymized or aggregated, tracking purchasing behaviors at this scale gives policymakers and platforms a new level of visibility and responsibility. Transparency, ethical use, and public trust will become defining themes as similar programs proliferate.
For consumers, the wallet scheme introduces a new normal, not just in how they pay but also in how they engage with money. Spending has become traceable and digitally shaped. This could foster a generation of Thais who expect convenience, traceability, and flexibility from every financial interaction—expectations that will extend far beyond this program.
In the broader Southeast Asian context, Thailand’s experiment is being watched. Governments from Vietnam to Malaysia are exploring their own pathways toward digital inclusion and financial modernization. If Thailand’s model successfully drives lasting consumer habits, similar regional models could be accelerated.
What remains unclear is whether these behaviors will stick. Will consumers continue favoring QR payments, or will familiar cash habits resurface? Much will depend on how embedded digital convenience becomes in daily transactions and whether follow-up incentives, merchant retention, and habit reinforcement mechanisms remain. This presents a live opportunity for market researchers to track post-stimulus drop-offs, digital payment stickiness, and evolving consumer loyalty under real-world conditions.
If replicated across ASEAN, this state-led digital payment model could redefine how governments stimulate economies and how brands prepare for demand. Thailand’s model offers a scalable blueprint in markets like Indonesia, Vietnam, and the Philippines, where digital infrastructure is expanding but financial inclusion remains uneven.
There’s also a broader possibility: what begins as a one-off wallet scheme could evolve into a prototype for Universal Basic Income trials delivered via fintech. Conditional, trackable, and segmentable, such frameworks would allow governments to deploy aid, test responses, tweak incentives, and monitor outcomes in real time.
Thailand’s digital wallet initiative illustrates the growing interplay between government policy and consumer behavior. For businesses, this underscores the importance of aligning with digital platforms and payment systems increasingly influenced by public sector strategies.
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Jollibee is rewriting the rules of global fast food.
After a strong financial year, the Filipino fast-food giant is entering 2025 with around USD 364 million earmarked to open as many as 800 new stores worldwide. That would push Jollibee’s total store count past 10,000, a staggering figure for a homegrown chain once dismissed as quirky outside Asia. But this is no vanity expansion. The brand’s global push reflects a more profound shift at home, where demand for quick, affordable meals surges, defying inflation, reshaping food culture, and fueling a new era of fast-food dominance in the Philippines.
This isn’t just about chicken and burgers. It’s about how one brand’s rise is capturing the cravings of an entire nation.
Fast food emerged as the most popular choice for dining out, particularly among chicken and burger lovers. Quick-service establishments accounted for over half of the industry’s total revenue, generating over USD 7 billion in 2023. Since then, the segment has been dominated by homegrown players, led by Jollibee Foods Corporation, whose portfolio includes Mang Inasal, Greenwich, and Chowking. McDonald’s remains a distant second, operating under the exclusive franchise of Golden Arches Development Corporation. As demand rises, local chains expand into provincial areas, while international brands continue to enter the market, adding more variety to Filipino tables.
Whether students meet after class, families treat themselves on weekends, or office workers order lunch through an app, the momentum is clear: Filipinos are dining out, ordering in, and doing it more often.
This revival isn’t a return to the past. It’s an acceleration. The pandemic disrupted routines and deepened appreciation for fast, reliable food options. A more mobile, value-conscious consumer emerged who now sees fast food as affordable and dependable.
Demand for fast food stays strong in the Philippines
The latest research indicates that consumer spending on food services remained steady despite elevated inflation rates, with quick-service restaurants showing particular resilience. Budget-friendly combo meals, seasonal promos, and tiered pricing have helped brands stay within reach for everyday customers.
For many, an under-two-dollar value meal is more than just food. It’s an accessible treat, a small reward at the end of a long day. In uncertain times, the routine of fast food offers something dependable.
Global ambition with local roots in the Philippines
Jollibee’s international footprint is a calculated strategy powered by years of steady domestic growth and rising demand from Filipino communities abroad. From Los Angeles to Riyadh, queues outside Jollibee outlets speak to nostalgia and a global appetite for distinctly Filipino offerings.
