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 behaviour 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.

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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, utilising 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.

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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 behaviour. 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 personalisation, brands like Louis Vuitton invest in AI-driven tools to tailor marketing campaigns and product recommendations based on consumer behaviour. 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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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 neighbourhoods, 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 see digital acquisition costs climb, sometimes exceeding average order values. In this landscape, storefronts are emerging as strategic complements: part showroom, part service centre, part brand theatre. 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 behaviour.

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 favour 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 neighbourhood-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

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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.

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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 behaviour. 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 personalise 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 centre 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 catalogues. 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.

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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 personalised 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. Facial recognition could trigger dynamic pricing based on loyalty status or previous purchases if consumers opt in.

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 behaviour 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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You’re watching a livestream. A pair of sneakers flash on screen, not as a hard sell, but as part of the host’s outfit. Before the segment ends, you’ve clicked, carted, and checked out, without ever intending to shop.

This is ambient shopping.

In 2025, 69% of consumers report making purchases while doing something else: scrolling through social media, watching content, or listening to a podcast. The shopping journey has diffused into everyday digital moments, becoming less of an event and more of a background behaviour.

What used to be a deliberate act – searching, comparing, deciding – now happens through exposure. Commerce has folded itself into the scroll, the stream, the story.

This isn’t just a shift in attention span. It reflects a new consumer posture, where intent is optional and interaction is often unconscious.

The Context Collapse of Commerce

Shopping no longer requires a shift in mindset. It happens mid-scroll, mid-stream, mid-conversation, folded into the same feed as entertainment, news, and personal updates.

The boundaries that once separated commerce from content have eroded. A beauty tutorial triggers a purchase. A meme account becomes a storefront. Livestream hosts don’t just entertain; they convert.

This is the new consumer environment: one feed, many functions. People don’t open shopping apps with intent. They encounter products passively, in spaces curated for relevance, not retail.

Brand Signal: Amazon x MrBeast
In 2024, Amazon partnered with YouTube creator MrBeast to produce Beast Games, a Prime Video series built around high-stakes, creator-driven competition. While not a direct shoppable integration, the collaboration signals Amazon’s long-game strategy: embedding its brand deeper into entertainment ecosystems where Gen Z and millennial audiences already spend time. As retail and media converge, partnerships like these reflect how commerce can grow ambiently through cultural relevance and presence, not just transactions.

In 2024, social commerce accounted for an estimated 19% of global ecommerce.

Social platforms have adapted fast. TikTok’s algorithm surfaces trending items before users realise they’re in demand. Instagram’s native checkout makes the path from discovery to purchase nearly invisible. Shoppable links, tagged products, and dynamic ads create an ecommerce layer that moves with the user.

There’s no funnel here. Just frictionless moments where curiosity meets convenience.

Designing for the Distracted

In a world of ambient shoppers, attention is fleeting and rarely focused. Products are chosen in seconds, often without sound, sometimes without context. Design has to do more with less.

For brands, this means optimising for recognition, not explanation. Packaging needs to pop on a 6-inch screen mid-scroll. Labels must convey function at a glance. Logos should be legible when compressed into a corner of a carousel ad.

Functionality also shifts. Shoppers aren’t always in a buying mindset, so products that solve immediate needs, such as hydration, energy, skin repair, and comfort, are more likely to convert. In beauty and personal care, this has driven a wave of minimalist formats: stick balms, on-the-go sprays, and single-dose sachets. In food, snackable and resealable dominate.

The sensory layer matters. Swipeable palettes shimmer under livestream lighting, stickers shift colour in motion, and packaging textures mimic velvet or gloss, begging for thumb contact. These cues don’t explain the product; they tempt the finger before the brain can even catch up.

Ambient shopping is designed without a captive audience. Relevance has to surface instantly, or it’s lost.

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Ambient Influence – From Intent to Impulse

The traditional path to purchase is dissolving. Search, compare, decide – these steps still exist but no longer happen in sequence. In ambient shopping, influence works in reverse. Exposure comes first. Intent may never form.

Context drives the sale: who shared the product, where it appeared, and what mood the consumer was in. Algorithms precisely track these signals, building behavioural clusters that predict, not prompt, buying moments.​

Brand Signal: Sephora’s Instagram Shoppable Posts
Sephora, a global beauty retailer, has effectively utilised Instagram’s shoppable posts to streamline the customer journey from discovery to purchase. Sephora allows users to explore product details and make purchases without leaving the app by integrating product tags into their posts and stories. This strategy has enhanced the shopping experience by reducing friction and meeting consumers where they are most engaged.

A user who lingers on fitness content might be served hydration tablets in the next reel. Someone who pauses on travel vlogs sees compression socks, not because they searched for them, but because the algorithm anticipates utility.

This isn’t personalisation as we knew it. It’s predictive proximity – placing the right product near the right emotion, habit, or setting. Instagram and TikTok deploy dynamic ad creatives that shift based on what users last hovered over, paused on, or bookmarked, even if they never clicked.

Every swipe, scroll, and second becomes part of a real-time model that interprets potential intent from ambient behaviour. That interpretation drives conversion.

The Market Research Mandate

Understanding ambient shoppers requires more than surveys and segmentation models. These consumers may not recall what they bought, let alone why. Intent is ambient, actions are reflexive, and memory is unreliable.

Market research tools—built around conscious decision-making—fall short. What’s needed is continuous visibility into behaviour as it unfolds. Passive metering, in-the-moment mobile intercepts, and digital ethnography are becoming essential to decoding this new mode of commerce.

Brands are replacing static personas with dynamic behavioural profiles, updated in real time through telemetry: app swipes, click paths, video completion rates, and dwell time. This data doesn’t just measure attention; it reveals patterns invisible to the consumer.

Ethnographic insight is also evolving. Researchers now observe not just what people say they do but how they behave when no one’s asking. Ambient commerce, by nature, hides in plain sight. To surface it, insight teams are embedding themselves within ecosystems – gaming platforms, live stream chats, private group DMs – where shopping happens without ever being called shopping.

Why It Matters

Ambient shopping disrupts marketing, product timing, UX, packaging, and platform strategy. Brands that fail to adapt may not only lose relevance; they may simply fade from view.

Brand Signal: MAC Cosmetics

MAC Cosmetics has leaned into AR-powered try-on tools, allowing Instagram users to experiment with lipstick shades in real time. These filters helped turn scroll time into trial time, extending product discovery into personal content streams. 

The implication is clear: brands that rely solely on declared data will miss what matters. To serve the ambient shopper, research must become ambient too.

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What’s Next: Invisible Interfaces, Voice Commerce, and Haptic Nudges

Shopping is dissolving into digital life. Sometimes that happens in a social feed. But increasingly, it occurs in a voice command, a wearable, a smart mirror, a YouTube scroll, or a fridge notification. The next wave of ambient shopping will be always on, always listening, always ready to act.

These moments are powered by a new layer of frictionless tech, voice-first commerce, smart home replenishment systems, in-car commerce experiences, and ambient computing that adapts to real-time behaviour.

Brand Signal: Walmart’s AI-Powered In-Home
In 2024, Walmart rolled out an AI feature that automatically restocks essentials in customers’ refrigerators based on usage patterns. By integrating replenishment with its InHome delivery service, Walmart has moved purchase decisions from conscious action to predictive automation.

Brand Signal: In-Car Payments Go Mainstream
As of 2024, fourteen global automotive brands offer in-car commerce solutions across fifteen countries. From paying for parking and fuel to ordering food, these systems turn dashboards into checkout counters, merging mobility with purchase convenience.

Smart assistants are already facilitating purchases through simple voice commands. But as they integrate with recommendation engines and personal data ecosystems, they’ll shift from reactive tools to proactive curators. A fridge that restocks based on dietary shifts. A speaker who suggests skincare before seasonal dryness hits. These systems won’t ask what you want. They’ll anticipate what you’ll need, then quietly deliver it, embedded into the devices that already know your routine.

Wearables and haptics will deepen the loop. Wearable-triggered shopping moments are already in play – whether it’s a subtle wrist vibration during a product drop, or biometric signals prompting contextual offers in sync with mood, movement, or health data.

Even ambient environments are joining in. TVs enable one-click buys mid-show, car dashboards suggest pit-stop promotions, and public displays respond to proximity and profile. Shopping doesn’t interrupt the experience; it rides alongside it. It’s not just ecommerce anymore; it’s ambient computing in retail, where the interface fades and the environment itself becomes the point of sale.