In 2024, Jollibee Foods Corp opened new stores across North America, the Middle East, and Southeast Asia, adding to its diverse portfolio that includes Smashburger in the U.S., The Coffee Bean & Tea Leaf, and Yonghe King in China. Its global network spans over 30 countries, with stronghold cities like Toronto and Dubai seeing expansion fueled by the diaspora and growing mainstream interest.
But the push outward is rooted in confidence built at home. JFC’s record earnings have created room to double down on international markets, and the brand’s ability to localize, while staying true to its core identity, has become its competitive edge.
Regional QSRs take root beyond Metro Manila
While major players dominate the headlines, a quiet transformation occurs in provincial cities. Homegrown fast-food chains like Mang Inasal (also under JFC) and Potato Corner are seeing rapid expansion in tier-2 and tier-3 areas, where demand is driven by a growing middle class and increased infrastructure investment.
Cities like Iloilo, Cagayan de Oro, and General Santos have become new frontiers for QSR growth. These markets value familiarity, affordability, and local relevance, and regional chains are responding to these preferences with rice-based meals, grilled dishes, and snackable comfort food.
The Department of Trade and Industry (DTI) notes that regional retail hubs posted double-digit growth in food service in 2024, a sign that the fast-food phenomenon is no longer concentrated in major urban centers. For brands, this shift signals the need to build hyper-local strategies, not just nationally but by province, city, and even neighborhood.
Global fast-food chains step up competition in the Philippines’ quick-service market.
Jollibee may dominate the local scene, but it no longer stands alone. International quick-service brands are scaling up in the Philippines, eyeing the same value-driven, convenience-loving consumers.
McDonald’s Philippines, which opened its 700th store in 2024, continues to match Jollibee’s momentum with localized offerings and digital upgrades. Popeyes and Shake Shack are expanding footprints in Metro Manila, while brands like Tim Hortons and Five Guys are testing growth in urban centers. Each new entry promises variety and the pressure to compete.
What’s different now is the intensity. With a young, urban population and rising mobile penetration, the Philippine QSR market has become a battleground for homegrown and global players. Store count is only one metric. The real contest is for relevance: who can adapt, respond, and resonate fastest with local tastes and lifestyles?
Fast Food Menus that speak the local language
Taste is local, and brands are listening. Filipino diners want more than burgers and fries. They expect flavor profiles reflecting regional preferences and seasonal cravings. That’s why spicy chicken, sweet-style spaghetti, and ube-flavored desserts are staples, not novelties, across fast-food menus.
Before launching new items like Spicy Tuna Pie or ube-flavored desserts, Jollibee conducts sensory testing and product trials to gauge appeal across regions. JFC’s 2021 Sustainability Report outlines a quality assurance process that includes sensory evaluations and physicochemical analysis, ensuring every product meets both safety standards and consumer taste expectations.
Jollibee continues to lead with offerings designed around Filipino palates, from its best-selling Burger Steak to newly launched spicy Tuna Pie variants. McDonald’s Philippines has followed suit, bringing back its Twister Fries and McSpicy lines while experimenting with rice-based meals and desserts like the Ube McDip.
This localization trend isn’t limited to Filipino chains. Even global brands are learning to localize faster, rolling out limited-time items that reflect local tastes. Product development has become both a marketing tool and a competitive differentiator, allowing brands to stay top-of-mind in a saturated landscape.
Sustainability now comes standard in fast food chains in the Philippines
Sustainability is no longer a side note—it’s influencing what Filipinos order, how often they return, and which brands earn their trust. Jollibee’s “Joy for Tomorrow” program has moved beyond recycling pledges and into action, including energy-efficient store designs, reduced food waste, and stronger partnerships with local farmers.
Other fast-food players are following suit. Biodegradable packaging, cage-free sourcing, and ingredient transparency are making their way into the mainstream. These shifts speak to a consumer base that wants convenience without compromise. The cost of a meal now includes a calculation of impact, and brands that take that seriously are gaining ground.
The screen is the new QSR storefront.
Ordering food has become a tap-and-go experience. Mobile apps, third-party delivery platforms, and social commerce are no longer add-ons; they’re central to the Filipino consumer journey.
In 2024, Food Industry Asia reported that nearly 60% of quick-service restaurant orders in Philippine cities were placed through digital channels.
Foot traffic has given way to app traffic, with brands competing on flash deals, loyalty rewards, and free delivery to stay top of mind.
Digital payments are now part of everyday life in the Philippines. In 2024, usage among adults aged 15 and up hit 33%, a steep climb from just 3.2% in 2018. The shift mirrors the rise of mobile-first ordering and in-app transactions, especially in fast-paced urban dining.
Jollibee’s mobile ordering platform has expanded its features, allowing personalized recommendations, pre-orders, and seamless integration with payment apps. McDonald’s Philippines, GrabFood, and Foodpanda continue to lead in delivery convenience, but newer players like TikTok Shop have begun to influence food discovery and promo-led conversions.
Fast food is no longer just about what’s on the menu; it’s about how quickly, easily, and enjoyably it can be accessed.
Where Gen Z eats, posts, and connects
For Gen Z in the Philippines, fast food isn’t just a meal; it’s part of the social fabric. Chains like Jollibee and McDonald’s have become informal meeting places, study zones, and TikTok backdrops. With free Wi-Fi, student discounts, and sleek interior revamps, fast-food locations are evolving into lifestyle spaces for a digital-first generation.
Over 70% of Filipinos aged 15–24 visit a fast-food restaurant at least once a week, not only to eat but also to socialize, stream content, or work on school assignments. The ambiance, affordability, and accessibility make these venues a go-to choice, especially in areas with few alternatives.
QSR brands have noticed. Jollibee’s recent store designs incorporate more seating zones, charging stations, and group-friendly configurations. Meanwhile, McDonald’s continues to roll out McCafé-style concepts with a café vibe. Marketing also leans heavily on youth-driven platforms. Jollibee’s TikTok content, for instance, regularly goes viral thanks to campaign hooks that merge pop culture, food hacks, and humor.
This convergence of dining, content creation, and community adds a new layer to how fast food functions in Filipino society. It’s not just about convenience or flavor; it’s about belonging.
Innovation behind the fast-food counter
Fast food has always been about speed, but now it’s also about smarts. Behind the counter, brands adopt AI-driven inventory systems, real-time analytics, and predictive modeling to optimize operations.
On the consumer side, personalization is becoming standard. Delivery apps suggest orders based on time of day, while loyalty platforms trigger tailored promos and gamified incentives. In 2024, over 8 in 10 Filipino consumers ordered fast food through delivery apps, the highest in Asia, making digital innovation a make-or-break factor for staying relevant.
This tech transformation isn’t just about convenience. It’s how brands scale, adapt, and survive in an economy where expectations move faster than supply chains.
A new flavor of identity in Philippine QSRs
Fast food in the Philippines has evolved from an occasional indulgence into a defining thread in everyday life. It reflects shifting routines, modern appetites, and a generation that blends tradition with convenience.
Jollibee’s global rise is not just a business story; it’s a cultural signal. It shows how a local brand, deeply rooted in national identity, can compete on the world stage without losing its soul. At the same time, the growing presence of foreign QSR players and the embrace of digital-first experiences suggest that Filipino consumers are increasingly cosmopolitan in their tastes, but still loyal to brands that understand them.
Jollibee’s QSR expansion isn’t just about chicken. It’s about claiming a cultural and commercial space that reflects where Filipino consumers are headed, and how fast the world is learning to follow.
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Conducting online research in China is unlike anywhere else in the world.
With over 1.1 billion internet users in 2024, China accounts for over a fifth of the global online population. Nearly all of them, over 99%, access the internet via smartphones, making mobile-first behavior not just common but standard.
Researchers won’t find Google, Facebook, or YouTube. The Great Firewall blocks these platforms. Domestic giants like Baidu, WeChat, and Tmall stand in their place, which dominate search, social interaction, and e-commerce across every tier of Chinese society.
China’s digital economy is expanding with both speed and scale. According to the China Academy of Information and Communications Technology, it reached ¥50.2 trillion in 2024, accounting for nearly 40% of the country’s GDP. That growth has produced a tightly regulated, platform-driven ecosystem where almost every transaction and interaction is digitally mediated, and often monitored.