The future of retail isn’t about transactions. It’s about presence. The most successful brands will be those that adapt to being everywhere without feeling intrusive.

The Commerce You Don’t See Coming

The most powerful shopping moments no longer look like shopping. They’re quiet, quick, and nearly invisible, tucked between the stories we watch, the songs we stream, the feeds we skim. And yet, they’re redefining how products are discovered, evaluated, and bought.

Brands that chase attention will lose to those that understand absence. Ambient shoppers don’t want to be interrupted. They want relevance to find them – seamlessly, silently, when the moment feels right.

This isn’t about optimising for clicks. It’s about designing ecosystems that respond to presence, not prompts. Shopping becomes part of the atmosphere, not an activity. The opportunity lies not in louder campaigns, but in quieter cues – signals that align with context, emotion, and rhythm.

As digital behaviours blur and physical spaces become interactive, the lines between life and commerce will continue to dissolve. Invisibility, not innovation, will define the winners. The question for brands is no longer how to break through, but how to blend in – with precision, purpose, and a deep understanding of the shopper who never meant to shop.

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It started, as most viral purchases do, with a swipe. A TikTok creator with flawless skin and fluorescent lighting demonstrated a compact beauty gadget that promises salon-grade results at home. The video was less than a minute long, filled with upbeat music, quick cuts, and glowing testimonials in comments. Within minutes, a viewer – perhaps a student in Manila, a young professional in Manchester, or a stay-at-home parent in Chicago – clicked through the in-app link and completed the purchase.

By the time the package arrived a few days later, the product had already lost its mystique. A single-use, maybe two, followed by quiet abandonment. The device now sits in a drawer, a fleeting artefact of a momentary high. It’s a pattern playing out on repeat across millions of screens and households.

Welcome to the world of #TikTokMadeMeBuyIt, a phenomenon that has exploded to over 80 billion views and counting. Entire product categories – skincare tools, cleaning gadgets, oddly shaped kitchenware – are being built and sold off the back of short-form content engineered to trigger impulse buys. For brands, the promise is irresistible: high engagement, lightning-fast conversions, and instant exposure to global audiences.

But with that promise comes a growing problem. Post-purchase regret is creeping in, and repeat purchase rates remain elusive. Products go viral, but not necessarily for the right reasons – or to the right audiences. Shoppers buy on a dopamine rush, not because of need or brand loyalty. When the dust settles, many never buy again.

This is the paradox of TikTok commerce: it’s brilliant at driving desire but shaky at sustaining satisfaction. As marketers lean into creator campaigns and trending formats, a harder question emerges: What happens after the impulse fades? How can brands transform a fleeting moment of virality into lasting consumer value?

The answer requires looking past the algorithm – and into the mindset of the modern, post-swipe shopper.

The Rise of Social-First Shopping

The act of shopping has always been tethered to some form of discovery – what’s new, what’s desirable, what solves a problem. Traditionally, that discovery began with intent. Consumers searched for what they needed – on Google, Amazon, or a brand’s own website – then navigated through specs, reviews, and comparisons to make a decision.

But today, especially among younger demographics, the discovery process is being rewritten – and TikTok is the new front door.

According to a 2023 survey by Adobe, over 40% of Gen Z users in the U.S. now use TikTok as a search engine, turning to short videos for everything from product reviews and tutorials to restaurant recommendations and tech hacks. A Google executive famously acknowledged that nearly half of Gen Z prefers TikTok or Instagram over Google for local search and ideas. And it’s not limited to the West – DataReportal’s 2024 global digital trends report shows similar patterns in Southeast Asia, where TikTok is already a leading platform for beauty and lifestyle discovery in markets like Indonesia, the Philippines, and Thailand.

This shift from intent-based to content-led shopping represents more than a change in channel. It marks a transformation in the psychology of the buyer journey. Consumers aren’t searching because they know what they want. They’re swiping through content, waiting to feel something. The algorithm does the rest – serving a stream of product demos, creator endorsements, and “must-have” items that feel personal, unscripted, and trustworthy.

The mechanism driving this new model is emotional storytelling – often through creators who speak directly to their audience as peers, not salespeople. There’s no hard pitch. Instead, there’s relatability, humour, and vulnerability. A creator casually shares how a sleep spray changed their nighttime routine, or how a multi-use blender made morning smoothies easier. The product isn’t the focus – it’s part of a lifestyle narrative. And because the platform is optimised for short-form engagement and rapid feedback, the reward loop is instantaneous. Users like, share, comment, click – and often buy – without leaving the app.

This is particularly powerful in categories that lean into aesthetics, performance, or transformation. Beauty, fashion, wellness, gadgets, and kitchenware dominate the #TikTokMadeMeBuyIt trend because they demonstrate well on video and promise immediate change or convenience. A pore vacuum that clears blackheads in seconds. A wearable fan for summer commutes. A viral foundation that “melts” into your skin. These products are engineered for visual impact – and often experience a sales spike within hours of trending.

Brands are scrambling to meet this shift. In the U.S., retailers like e.l.f. Beauty and Glow Recipe have embraced TikTok not just as an advertising platform, but as a product incubator. Viral feedback is used to iterate faster, launch new SKUs, or create limited drops tailored to what’s trending. In the UK, Boots and ASOS have established creator partnerships and in-app shopping hubs designed specifically for TikTok users. Meanwhile, in Southeast Asia, TikTok Shop has integrated payment and delivery into the app itself, offering a seamless purchase experience – and challenging traditional ecommerce giants in the region like Shopee and Lazada.

Yet this rise of social-first shopping is not without friction. What works in a 60-second video doesn’t always translate to long-term product satisfaction. And while the buying journey may begin in a feed, it doesn’t always end in a positive review – or a second purchase. The next challenge for brands is not just to capture attention in the scroll, but to justify the decision after the impulse fades.

The dopamine of discovery is real. But for brands, it’s what happens next that determines whether a TikTok sale becomes a customer – or just a view that briefly converted.

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The Retention Cliff: From Click to Regret

For brands riding the wave of TikTok virality, the first 24 hours can feel like a triumph. Products sell out, follower counts spike, and warehouses scramble to restock. But beyond the euphoria of the initial surge lies a less glamorous truth: a vast number of these purchases don’t lead to loyalty. Many don’t even lead to usage.

Return rates for impulse-driven social commerce are difficult to pin down, but anecdotal reports from retailers and logistics firms suggest a growing pattern of disappointment, disuse, or buyer’s remorse. A 2023 survey by Coresight Research found that 35% of Gen Z consumers regretted at least one purchase they made via TikTok or Instagram – not because of price, but because the product didn’t live up to the hype, was rarely used, or was simply forgotten.

The psychology behind this regret is well-documented. Neurologically, impulse buying activates the brain’s reward system, delivering a short-lived hit of dopamine. The problem is that platforms like TikTok are engineered to optimise this very sensation – quick visuals, emotional narratives, and social proof in the form of comments and likes. Consumers experience the thrill of discovery and the convenience of one-click purchasing simultaneously. But once the package arrives, the context disappears. The content that made the item feel urgent is gone, and the user is left with a product that may not fit their life – or their expectations.

This dissonance is particularly acute in categories like beauty and wellness, where perceived effectiveness can vary dramatically by individual. A trending skincare serum might go viral for its packaging or influencer endorsements, but fail to deliver visible results. A portable blender could be lauded for design, but prove impractical in daily use. These mismatches feed into a broader trend of one-time TikTok purchases that rarely lead to second sales.

For businesses, this is more than a retention problem – it’s a strategic misalignment. The traditional ecommerce funnel assumes that satisfaction leads to loyalty. But in the TikTok ecosystem, the funnel is often truncated. Discovery and conversion happen in seconds, often without critical evaluation or consideration of product fit. Post-purchase, there’s often no follow-up, no onboarding, and no effort to transition the buyer from intrigued to invested.

Consider the case of “miracle” gadgets – a segment that consistently trends on TikTok. From LED face masks to handheld fabric shavers, these products generate excitement because they solve specific problems quickly, and they look satisfying on camera. But many of them fall into what analysts call “low utility, high novelty” territory. They may work, but they rarely become essential. Without repeat use, there’s no brand affinity. Without brand affinity, there’s no return visit.

Even the most experienced marketers are struggling with how to measure value in this environment. A viral video might generate millions in sales, but if the average customer doesn’t return, the cost of acquisition outweighs long-term gain. This is particularly risky for startups that build their entire go-to-market strategy around influencer momentum. When the virality fades, so does the revenue.

To navigate this cliff, brands must expand their thinking. The point of conversion is no longer the endpoint – it’s the beginning of a new challenge: how to turn a moment of entertainment into a meaningful, lasting consumer relationship. This requires more than a clever TikTok strategy. It requires rethinking product positioning, support systems, and post-purchase engagement.

Because if the first purchase ends in disappointment, it won’t just be the product that gets left in the drawer – it’ll be the brand.

What TikTok Teaches (and Misleads) About Product-Market Fit

In the traditional product development model, product-market fit is discovered through cycles of research, iteration, and real-world validation. Success is measured by sustained demand, positive feedback, and repeat purchases. But TikTok has disrupted that rhythm – catapulting products to viral fame before they’ve had a chance to prove long-term relevance.

TikTok doesn’t reward utility or staying power. It rewards novelty, visual appeal, and story potential. Products that go viral tend to be those that photograph well, demonstrate instantly, or slot neatly into an aesthetic. That doesn’t necessarily mean they solve real problems – or that they’re designed to endure.

Consider the wave of viral beauty tools: ice rollers that promise depuffing, LED masks that hint at spa-quality treatments, pore vacuums that visibly extract blackheads. These products generate enormous buzz because they produce quick visual results on camera. But behind the screen, many lack clinical efficacy, are inconvenient to use, or break easily. A purchase may follow a single swipe, but it’s not often followed by a second.

This isn’t to say TikTok can’t uncover genuine product-market fit. Some brands have used it as a real-time feedback engine. Stanley tumblers, for instance, didn’t go viral for being flashy – they went viral because users demonstrated their durability and insulation performance. Real utility was amplified by real stories. In another case, COSRX’s snail mucin skincare product surged globally because users documented consistent results, not just cute packaging or influencer endorsement.

Still, these examples are the exception. More often, TikTok leads brands to confuse buzz with validation. A video’s reach can feel like a green light, prompting restocks, ad spend, and even new product lines before customer satisfaction has caught up. The platform’s velocity compresses timelines and encourages decisions based on engagement metrics rather than behavioural insights.

This misalignment is particularly dangerous for early-stage brands. A viral product can mask foundational weaknesses – limited product testing, supply chain fragility, or unclear positioning. By the time returns spike or negative reviews roll in, it’s too late. The algorithm has already moved on.

Brands that rely too heavily on TikTok as a market validator risk losing touch with their core consumer. Metrics like view counts, shares, or comments provide signals, but not substance. They don’t replace the discipline of product testing, customer interviews, or retention analysis.

The real opportunity lies in combining TikTok’s reach with traditional rigour. Use viral attention as a signal to dig deeper: Who is buying? Why? Are they returning? Would they recommend the product without the hype?

Because TikTok can light the match – but product-market fit is still the fire that must burn long after the trend cools.

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Designing for the Second Purchase

The first purchase may be won by a scroll and a swipe. The second is earned – slowly, deliberately – through trust, value, and consistency. For brands seeking sustainable growth beyond the TikTok boom, retention is no longer a back-end metric – it’s a product design imperative.

The most successful consumer brands on TikTok are not those that simply sell well in a 15-second clip. They’re the ones that understand the post-viral customer journey and intentionally build for re-engagement. This starts with setting expectations early. In an environment where storytelling trumps specification, it’s tempting to lean into aspirational content or exaggerated claims. But overselling a product, even indirectly through creator enthusiasm, leads to a trust deficit if the product underdelivers.

That’s why transparency has become a powerful retention strategy. Beauty brand Function of Beauty, which customises shampoo and skincare based on user profiles, leans into detailed user education across its platforms. TikTok may drive the click, but the website follows up with quizzes, how-to videos, and community reviews, helping buyers understand what they’re getting and why it matters. This reduces post-purchase doubt and creates more informed, loyal users.

Similarly, the unboxing and onboarding experience has become a crucial moment for loyalty. What happens in the first 10 minutes after the package arrives often determines whether the product will be used again. Packaging that educates, instructions that are intuitive, and apps or QR codes that reinforce usage habits all play a role. Brands like Glow Recipe include usage tips and layering instructions in their packaging inserts – offering a tactile bridge between online excitement and offline satisfaction.

Customer support is another pivotal lever. In the TikTok era, customer service is not a cost centre – it’s content. A quick, empathetic response to a complaint shared publicly can diffuse tension and even boost brand favorability. A user who feels heard is far more likely to return, even after a misstep. Some brands proactively monitor TikTok mentions to identify potential issues before they escalate – a form of customer care that feels organic, not outsourced.

But perhaps the most overlooked retention strategy is narrative continuity. Too often, brands treat each TikTok moment as a one-off campaign. Instead, successful companies develop a story arc that encourages repeat engagement. Korean skincare brand COSRX, for example, has built TikTok content around long-term skincare routines rather than single products. This strategy not only keeps users coming back but also positions the brand as a partner in progress – not just a purveyor of trends.

Product ecosystems also matter. Brands that offer bundling, refills, or complementary products increase the likelihood of repeat purchases. A consumer who buys a viral water bottle may return for accessories, cleaning kits, or seasonal drops. A wellness brand that offers a subscription model – accompanied by timely reminders and rewards – can convert impulse buyers into habitual users.

Ultimately, designing for the second purchase requires a mindset shift: from campaigning to cultivating. It’s not enough to convert interest into sales. Brands must convert experience into trust, and trust into habit.

That means the real work begins after the trend peaks. When the influencers move on and the algorithm shifts, what remains is the quality of the product, the clarity of the experience, and the commitment to serving customers beyond the first impression.

Because in the long arc of brand building, it’s not the first click that matters most. It’s the one that comes after they’ve already tried you – and decide to come back.

Virality Is a Spark, but Trust Is the Flame

If TikTok has taught us anything, it’s that attention is no longer scarce – but intention is. In a world where discovery happens in seconds, brands can no longer afford to confuse visibility with viability. The speed and scale of social commerce have made it deceptively easy to move product. But moving product is not the same as moving people.

The brands that will endure are not the ones that win the algorithm today – they’re the ones that understand why the algorithm worked in the first place, and what happens when it doesn’t. That requires more than creative output. It demands input, specifically, research that maps impulse against behaviour, and curiosity against conversion.

Strategy in this new era must be grounded in consumer foresight, not just content performance. Which products trigger regret? Which creators sustain trust? What conditions turn first-time buyers into lifelong customers? Without this insight, brands will remain reactive – chasing trends that spike but don’t stick, and mistaking engagement for endorsement.

Social commerce is not a trend. It’s a fundamental restructuring of how consumers find, evaluate, and commit to brands. But the platforms themselves are still evolving, and consumer expectations are outpacing the infrastructure that surrounds them. What’s needed now is a deeper layer: systems for listening, testing, validating, and optimising – before, during, and after the trend hits.

This is where market research is no longer a support function – it becomes a strategic core. The ability to test message resonance, prototype digital experiences, and measure post-purchase satisfaction in real time is what will differentiate high-growth brands from high-churn ones. Those who invest in insight will adapt faster, course-correct smarter, and build the emotional capital that virality alone can’t deliver.

Because in the economy of attention, the spark may come easily. But it’s the slow, intentional burn – fed by relevance, reliability, and research – that keeps consumers coming back.

That’s not the algorithm’s job. It’s yours.

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Late one evening in Lagos, 22-year-old Chika is scrolling through TikTok, eyes fixed on a local influencer demoing the latest face serum. She watches the 30-second video twice, screenshots the product, and toggles over to Jumia to compare prices, scanning reviews that look a little too polished to be real. Before checking out, she sends a message to her cousin in Ibadan: “Have you tried this one? Is it legit?” Only after a thumbs-up and a money-back assurance from the seller does she complete the purchase – on mobile, of course.

This isn’t an isolated case. It’s a snapshot of how the next billion consumers will shop, click, and connect.

While Western economies grapple with saturation, inflation, and shifting loyalty, the momentum is migrating – toward Southeast Asia, Africa, and parts of Latin America. These regions are no longer just “emerging markets.” They are where the most dynamic, mobile-first, and digitally sophisticated consumers are coming of age.

The numbers make the case undeniable. According to the United Nations, over 85% of global population growth through 2050 will come from Africa and Asia. The GSMA reports that mobile internet penetration in Sub-Saharan Africa is set to reach 50% by 2025, up from 28% in 2019. Meanwhile, the World Bank highlights how smartphone adoption is leapfrogging traditional infrastructure, giving rise to an entire generation that skipped the PC era entirely.