The implications for research professionals and brands entering China are clear: global tools and templates rarely apply. Access, compliance, and engagement strategies must be localized, legally sound, and platform-specific.
Understanding the Market Research Landscape in China
At first glance, China may appear to be a single, unified market. But researchers who’ve worked on the ground know better. The country’s vast geography, regional economic disparities, and fast-evolving digital behavior make it anything but monolithic.
One of the first challenges is the platform disconnect. Western tools and social platforms – standard in global research workflows – are largely inaccessible. Google Surveys, Meta’s ad platform, YouTube analytics, and even SurveyMonkey links can break or be blocked entirely. Instead, insights must be gathered through domestic platforms such as Wenjuanxing for surveys, WeChat for micro-panels and intercepts, or Douyin and Xiaohongshu for digital ethnography.
Understanding consumer behavior within these ecosystems requires fluency in China’s unwritten rules of digital life. These include the importance of influencer-led recommendations, the use of e-wallets and super apps, and the power of social commerce, where shopping is often embedded within live streams or chat threads. Research here doesn’t just measure attitudes or preferences; it often captures behavior in real time.
Then there are the legal and regulatory dynamics. China’s Personal Information Protection Law (PIPL), which came into effect in 2021, mirrors aspects of Europe’s GDPR but with stricter localization mandates. Researchers must store data onshore, obtain clear consent, and ensure complete transparency with respondents. Foreign firms conducting surveys without a local license risk heavy penalties or blocks.
Internet access itself is stratified. While national penetration hit over 76% in 2024, rural provinces and lower-tier cities still lag, especially in terms of speed, access to modern platforms, and digital literacy per CNNIC. A panel that works in Shenzhen might fail in Gansu.
In short, market research in China exists at the intersection of tight state oversight, massive digital adoption, and deeply localized behaviors. Without accounting for these dynamics, even well-funded research efforts can fall short, sometimes without realizing it.
Define Your Research Objectives and Localize Your Strategy
No matter how sophisticated the tools or how generous the budget, market research in China will fail if the objectives aren’t adapted to local realities. This is where many global teams stumble – by applying Western assumptions to an entirely different cultural and regulatory framework.
Consumer segmentation in China can’t rely on income bands or generational labels alone. Social status is fluid, regional identities matter, and values shift across provinces. A tier-2 city in the East may be more digitally mature than a tier-1 city in the interior. Brands that define their target groups too narrowly or generically risk missing how identity and aspiration play out in Chinese daily life.
Consumer behavior also looks different in a tightly surveilled digital space. Chinese consumers are more likely to self-censor, avoid specific topics, or express preferences indirectly. Questions that may seem standard in a US or UK survey about media consumption, personal values, or financial habits can backfire if not rephrased to account for local sensitivities. Cultural fluency matters not just in translation but also in tone, structure, and framing.
Even the method of recruitment can alter the reliability of insights. Research respondents in China tend to give more socially desirable answers, especially in group settings. This is rooted in the concept of “face” (mianzi), a powerful social dynamic that influences behavior in personal and public spheres. Without careful design, your questionnaire might gather politeness rather than truth.
A one-size-fits-all approach to research design is also problematic due to China’s vast geographic and economic divides. What resonates in Shanghai may fall flat in Chongqing, and what succeeds in digital-first Guangdong may underperform in slower-moving provincial markets.
Before any fieldwork begins, market research teams must:
Clarify objectives in the context of China’s regulatory environment
Rework segmentation models to include region, tier classification, and platform usage
Pilot test surveys or interview guides to flag misinterpretations or mistrust
Prepare for multiple iterations: localization is not a one-time edit
The most effective market research in China begins not with a script but with a reset. It discards assumptions and designs from the ground up, aligned to local behaviors, restrictions, and opportunities.
Choose the Right Market Research Methodologies
Choosing the correct market research methodology in China is a matter of access. With international research tools restricted or blocked, researchers must turn to local platforms, re-engineered workflows, and culturally calibrated approaches that work within China’s digital ecosystem.