But these consumers are not easily won. They are bilingual and bicultural, equally fluent in local slang and global memes. They are digitally native but deeply mistrustful, having grown up in online ecosystems rife with scams, misinformation, and empty brand promises. And they are forcing brands – both global and local – to rethink what it means to earn attention, deliver relevance, and build trust in the age of hyper-connectivity.

This is not just a demographic shift. It’s a behavioural revolution. And it’s already underway.

Meet the Next Billion: Demographics, Access, and Expectations

This new wave of consumers is young, connected, and coming online fast. In markets like Nigeria, Indonesia, Vietnam, and the Philippines, the median age hovers around 25. These are societies where more than half the population wasn’t yet born when Facebook launched – and for them, digital engagement isn’t an evolution; it’s a native state.

Urbanisation is accelerating across these regions, but it’s not confined to megacities. Second- and third-tier cities are becoming powerful engines of growth, fueled by digital access and rising educational attainment. In Vietnam, for instance, over 94% of youth are literate, and the number of university graduates has doubled over the past decade. Similarly, Nigeria’s youth enrollment in tertiary education is climbing, despite infrastructure constraints. With education comes language dexterity: millions speak at least two languages – one local, one global – and they switch between them instinctively, depending on the context, platform, or audience.

If their predecessors logged onto the internet, this generation lives inside it – and does so almost exclusively via smartphone. In Indonesia, smartphone penetration has surpassed 75%, with apps like Tokopedia, Gojek, and Shopee becoming gateways to everything from groceries to financial services. In sub-Saharan Africa, handset affordability and prepaid data plans have made mobile the default medium for learning, shopping, and socialising. The desktop? Many have never touched one.

Browser-based experiences are increasingly irrelevant. Instead, this generation navigates a constellation of apps, each with its own cultural role. WhatsApp is for family, Instagram for aspiration, TikTok for entertainment, and Telegram or local forums for unfiltered information. Platform behaviour is deeply segmented and purpose-driven. Brands attempting to force a uniform message across channels are quickly tuned out.

And while their tech habits may look similar from a distance, the nuances run deep. In Nigeria, digital spaces are often leveraged as tools for activism and community solidarity. Mistrust in institutions has made peer recommendations and online reputation more powerful than formal brand campaigns. By contrast, in Indonesia, religious and cultural values shape how products are perceived and promoted – especially in sectors like fashion, beauty, and food. Vietnamese consumers, on the other hand, exhibit a high degree of tech optimism, embracing e-wallets and livestream commerce, but place enormous emphasis on product quality and after-sales service, driven by prior experiences with low-cost imports.

These differences matter. What unites the next billion is their digital fluency, but what distinguishes them is the lens through which they evaluate brands. A price drop may trigger interest in Nigeria, but in Vietnam, durability and performance often take precedence. In Indonesia, localised design or halal certification may be the tipping point. The common thread is that these consumers are not passive recipients of global marketing – they are active participants, savvy navigators, and, increasingly, vocal critics.

To engage them, brands must move past old assumptions about emerging markets being homogenous or easily won with scale. What’s unfolding is a more complex, more nuanced, and more demanding consumer environment – and it’s being shaped not just by demographics, but by deep-seated expectations forged in mobile-first, culturally hybrid, and rapidly evolving societies.

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Mistrust Is the Default Setting

For many of the next billion consumers, scepticism isn’t a reaction – it’s a reflex. Decades of unreliable infrastructure, political instability, and inconsistent enforcement of consumer rights have conditioned buyers to approach brands and platforms with guarded caution. In these markets, trust is not assumed; it’s earned slowly and lost quickly.

The scale of the challenge is significant. According to Edelman’s 2024 Trust Barometer, trust in institutions – including businesses – remains markedly lower in developing regions than in developed ones. In Nigeria, only 42% of respondents said they trust brands “to do what is right,” compared to 62% in the UK. In Indonesia, that figure was closer to 50%, but even there, trust is often linked to familiarity rather than formal reputation – people tend to trust people, not corporations.

This backdrop has fueled the rise of peer-to-peer influence as a dominant decision-making force. In the Philippines, Facebook community groups like “Online Budol Finds” (slang for impulsive purchases) function as real-time marketplaces and review boards, where users share unfiltered opinions about products, pricing, and service. In Kenya, WhatsApp groups play a similar role, serving as both watchdog and validator in a system where traditional consumer protections are weak or absent. Even in Vietnam, where e-commerce infrastructure has rapidly improved, 54% of online shoppers say they rely on recommendations from friends or family over brand messaging, according to Statista.

This preference for informal verification mechanisms stems from bitter experience. Counterfeit goods remain a rampant issue across markets – from fake electronics in Ghana to diluted skincare products in Indonesia. In response, many consumers have developed an internal checklist: check the seller’s social proof, confirm the payment method, look for real customer images, and verify delivery policies. Brands that fail even one of these checks are likely to be discarded in seconds.

At the same time, digital mistrust is compounding the issue. Scams, phishing attacks, and fake reviews have tainted the e-commerce experience. The GSMA estimates that more than 40% of mobile internet users in Africa and Southeast Asia have experienced some form of online fraud or misleading advertising. In Indonesia alone, the National Cyber and Crypto Agency reported over 190 million cyberattacks and suspicious traffic incidents in 2023.

In this climate, even influencer marketing – a strategy once thought to fast-track trust – has grown less effective. In Vietnam, consumers increasingly question whether influencers are being paid to promote products they don’t actually use. The same holds true in Nigeria, where audiences are savvy enough to distinguish between genuine recommendations and sponsored scripts. The result is a gradual shift toward micro-influencers and community advocates, whose endorsements feel more relatable and less rehearsed.

The implications for global brands are profound. Standard top-down marketing no longer carries weight. Instead, trust must be layered in – through reliable service, consistent messaging, transparency in returns and refunds, and responsiveness on the platforms where consumers are active. Brands must also recognise the importance of publicly visible customer interactions. A fast, empathetic reply to a complaint in the comments section may matter more than a million-dollar ad campaign.

Trust, in this context, is not a brand asset; it’s a user experience outcome. And in a market where every interaction becomes a review, the next billion are watching, judging, and sharing – with or without you.

The Battle for the First Page (or First Screen)

For the next billion consumers, the path to purchase doesn’t begin with a browser search – it starts with a scroll. Discovery has shifted from keywords to content, from desktop search bars to full-screen video, and from global search engines to localised social ecosystems. As a result, the first screen – what shows up in a feed, on a homepage, or in a chat group – has become the most valuable real estate in the customer journey.

In Indonesia, 71% of internet users aged 16–24 say they use social media as their primary source for researching brands, according to DataReportal 2024. In Nigeria, that figure is nearly identical. TikTok, Instagram Reels, Facebook Marketplace, and YouTube Shorts aren’t just distractions – they’re digital storefronts where decisions are made in real time, often before a brand’s official website is ever visited. The lines between content, commerce, and community have all but vanished.

And while this trend is visible globally, its intensity in emerging markets is distinct. A key reason: data affordability drives platform choice and usage behaviour. Telecom bundles that include free access to Facebook or WhatsApp often influence which platforms dominate attention. In the Philippines, for example, “Free FB” packages have made Facebook one of the most deeply entrenched platforms in the country’s digital culture – so much so that some users mistakenly believe it is the internet.

The importance of platform-specific strategy can’t be overstated. In Vietnam, product discovery frequently occurs through livestream commerce on TikTok Shop, where real-time interactions foster a sense of authenticity. In Kenya, small businesses routinely post promotions through WhatsApp Status or Telegram channels, bypassing traditional ad formats altogether. In Nigeria, where Twitter (now X) has a strong political and cultural presence, product conversations often unfold in threads filled with memes, humour, and direct audience engagement.

But it’s not just about where brands show up – it’s about how they’re experienced in the moment. Load speed, image optimisation, and mobile UX have a direct impact on trust and retention. According to Google, 53% of mobile users in emerging markets will abandon a page that takes longer than three seconds to load. And that’s not just about tech – it’s about expectations. These consumers are used to fast, seamless, and low-friction digital experiences. Anything less suggests the brand doesn’t understand them.

Just as critically, language and localisation now serve as first impressions. A landing page that defaults to English – or worse, uses awkward machine translations – can signal cultural detachment. By contrast, content tailored in local languages, with region-specific slang and visual references, is seen as a mark of respect and investment. It says: we’re not just here to sell; we’re here to understand.

In a space where attention is both fleeting and fiercely fought over, success no longer goes to the loudest voice or biggest budget. It goes to the most culturally fluent, visually intuitive, and platform-native presence. Winning the first screen isn’t about visibility alone – it’s about resonance.

The Rise of Reverse Aspiration and Quiet Power

Western brands once assumed that success in emerging markets meant becoming aspirational – symbols of modernity and affluence. But for today’s mobile-first generation, the tables are turning. Increasingly, it is not global prestige that earns admiration, but local relevance. In place of overt aspiration, there’s a growing sense of pride in indigenous culture, self-made success, and digital independence. What’s emerging is a quiet power: consumers who no longer seek to imitate the West, but expect brands – foreign and domestic – to meet them on their terms.

Across Southeast Asia and Africa, there’s a perceptible shift from status to substance. In Nigeria, youth are driving a surge in support for homegrown fashion labels like Orange Culture and Ashluxe – brands that blend global aesthetics with distinctly African narratives. A 2023 Euromonitor report found that 64% of Nigerian Gen Z consumers said they prefer to buy local brands that reflect their identity, even when international options are available.

This isn’t limited to apparel. In Indonesia, the halal cosmetics market has seen explosive growth, not merely as a religious preference but as an expression of cultural values. Brands like Wardah and Emina now rival – or outperform – multinational competitors in brand recognition among young women. These brands don’t compete by mimicking Western tropes. They succeed by embedding themselves in the rhythms of local life, from religious observances to beauty standards shaped by regional influencers rather than global celebrities.

The same dynamic is playing out in Vietnam’s tech sector, where local e-wallets like MoMo are outpacing foreign fintech entrants – not because of superior technology but because they better understand the daily behaviours, payment rituals, and security concerns of the Vietnamese consumer. According to a 2023 study by Decision Lab, MoMo enjoys over 60% brand preference among young urbanites, in part due to its partnerships with local merchants and integration into everyday routines like topping up phone credit or paying utility bills.

Meanwhile, global culture is increasingly being shaped by these same markets. Afrobeats, once a niche genre, now tops international charts. Thai skincare routines are influencing global beauty trends. Filipino content creators are gaining global followers on TikTok not because they adapt to global norms, but because they confidently showcase their own. In this way, reverse aspiration is not just a rejection of old hierarchies – it’s an export of influence.

For brands, the lesson is clear: you are not the centre of the story. Consumers no longer measure themselves against your brand identity. Instead, they measure your brand against their values, communities, and cultural fluency. Products must be flexible, not fixed; branding must adapt, not dictate.

The rise of reverse aspiration doesn’t signal hostility toward global brands – it signals maturity. These consumers aren’t trying to join the global mainstream. They are the mainstream – digitally savvy, culturally proud, and shaping the conversation on their own terms. And they expect brands to understand that before making their pitch.

Strategies to Earn Attention and Trust

Capturing the attention of the next billion is not a matter of flashy creative or inflated ad budgets. These consumers are deliberate and discerning, quick to disengage from brands that don’t meet their standards or speak their language – both literally and figuratively. Trust is not a funnel; it’s a framework. And it requires consistent, intentional action across every touchpoint.

1. Hyper-localisation isn’t optional – it’s foundational.
For emerging market consumers, brand credibility is tightly linked to cultural fluency. It goes beyond simple translation to a full embrace of local values, references, and usage contexts. In Vietnam, the delivery app Baemin differentiated itself by infusing its platform with witty Vietnamese slang, inside jokes, and hyper-specific product categories – earning loyalty not through function, but through cultural intimacy. In Kenya, Safaricom’s M-Pesa succeeded not just as a mobile payments tool, but because it was built around the realities of an unbanked population, with offline integration and SMS functionality that anticipated connectivity challenges.

2. Trust is built in the micro-moments.
In high-trust economies, consumers might forgive a misstep. In low-trust markets, every interaction matters. A delayed delivery, a missing refund, or a slow response to a query can permanently damage perception. In Indonesia, beauty brand Sociolla won favour by offering guaranteed authentic products, tracked delivery, and a no-hassle return policy – features that directly addressed consumer anxieties in a market flooded with counterfeits. Transparency, speed, and customer service are not operational choices; they are brand positioning strategies.

3. Community voices trump corporate messaging.
The age of the polished brand ambassador is fading. Peer influence, especially from micro-influencers and everyday content creators, now holds more sway. These are people with modest followings but high engagement, often speaking in native dialects or regional slang. In the Philippines, Shopee’s partnership with grassroots creators in smaller cities – rather than national celebrities – helped drive adoption among new internet users. Brands that co-create with local voices, elevate real customer stories, and share behind-the-scenes content signal a level of openness that consumers find relatable and reassuring.

4. Simplification drives conversion.
The mobile-first mindset means consumers expect streamlined interfaces, fast-loading pages, and frictionless payment processes. The most successful brands eliminate barriers rather than adding features. In India, Meesho – a platform that allows users to resell products through WhatsApp and Facebook – gained explosive traction not by competing on price or product, but by simplifying commerce to match the rhythms of informal entrepreneurship. Especially in markets with lower digital literacy or inconsistent connectivity, simplicity is not just convenient – it’s empowering.

5. Offer real value, not just marketing.
Beyond product benefits, brands that offer utility, knowledge, or community are more likely to earn sustained engagement. During the pandemic, Vietnam’s Vinamilk launched a nutrition education series across Facebook Live, fronted by local pediatricians and nutritionists. The effort was not overtly commercial, but it positioned the brand as a trusted source in a time of uncertainty – building long-term brand equity. Similarly, in Africa, MTN’s “Y’ello Hope” campaign provided remote learning support and free data for health workers, deepening brand connection far beyond mobile service.

6. Show up where it matters – and stay.
Too often, international brands treat emerging markets as seasonal experiments, testing campaigns without long-term investment. But consistency is critical. Consumers notice who’s around during key holidays, national events, and crises – and who disappears when results don’t come quickly. Building trust means being present, listening actively, and responding quickly, even when it’s not convenient. It means moving from transactional to relational.

Attention and trust are hard-won in these markets – but not impossible. Brands that succeed will be those that listen before speaking, localise without diluting, and deliver value at every step. It’s not about cracking a code – it’s about showing up, with respect, relevance, and reliability.

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What the Next Billion Means for Global Strategy

The next billion consumers will not just change where companies grow – they will fundamentally reshape how companies think. For too long, emerging markets have been treated as the final frontier for global brands – places to extend reach and scale after success was achieved elsewhere. That model is not only outdated; it’s strategically short-sighted.

In markets like Vietnam, Kenya, and the Philippines, consumer expectations are being forged under entirely different conditions: mobile-first access, economic volatility, rapid urbanisation, and a deep mistrust of centralised systems. The result is a set of behaviours that are more adaptive, more sceptical, and often more innovative than those seen in mature markets. Consumers here are not merely catching up – they are setting new standards.

Rather than viewing these markets as extensions of Western playbooks, companies should see them as innovation testbeds. Take mobile commerce: features like embedded payments, one-click checkout via messaging apps, or app-free transactions are not novelties – they are necessities driven by constraints around bandwidth, infrastructure, and financial inclusion. Yet these same constraints are producing solutions that may become best practices globally.

Similarly, platform design in these regions often centres on immediacy, low data consumption, and local integration. Global teams should be asking: What can we learn from the success of super apps in Southeast Asia? From the rise of voice notes and vernacular language content in India? From trust mechanics built into informal commerce networks across West Africa? These are not fringe behaviors – they are indicators of where global user expectations are headed.

The ability to operate in these ecosystems requires more than translation. It demands cultural intelligence, operational flexibility, and a long-term mindset. Localisation must move beyond interface tweaks to encompass everything from payment methods and logistics to influencer partnerships and community engagement. A product launch is no longer the finish line; it’s the beginning of a multi-year trust-building process.

This shift calls for investment – not just in marketing – but in on-the-ground research, in building local teams with decision-making power, and in systems that can adapt quickly to feedback loops. The brands that will thrive are those that listen early, prototype fast, and refine continuously. That’s not reactive – it’s resilient.

The next billion are not waiting to be discovered. They are already online, already informed, already choosing. But they are choosing carefully. Their loyalty isn’t earned by reputation – it’s earned by repetition: consistent delivery, relevance, and respect over time.

What we’re seeing isn’t a short-term trend – it’s a structural redefinition of what global success looks like. And in this new equation, the old formulas – centralised control, broad generalisations, and push marketing – no longer hold. The competitive edge will belong to those who approach these markets not as territories to conquer, but as partners in evolution.