Quantitative Research: Mobile, Embedded, and Localized
Online surveys remain a cornerstone of quantitative research, but success depends on domestic platforms. Tools like Wenjuanxing and Sojump are popular alternatives to SurveyMonkey and Qualtrics, offering full integration with WeChat, where Chinese consumers already live, shop, and communicate.
Incentives also look different. Instead of email vouchers, respondents are more likely to engage when rewards are offered via WeChat Pay or Alipay, and when surveys are designed for mobile-first navigation, short, vertical, and touch-friendly.
Researchers should also be cautious about using standard Likert scales or Western question phrasing. Translation is rarely enough. Questions like “How strongly do you agree with this statement?” may confuse or alienate respondents unfamiliar with abstract rating formats. Instead, behavioral prompts (“What do you usually do when…?”) often yield more honest responses.
Tencent’s survey tools account for over 60% of digital survey traffic in China, especially when embedded within WeChat mini-programs.
Source: Tencent internal data and industry reports
Qualitative Research: The Art of Listening Between the Lines
Focus groups, in-depth interviews, and ethnographic research still play a vital role in understanding Chinese consumers, but they require cultural dexterity. Participants may hesitate to share candid opinions in a group setting, especially if their answers could be seen as disloyal, impolite, or out of sync with others.
Skilled moderators trained in local dialects and non-verbal cues are essential. Many Chinese respondents may not openly contradict a brand or state dissatisfaction directly. What’s left unsaid, or said in euphemisms, can be just as meaningful as what’s spoken.
In rural areas and lower-tier cities, face-to-face intercept interviews or home visits may be more effective than digital channels, especially among older demographics with limited app literacy.
Example: A global FMCG brand could run taste tests for new snacks in Shanghai and Chengdu. While Shanghai participants might discuss flavor in marketing terms, Chengdu participants may reference family traditions and mealtime rituals. Both data sets will be valuable, but wildly different in tone and framing.
Platform-Based Research: Where Behavior Happens
Increasingly, behavior-based research on Chinese platforms is replacing self-reported data. Tools for social listening on Xiaohongshu, Douyin, and Weibo allow brands to track organic conversations, reviews, and influencer interactions in real time. This method offers rich, unfiltered insights only if researchers understand local slang, memes, and the fast-moving social codes that govern engagement.
Leveraging Live-Streaming and Digital Ethnography
An emerging trend in Chinese market research is the use of live-streaming interviews and digital ethnography. Researchers engage with participants through live video sessions, often via mobile screen sharing, to observe real-time decision-making processes during online shopping experiences. This approach provides insights into how consumers interact with algorithms, peer reviews, and promotional incentives.
Platforms like Douyin (the Chinese version of TikTok) and Kuaishou have popularized live-streaming commerce, where influencers showcase products and interact with viewers in real-time. Brands have adopted similar strategies for research purposes, allowing them to observe authentic consumer behaviors in natural settings.
For instance, during a live-streamed shopping session, a participant might discuss their thought process while choosing between products, revealing factors such as brand perception, price sensitivity, and the influence of peer recommendations. This method offers a richer, more nuanced understanding of consumer behavior compared to traditional surveys.
Recruit the Right Respondents
Getting the methodology right means little if the respondents don’t reflect the realities of China’s diverse consumer base. With a population that spans rural to hyper-urban, Gen Z to retirees, and everything in between, recruitment is one of the most critical and misunderstood steps in the research process.
Many international brands default to panels based in tier-1 cities like Beijing, Shanghai, or Shenzhen. While these metros offer easy access to digitally fluent, affluent consumers, they represent only a fraction of the Chinese population. Insights gathered here can skew overly optimistic or trend-forward, failing to reflect the slower adoption curves, different aspirations, and practical constraints of consumers in tier-2, 3, and 4 cities.
City-tier segmentation is often a more useful starting point than income or age alone. Lower-tier cities are home to emerging middle-class consumers with different brand loyalties, risk tolerances, and shopping rhythms. Mobile access may be high, but digital behavior often centers on group chats, community influencers, or price-comparison apps rather than impulse buys or brand storytelling.