Because when consumers are multilingual, mobile-first, and mistrustful by design, brand engagement becomes a privilege – not a right. The challenge is not whether companies can reach them. It’s whether they can rise to meet them.

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Exchanging pre-owned goods has been a cornerstone of human commerce, from ancient bartering systems to modern marketplaces. The age-old practice has evolved into a booming global second-hand market, prompting brands to rethink their strategies as sustainability and value drive consumer choices. 

Understanding the Second-Hand Market

The second-hand market, also known as the resale or pre-owned market, involves the buying and selling previously owned goods. This market spans many products, including clothing, electronics, furniture, and vehicles, offering consumers access to items at prices typically lower than new equivalents. The rise of digital platforms has significantly expanded this market, making it more accessible and organised.

Types of Second-Hand Marketplaces

The proliferation of these diverse platforms has not only made second-hand shopping more accessible but has also contributed to its growing acceptance and popularity among a broad spectrum of consumers.

  • Thrift Stores and Charity Shops are physical retail locations where donated goods are sold to support charitable causes. These stores offer a variety of items, from clothing to household goods, at affordable prices.
  • Consignment Shops are retailers that sell items on behalf of owners, providing them with a percentage of the sale price once the item is sold. This model is common for higher-end goods, such as designer clothing and accessories.
  • Online Marketplaces: Digital platforms where individuals and businesses can list and purchase pre-owned items. Examples include eBay, Poshmark, and Depop, which have become increasingly popular due to their convenience and extensive reach.
  • Specialised Second-Hand Platforms: Niche marketplaces focusing on specific product categories, such as electronics or luxury goods. For instance, Back Market specialises in refurbished electronics, providing consumers with vetted, high-quality used devices.

Drivers of the Second-Hand Market Surge

Several key factors propel the rapid expansion of the second-hand market:

  • Economic Considerations: Amidst global economic uncertainties and rising living costs, consumers increasingly seek cost-effective alternatives to new products. In the United States, the second-hand apparel market was valued at $43 billion in 2023, reflecting a 10.3% increase from the previous year.
    This growth indicates a significant shift towards more affordable shopping options.
  • Sustainability and Environmental Impact: A heightened awareness of environmental issues has led consumers to adopt more sustainable consumption habits. Purchasing second-hand clothing reduces carbon emissions by an average of 25% compared to buying new items.
    This eco-conscious mindset is particularly prevalent among younger generations, with 42% of global consumers aged 18 to 37 willing to purchase second-hand apparel as of 2021.
  • Digital Integration and Convenience: The proliferation of online resale platforms has revolutionised the accessibility and convenience of second-hand shopping. In 2023, online resale accounted for 46.5% of the U.S. second-hand market, amounting to $20 billion in sales.

    Platforms such as ThredUp, Poshmark, and The RealReal have streamlined the process of buying and selling pre-owned items, attracting a diverse and tech-savvy consumer base.

These factors collectively contribute to the dynamic growth of the second-hand market, reshaping consumer behaviour and retail strategies globally.

Strategic Implications for Brands

The surge in second-hand shopping presents both challenges and opportunities for brands. To navigate this evolving landscape, companies can consider the following strategies:

  • Integrate Resale into Business Models
    • Branded Resale Platforms: Establishing in-house resale channels allows brands to maintain control over the customer experience and product authenticity. For instance, Patagonia’s “Worn Wear” program encourages customers to trade in used items for credit, promoting product longevity and sustainability.
      Partnerships with Resale Platforms: Collaborating with established resale marketplaces can expand a brand’s reach. Alexander McQueen’s partnership with Vestiaire Collective enables customers to sell pre-owned items back to the brand in exchange for store credit, fostering a circular economy.
  • Redefine the Value Proposition of New Products
    • Emphasise Quality and Longevity: Highlighting the durability and timeless design of products can justify the investment in new items.
    • Sustainable Practices: Adopting eco-friendly materials and ethical production methods can appeal to environmentally conscious consumers.
  • Enhance Customer Engagement
    • Trade-In Incentives: Offering credits or discounts for returning used items can encourage repeat purchases and strengthen brand loyalty.
    • Educational Campaigns: Informing consumers about the environmental benefits of purchasing new, sustainably produced items can influence buying decisions.

Global Perspectives: Eastern vs. Western Second-hand Goods Markets

The second-hand market’s expansion manifests differently across regions, influenced by cultural, economic, and technological factors. Understanding these distinctions is crucial for brands aiming to navigate and capitalise on the global resale economy.

Western Markets

In Western countries, the surge in second-hand shopping is primarily driven by sustainability concerns and economic considerations. Consumers are increasingly eco-conscious, seeking to reduce waste and carbon footprints by purchasing pre-owned goods. The proliferation of digital platforms like ThredUp, Depop, and Vinted has democratised access to second-hand items, making it convenient for consumers to buy and sell used goods. This shift is also influenced by a growing desire for unique, vintage pieces that allow for personal expression.

Asian Markets

In contrast, Asian markets exhibit unique dynamics in the second-hand sector:

  • Japan: The Japanese second-hand market has seen significant growth, with the domestic market for used goods nearly doubling 2010 to 2022.
    This expansion is partly due to the popularity of flea market apps like Mercari, which have made buying and selling used items more accessible. Additionally, younger generations, referred to as “reuse natives,” are more inclined toward second-hand shopping, driven by economic factors and a cultural appreciation for high-quality, well-preserved goods. However, this trend has raised concerns about its impact on Japan’s GDP, as second-hand transactions do not contribute to producing new goods.
  • China and Korea: A comparative study of second-hand clothing consumption in China and Korea reveals that both countries have experienced growth in this sector, particularly among millennials and Gen Z. In China, platforms like “Xianyu” have become popular. Cultural factors, economic conditions, and technological advancements influence consumer behaviour in these markets, with a notable shift from viewing second-hand shopping as a necessity for low-income households to a trendy, value-driven choice among younger consumers.

Implications for Brands

Brands must recognize and adapt to these regional nuances:

  • Tailored Strategies: Develop region-specific approaches considering local cultural attitudes toward second-hand goods. For instance, emphasising product longevity and quality in Japan can resonate with consumers who value well-maintained items.
  • Platform Partnerships: Collaborate with popular local resale platforms to reach a broader audience. Understanding the preferred platforms in each region allows brands to effectively engage with consumers in those markets.
  • Cultural Sensitivity: Acknowledge and respect the cultural factors influencing second-hand shopping behaviours. Incorporating culturally relevant narratives can enhance brand authenticity and appeal.

By aligning strategies with regional characteristics, brands can effectively navigate the global second-hand market, fostering growth and consumer loyalty across diverse markets.

Generational Differences in Second-Hand Shopping

The surge in second-hand shopping is not uniform across all age groups. Understanding these variations is crucial for brands aiming to effectively engage diverse demographics.

Generation Z (Born 1997–2012)

Gen Z exhibits a strong inclination toward second-hand shopping, driven by both economic and environmental considerations:

  • Prevalence of Second-Hand Purchases: A significant 83% of Gen Z consumers have either purchased or are interested in purchasing second-hand apparel, surpassing the average for all age groups by 10.7%.
  • Economic Motivation: Approximately 64% of Gen Z individuals engage in second-hand shopping primarily to save money.
  • Sustainability Concerns: Environmental consciousness plays a pivotal role, with 36% of Gen Z consumers purchasing second-hand goods to reduce their ecological footprint.

Millennials (Born 1981–1996)

Millennials also demonstrate a robust engagement with the second-hand market, influenced by financial prudence and a desire for unique items:

  • Regular Participation: Approximately 29.7% of second-hand apparel shoppers in the U.S. are aged between 25 and 34, indicating active involvement in the resale market.
    Financial Considerations: Economic factors are a significant driver, with many Millennials seeking value for money through second-hand purchases.
  • Unique Finds: Millennials’ pursuit of distinctive and vintage items motivates them to explore second-hand options, aligning with their preference for personalised and authentic products.

Generation X (Born 1965–1980) and Baby Boomers (Born 1946–1964)

While engagement is comparatively lower among older generations, there is a growing interest in second-hand shopping:

  • Participation Rates: Consumers aged 35 to 44 constitute 23.8% of second-hand apparel shoppers, while those aged 45 to 54 and 55 to 64 represent 16.6% and 11.8%, respectively.
  • Barriers to Adoption: Older consumers may face challenges such as perceptions of lower quality or concerns about the condition of second-hand goods, which can deter participation.