Trust is another factor. Chinese respondents are often skeptical of unfamiliar research invitations, especially those that appear to come from foreign entities. Privacy concerns are amplified by growing public awareness of surveillance and data misuse. Clear disclosures, local branding, and appropriate incentives – preferably distributed via WeChat Pay or Alipay – go a long way in building credibility.
Here’s a simplified framework for how to think about respondent targeting:
In-person intercepts, voice-recorded diaries, local moderators
Recruitment also needs to reflect linguistic diversity. Mandarin may be the official language, but dialects like Cantonese, Shanghainese, or Hokkien dominate in certain regions, affecting not just how people speak but also how they think and respond. Ignoring these subtleties risks diluting the quality of the insights.
The goal isn’t just to find willing respondents. It’s to find the right mix of voices that reflect the layers of China’s consumer landscape – urban and rural, old and young, first-time buyers and category loyalists. That mix is what separates data from insight.
Choose the Right Local Partners
Conducting market research in China without the right local partner is like trying to navigate Beijing without a map or a VPN. Between strict data laws, platform-specific tools, and regional business norms, partnerships aren’t optional. They’re foundational.
Under China’s Personal Information Protection Law (PIPL) and related cybersecurity regulations, foreign companies conducting market research must work with licensed local entities. These partners ensure compliance with data localization rules, obtain the necessary permissions, and help navigate issues like respondent consent and secure data storage. Violating these protocols, even unintentionally, can result in blocked surveys, unusable data, or regulatory penalties.
But regulatory compliance is only part of the equation. The best local partners act as cultural interpreters, not just fieldwork executors. They know which platforms work in different regions. They can flag when a question falls flat or a concept may trigger political sensitivity. They often have pre-established panels or community connections that speed up recruitment without cutting corners.
Key traits to look for in a local research partner in China:
Transparency in methodology, recruitment, and sample quality.
Proven experience in your industry or category.
Strong digital capabilities, including mobile-first survey design and platform integration.
Multilingual moderation, especially for qualitative projects in regional markets.
Regulatory fluency, with up-to-date understanding of evolving compliance requirements.
Let’s say a global home appliance brand selected a local agency based solely on cost. Midway through the project, the agency ran unlicensed online surveys, resulting in platform shutdowns and a complete loss of data. The brand had to restart fieldwork, this time with a vetted partner, which cost both time and credibility.
In China, partnerships are not transactional; they’re relational. A good local agency won’t just execute your brief; they’ll help shape it, localize it, and protect it from avoidable missteps.
Analyze the Data with Local Context in Mind
Collecting data in China is only half the challenge. The other half, often overlooked by global teams, is interpreting that data through the right cultural and behavioral lens. Without context, even clean, well-structured datasets can lead to misleading conclusions.
Start with the basics: consumer expression in China is nuanced. Respondents often avoid direct disagreement or criticism, especially in group settings or formal interviews. This isn’t dishonesty; it’s cultural etiquette. The concept of “saving face” (mianzi) shapes how people share opinions, particularly when discussing sensitive topics like personal finances, government policy, or dissatisfaction with brands. What’s unsaid, or expressed obliquely, can carry more weight than a direct answer.
Quantitative surveys can be similarly distorted if global benchmarks are applied too rigidly. A net promoter score (NPS), for example, may skew artificially high or low depending on how Chinese respondents interpret the scale. A score of 7 might indicate strong satisfaction, not neutrality, because many respondents avoid giving top marks unless truly exceptional service is perceived. Translating scales, expectations, and phrasing without local validation risks entirely misreading consumer sentiment.
Researchers must also consider regional variability. An insight that holds in Hangzhou may fall apart in Harbin. Differences in spending power, brand exposure, education levels, and even platform usage create subtle but significant variations in interpretation. Treating China as a single market often results in data that’s technically correct but strategically useless.
Then there’s the issue of behavioral versus stated preferences. In tightly moderated environments like China’s internet, what consumers do often diverges from what they say. That’s why qualitative research, social listening, and mobile ethnography are vital complements to surveys. They surface the emotional and contextual drivers behind the numbers.
Finally, data storytelling matters. Stakeholders unfamiliar with the Chinese market need more than graphs; they need contextual framing. This might mean pairing survey results with platform usage maps, using participant quotes alongside heatmaps, or explaining why certain choices align with cultural norms.
In China, insight isn’t just about patterns. It’s about perspective.
Key Challenges to Be Aware Of
Conducting market research in China means navigating a minefield of legal, logistical, and cultural complexities. Even seasoned researchers can fall short if they overlook the structural challenges that shape the Chinese research environment.
Strict Data Privacy and Cybersecurity Laws
China’s Personal Information Protection Law (PIPL) and Data Security Law impose strict controls on how data is collected, stored, and transferred. Unlike GDPR, which focuses on user consent, PIPL emphasizes data sovereignty, requiring that data collected in China remain within its borders unless specific conditions are met. Cross-border data transfers require government approval and justification.
Cloud storage, survey platforms, and even incentives must comply. A foreign survey tool hosted outside China may be inaccessible or illegal. Researchers must use licensed, in-country platforms and work with authorized local partners to ensure compliance.
The Great Firewall and Platform Restrictions
China’s internet infrastructure is isolated from the global web. Platforms like Google, Facebook, Instagram, YouTube, and even some international survey tools are blocked. Researchers relying on these defaults will see broken links, incomplete responses, or zero reach.
Understanding which local platforms dominate your category – WeChat for lifestyle, JD.com for electronics, Douyin for fashion – is essential for effective targeting and distribution.
Censorship and Sensitivity Triggers
Certain topics are politically or culturally sensitive. Surveys referencing religion, politics, or unapproved health claims can be flagged or blocked entirely. Even innocuous questions can trigger red flags if phrased poorly or translated without nuance.
Keywords are monitored. Platforms may moderate or remove open-ended questions without warning. Local partners can help navigate this, but only if they’re experienced in compliance and crisis management.
Bias in Responses
Chinese respondents often provide socially desirable answers, particularly in group settings or when speaking with foreign researchers. This is amplified by a strong cultural emphasis on harmony and avoiding confrontation.
The result is the overreporting of satisfaction, the underreporting of criticism, and the avoidance of direct disagreement. Without accounting for this bias, insights may appear overly positive or lacking urgency.
Regional Disparities
National statistics mask deep divides. According to the latest figures from the CNNIC, Internet penetration in major cities exceeds 85%, while some rural provinces lag well behind. Income, education, language, and digital fluency vary significantly across regions.
Research that doesn’t account for these differences risks skewing results and missing critical growth markets. A tiered city strategy, and potentially multiple fieldwork approaches, is often necessary.
Language, Dialects, and Double Meanings
Mandarin is the official language, but dozens of dialects are spoken across China, and translation doesn’t guarantee comprehension. Idioms, cultural references, and platform-specific slang all shape how questions are interpreted.
Professional translation is only the starting point. Effective market research in China requires back-translation, pre-testing, and review by native speakers familiar with the region and category.
Even well-designed research can fail if these barriers aren’t acknowledged upfront. The stakes in China are high, but so is the opportunity for brands that navigate these challenges with agility, respect, and local expertise.
Emerging Trends in Chinese Market Research
China’s market research landscape isn’t just evolving; it’s leapfrogging. As technology reshapes how consumers engage, researchers are adopting new tools and approaches that better reflect the speed, scale, and nuance of digital life in China.
Integrated Research Within Super Apps
WeChat has transformed from a messaging tool into a multi-functional ecosystem for shopping, banking, health, and more. Increasingly, research is embedded directly within WeChat mini-programs, enabling surveys, polls, and behavioral tracking to happen seamlessly in the same environment where users transact.
This integration boosts response rates and allows for real-time, contextual insights. For example, gauging user feedback moments after a purchase or app interaction.
Social Listening on Local Platforms
Global sentiment tools like Brandwatch or Talkwalker don’t scrape Chinese platforms like Xiaohongshu, Weibo, or Bilibili. To monitor what Chinese consumers are saying, researchers rely on local social listening tools that can decode hashtags, emojis, slang, and fast-evolving memes.
This form of ethnography has become essential for brands in categories like beauty, fashion, tech, and food, where peer recommendations, micro-influencers, and short-form content drive purchasing decisions.