Implications for Brands

Recognising these generational nuances enables brands to tailor strategies effectively:

  • Targeted Marketing: Crafting messages that resonate with each generation’s motivations, such as emphasising sustainability for Gen Z and value for money for Millennials, can enhance engagement.
  • Diverse Platform Utilisation: Leveraging platforms favoured by different age groups, including social media channels for younger consumers and more traditional outlets for older demographics, ensures a broader reach.
  • Product Assortment and Quality Assurance: Offering a curated selection of high-quality second-hand items can address concerns about product condition, particularly among older consumers, fostering trust and encouraging participation.

By aligning strategies with each generational cohort’s distinct preferences and concerns, brands can effectively navigate the expanding second-hand market and cultivate a loyal, diverse customer base.

Case Study: thredUP’s Strategic Expansion in the Online Second-Hand Apparel Market


Image Credit: Dressember

Founded in 2009, thredUP has emerged as a leading online consignment and thrift store specialising in women’s and children’s apparel. The company’s innovative approach has significantly influenced the second-hand clothing industry, promoting sustainable fashion consumption.

Business Model and Growth

thredUP offers a user-friendly platform where individuals can buy and sell pre-owned clothing. Sellers send in their items using a “Clean Out Kit,” and thredUP manages the entire process, including quality inspection, photography, pricing, and listing. This managed marketplace model ensures a seamless experience for sellers and buyers, contributing to the company’s rapid growth. By 2021, thredUP had processed over 100 million unique second-hand items, underscoring its substantial impact on promoting circular fashion.

Technological Advancements

To support its expanding operations, thredUP has invested in technological infrastructure. In 2017, the company transitioned to Kubernetes for container orchestration, enhancing scalability and deployment efficiency. This shift reduced hardware costs by 56% and decreased deployment times by approximately 50%, enabling faster innovation and improved customer service.

Strategic Partnerships and Market Expansion

Recognising the potential of the resale market, thredUP launched its “Resale-as-a-Service” (RaaS) program, partnering with major retailers like Gap and Walmart. This initiative allows brands to offer second-hand options to their customers, integrating sustainability into their business models and expanding thredUP’s reach. The RaaS program has positioned thredUP as a pivotal player in the broader retail ecosystem, facilitating the adoption of circular fashion practices.

Financial Milestones

thredUP’s innovative strategies have attracted significant investment, with over $130 million in venture capital raised by 2016. This financial backing has supported the company’s technological upgrades, market expansion, and strategic partnerships, solidifying its position as an online second-hand apparel market leader.

thredUP’s success exemplifies how embracing technology, fostering strategic partnerships, and promoting sustainability can drive growth in the second-hand apparel industry. As the market continues to evolve, thredUP’s model offers valuable insights for brands seeking to navigate and capitalise on the burgeoning resale economy.

Final Thoughts

The meteoric rise of the second-hand market is redefining the global retail landscape, driven by consumers’ increasing emphasis on sustainability, affordability, and unique product offerings. This shift is not merely a transient trend but a fundamental change in consumption patterns, compelling brands to reassess and adapt their strategies.

Embracing the resale economy offers brands many benefits, including access to new customer segments, enhanced brand loyalty, and contributions to environmental sustainability. The growing influence of Gen Z consumers, who prioritise ethical consumption and digital engagement, underscores the necessity for brands to innovate continually and align with these evolving values.

Brands that proactively incorporate second-hand offerings into their business models emphasise product durability, and engage authentically with consumers are poised to thrive. The second-hand market is not just an alternative; it is becoming a cornerstone of modern retail strategy, reflecting a broader societal move toward conscious and circular consumption.

As the lines between new and pre-owned continue to blur, the imperative for brands is clear: adapt to the changing tides of consumer behaviour or risk being left behind in a rapidly evolving marketplace.

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In a bustling market in Lagos, 26-year-old Aisha scrolls through Instagram, weighing whether to buy a locally made dress promoted by an influencer. The brand has no website, just a WhatsApp number for orders. With a few taps, she messages the seller, confirms the price, and arranges for cash-on-delivery. In markets like Nigeria, social commerce is leapfrogging traditional e-commerce. Shoppers don’t browse sleek e-commerce websites; they buy through Instagram DMs, Facebook groups, and TikTok live streams. The brands that fail to adapt to this reality risk missing out on the next billion consumers.

The numbers reveal an undeniable shift in global commerce. E-commerce sales are projected to grow from $5.13 trillion in 2022 to $8.09 trillion by 2028, driven by an influx of new consumers from high-growth regions. China and the United States still lead in online retail, contributing over $2.32 trillion in sales in 2023, but the real transformation is happening in emerging economies like India, Indonesia, Nigeria, and the Philippines. Here, mobile and social commerce has become the foundation of digital retail.

For brands, the challenge is not just expansion; it’s reinvention. These new consumers don’t shop the way the first billion did. Over 80% research products online using search engines, social networks, and short-form videos, while 76% rely on social validation – likes, influencer recommendations, and customer reviews – before making a purchase. Yet, nearly half of the world’s largest consumer brands still lack a presence in these emerging markets, leaving a vast opportunity for those willing to rethink their approach.

But being present is not enough. The next billion shoppers favour social commerce over traditional e-commerce, engage with brands through messaging apps rather than websites, and expect seamless digital experiences across devices – even in regions where internet access is unreliable. They are also fiercely value-conscious, prioritising flexible payment methods like digital wallets and cash-on-delivery, options many global brands still fail to support.

Yet, many companies still operate with outdated digital commerce models built for Western markets. Global brands risk losing ground to more agile, regionally dominant competitors without rethinking payment systems, embedding social commerce, and optimising for mobile-first experiences.

The next billion shoppers aren’t waiting for brands to catch up. The only question is: Are brands ready for them?

Who Are the Next Billion Shoppers?

A 22-year-old university student buys skincare products in India through a WhatsApp group chat. In Nairobi, a young entrepreneur sells handmade jewellery on Facebook Marketplace, coordinating payments through mobile money. Across emerging markets, consumers bypass traditional e-commerce models, turning to social-first, mobile-driven shopping experiences that global brands have barely begun to tap into.

These next billion digital consumers – predominantly in India, Indonesia, Nigeria, the Philippines, Egypt, and Kenya – are young, mobile-first, and digitally fluent. Internet access is expanding at an unprecedented pace, fueling a seismic shift in global commerce. Yet, many brands still fail to understand how these shoppers think and behave.

What sets them apart is how they shop. Unlike their Western counterparts, they favour informal, platform-driven commerce over conventional e-commerce sites. Social media, messaging apps, and peer-to-peer networks aren’t just places to connect; they are marketplaces, customer service hubs, and payment portals. A single Instagram post can trigger thousands of transactions, with sellers coordinating payments and deliveries through direct messages.

But logistical and economic challenges shape their habits. Cash-on-delivery remains dominant in many of these markets, and mobile data costs influence browsing behaviour. Poor infrastructure in rural areas means last-mile delivery is unreliable, forcing consumers to adapt. In response, brands leverage micro-fulfillment centers, regional payment apps, and social commerce strategies to bridge these gaps.

By 2030, these emerging digital consumers will drive global e-commerce revenues past $8 trillion. But brands that attempt a one-size-fits-all approach will fail. To succeed, companies must embed themselves into local digital ecosystems, rethink payment and fulfilment strategies, and embrace how these consumers already shop or risk becoming irrelevant in these emerging markets.

Digital Access Is No Longer a Barrier—But Trust and Infrastructure Are

On paper, the e-commerce revolution in emerging markets looks unstoppable. Smartphone penetration is soaring, digital payment systems are growing, and mobile data is cheaper than ever. But inside a small shop in Jakarta, 28-year-old Rizky still hesitates before clicking ‘buy’ on an Instagram ad.

“The products look good, but I’ve been scammed before,” he says, scrolling through the comments. “What if it never arrives? Or worse, what if it’s fake?”

Rizky’s concerns reflect a broader reality: while digital adoption is rising, trust remains one of the biggest barriers to e-commerce growth. Counterfeit goods, poor customer service, and unreliable delivery services have made many consumers sceptical. Even in fast-growing online markets, many prefer cash transactions or in-person shopping rather than risk a bad purchase.

Payments are another obstacle. While fintech solutions are expanding, millions of consumers remain unbanked or underbanked. In Nigeria and India, cash-on-delivery still dominates, yet many global brands continue pushing credit card-based payment systems. In a region where platforms like GCash in the Philippines, Paytm in India, and M-Pesa in Kenya have become standard, brands that fail to offer these options risk losing sales entirely.