In beauty, for instance, Xiaohongshu is often a more trusted source than a brand’s official site. Comments, before-and-after photos, and product comparisons offer deep insight into consumer expectations and unspoken needs.
Live-Stream-Based Research
As live commerce explodes, researchers use similar formats to study in-the-moment decisions. Participants join live-streamed product trials or share mobile screens during real-time shopping journeys. This allows moderators to observe how users navigate product detail pages, evaluate reviews, respond to promotions, and decide what to buy or abandon.
These sessions offer a window into algorithm-driven behavior and allow researchers to identify digital triggers that wouldn’t surface in traditional interviews.
Gamification and Incentivized Micro-Tasks
Younger audiences are more likely to engage when research feels like a game or a challenge. Some brands now use gamified surveys, interactive quizzes, or platform-native rewards (like Douyin points or JD.com discounts) to increase participation and reduce drop-off rates.
Gamification also helps capture emotion or implicit reactions using image-based questions, timed responses, or swipe-to-choose interfaces, making it easier to analyze subconscious preferences.
AI-Driven Insight Generation
Artificial intelligence is increasingly used to clean, categorize, and analyze large volumes of qualitative data. Tools trained on Mandarin and regional dialects can now detect sentiment, group themes, and even flag contradictions in long-form responses or transcripts.
While human moderation remains critical, AI tools reduce turnaround times and help local teams scale research efforts, especially when tracking trends across vast volumes of user-generated content.
These emerging approaches aren’t experimental; they’re fast becoming the standard. In a market defined by innovation, brands that fail to evolve their research strategies risk falling behind the very consumers they’re trying to understand.
Winning with Cultural Intelligence
Success in China isn’t just about size or speed—it’s about understanding the systems, signals, and subtleties that shape how consumers live, decide, and spend. In a market where mobile usage is near universal, foreign platforms are blocked, and behaviors shift rapidly across city tiers, standard global research playbooks won’t cut it.
The most effective market research in China is never plug-and-play. It’s built locally, tested regionally, and interpreted fluently in culture and context. It demands partnerships with in-country experts, compliance with data sovereignty laws, and a deep understanding of what drives decisions on platforms like WeChat, Douyin, and Xiaohongshu.
However, the payoff is significant for brands willing to invest in this level of understanding. China offers not just scale, but a glimpse into the future of how digital behavior, platform ecosystems, and consumer expectations may evolve globally.
Market research here isn’t just about validating concepts. It’s about uncovering what matters – on the ground, in the feed, and the moment.
FAQ: Market Research in China
Is it legal to conduct market research in China?
Yes, but it must comply with China’s Personal Information Protection Law (PIPL) and the Data Security Law. Foreign companies must work with licensed local research partners and ensure all data collection and storage happens within China, unless otherwise approved.
What platforms can I use for surveys in China?
Global tools like SurveyMonkey and Google Forms are often blocked. Common local platforms include:
Wenjuanxing (问卷星)
Sojump (金数据)
Tencent Questionnaire
These platforms integrate with WeChat and are compliant with Chinese regulations.
How do Chinese consumers typically respond to surveys?
Cultural norms like mianzi (saving face) can lead to socially desirable answers. Surveys should use indirect phrasing, behavioral questions, and localized framing to encourage more authentic responses.
What is the best way to recruit respondents in China?
Recruitment should be regionally tailored:
Use WeChat groups for urban panels.
Work with local community partners in lower-tier cities.
Offer incentives via WeChat Pay or Alipay to boost response rates.
Can I use social listening tools in China?
Yes, but global tools like Brandwatch may not cover Chinese platforms. Use local tools to monitor:
Xiaohongshu (RED) for product reviews and beauty trends
Douyin and Kuaishou for e-commerce behavior
Weibo for sentiment tracking
Is live-streaming research really used in China?
Yes. Live-stream-based digital ethnography is growing fast. Researchers observe participants via mobile screen share while they browse or shop, offering real-time insight into how decisions are made.
How to conduct online market research in Asia: The Go-To Guide Interested in understanding how to approach online research across other Asian countries? Download the guide here
Need help navigating China’s complex research terrain? Our Asia-based teams specialize in platform-specific, compliant, and culturally tuned research solutions. Contact us today.
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