Then there’s last-mile delivery, or the lack of it. In rural Indonesia and sub-Saharan Africa, poor infrastructure means packages take weeks to arrive – if they make it at all. Some brands have adapted, partnering with hyper-local delivery networks or setting up pickup hubs in community centres and convenience stores. Others still operate with rigid, one-size-fits-all supply chains that don’t work in these markets.

The lesson is clear: digital access alone won’t drive e-commerce success. Winning over the next billion shoppers requires more than just an internet connection; it demands localised payment solutions, seamless returns, and a serious investment in trust-building. Without these, even the best-designed digital strategies will fall flat.

How Brands Can Win the Next Billion Shoppers

In Manila, a small fashion retailer went from selling 50 dresses a month to 500 without launching a website. Instead, its business runs through Facebook Live sales and TikTok videos, where customers comment “Mine” to claim an item and settle payments via digital wallets. Across emerging markets, this is the new normal.

For global brands, the lesson is clear: scaling into high-growth digital markets requires far more than a translated website or a localised ad campaign. The next billion shoppers aren’t waiting for brands to find them on corporate e-commerce platforms – they’re already buying where they spend their time: social media, messaging apps, and peer-to-peer networks.

Yet, many Western brands still treat these channels as secondary sales tools rather than primary retail ecosystems. In Indonesia, Nigeria, and the Philippines, more than half of digital shoppers prefer buying through social media rather than traditional e-commerce websites. Brands that expect customers to visit standalone online stores are missing the point, as these shoppers expect brands to meet them where they already are.

That shift is forcing a rethink of engagement strategies. Live shopping, influencer-driven commerce, and peer recommendations have overtaken static product listings and website browsing. In China, where social commerce surpasses $500 billion annually, global brands have had to completely restructure their sales channels to compete with domestic players that integrate commerce seamlessly into entertainment. The same transformation is sweeping Southeast Asia, Africa, and Latin America.

But selling in these markets requires more than just showing up. AI-driven personalisation is now a competitive necessity, not a luxury. Machine learning models are helping brands optimise pricing, tailor product recommendations, and automate language localisation – yet many companies still fail to adjust their messaging, relying on generic campaigns that don’t resonate.

Language and cultural nuance can make or break a sale. While English is widely used in business, most consumers prefer to shop in their native language, engage with familiar imagery, and trust local influencers over foreign celebrity endorsements. Brands that get this right, like Coca-Cola and Unilever, see stronger conversion rates and long-term loyalty. Those that don’t risk alienating their audience before they even make it to checkout.

Simply put, what worked in established e-commerce markets won’t work here. Successful brands embed themselves in local digital ecosystems, embrace social-first shopping, and design their experiences around how consumers already buy, not how brands want them to buy.

Who Controls the Future of E-Commerce? Local Platforms Are Winning

When Indonesian beauty brand Somethinc wanted to expand online, it didn’t launch its website. Instead, it built its entire e-commerce strategy around Shopee and TikTok Shop, running daily flash sales and live-streaming product tutorials. The result? A 10x sales increase within months, driven entirely by social commerce and regional marketplaces.

Somethinc’s story isn’t unique. Across emerging markets, the next billion shoppers aren’t discovering products through branded websites; they’re buying from super apps, social media platforms, and dominant regional marketplaces. For global brands, winning these markets means playing by new rules where local giants, not Western e-commerce behemoths, set the terms of engagement.

The Power Shift: Regional Marketplaces vs. Global E-Commerce Giants
For years, companies like Amazon and Alibaba have defined global e-commerce. But that dominance is fading in Southeast Asia, Africa, and Latin America. Platforms like Shopee, Jumia, and MercadoLibre have become the default shopping destinations, offering localised logistics, digital wallet integrations, and cash-on-delivery options that global brands struggle to replicate.

The numbers tell the story. In China, social commerce sales surpassed $500 billion, with platforms like Douyin (China’s TikTok), Xiaohongshu, and WeChat driving transactions entirely within their ecosystems. The same model is now spreading across Indonesia, Nigeria, and Mexico, where more than half of online shoppers prefer purchasing directly through social media.

Yet, many Western brands still treat these marketplaces as secondary sales channels rather than core business platforms. In India, Flipkart and Myntra dominate e-commerce for fashion and electronics, while Tokopedia in Indonesia has built a hyper-localised supply chain that global competitors can’t match. Simply listing products on these platforms is not enough – brands must actively invest in platform-specific strategies, native advertising, and localised engagement.

Why Direct-to-Consumer Models Are Struggling
For decades, DTC strategies helped brands build direct relationships with consumers. But DTC isn’t the future in emerging markets; it’s a limitation. Brands that cling to standalone e-commerce sites are losing relevance as shoppers expect frictionless transactions within the platforms they already use.

Even in Western markets, the shift is happening. TikTok Shop’s expansion into the U.S. and U.K. signals a major shift in commerce dynamics – one that mirrors the e-commerce revolution already unfolding in Asia and Africa. The next billion shoppers won’t be navigating company websites – they’ll be purchasing inside their favourite apps.

The message is clear: The future of e-commerce belongs to platforms that seamlessly blend social engagement, localised logistics, and frictionless transactions. The brands that adapt to this reality – rather than trying to control it – will be the ones that capture the next wave of global consumers.

How Global Brands Can Win in the Next Billion Market

In India, fast-fashion brand Ajio doesn’t just sell online; it has redefined mobile-first commerce. Instead of relying on traditional e-commerce websites, it built its entire sales strategy around WhatsApp-based shopping, integrating local payment options and live-chat support for consumers who prefer conversational commerce. The approach has been so successful that WhatsApp shopping now drives a significant share of its sales in smaller cities and rural areas.

For global brands, this is the future of e-commerce, requiring a radical shift in strategy. Companies that treat these new markets like extensions of the West will struggle. Those that understand the unique behaviours, expectations, and challenges of the next billion consumers will dominate.

Here’s how brands can compete effectively in these emerging digital economies:

  • Market Research Can’t Be an Afterthought

Global strategies often fail because they assume all emerging markets behave similarly. Shopping habits, payment preferences, and brand trust vary drastically between Jakarta, Lagos, and Manila. Companies that skip deep, localised market research often launch with the wrong pricing models, payment options, and messaging that doesn’t resonate.

Many brands have learned this the hard way. Walmart’s struggles in India stemmed from misunderstanding local retail behaviours, forcing the company to pivot from a direct e-commerce approach to acquiring Flipkart. In contrast, brands like P&G and Coca-Cola invest heavily in country-specific consumer insights and have successfully built strong footholds in these markets.

  • Think Beyond Translation – Create Market-Specific Storytelling

Localisation isn’t just about translating a global campaign into another language; it’s about understanding cultural nuances. Consumers in India, Indonesia, and Nigeria engage with storytelling differently than shoppers in New York or London.

Nike’s Southeast Asian marketing campaigns, for instance, don’t just feature global athletes. They include local sports icons and culturally relevant narratives, tapping into national pride and regional sports culture. This approach has driven significantly higher engagement than generic Western-focused messaging.

  • Build for Mobile-First, Low-Bandwidth Markets

In many emerging economies, the mobile phone is the only device people use to access the internet. More than 90% of internet users in these markets are mobile-exclusive, and many are on low-bandwidth connections.

That’s why progressive web apps (PWAs) and lightweight mobile sites outperform heavy, Western-style e-commerce platforms. Companies like Jumia in Africa and Tokopedia in Indonesia have invested in fast-loading mobile interfaces, ensuring that even consumers in low-data regions can shop seamlessly.

  • Payment and Fulfillment Must Be Localised

Credit cards are not the default in these markets. In India and the Philippines, cash-on-delivery remains a dominant payment method. In Kenya, M-Pesa is the standard for digital transactions. In China, QR-code-based WeChat Pay and Alipay drive nearly all online purchases.

Western brands that only integrate credit card checkouts exclude millions of potential customers. Companies that tailor their payment options—as Apple did by adding UPI payments in India—win consumer trust and adoption faster.

  • Social Commerce Is Now the Default, Not an Add-On

Social media isn’t just a marketing tool in emerging economies; it is the storefront. More than half of digital shoppers in Indonesia and Nigeria buy directly through social platforms, often engaging with brands through WhatsApp, Instagram, or Facebook groups.

Live-stream shopping is also exploding in popularity. Approximately 50% of the country’s internet users in China utilised live commerce in 2023. This model is quickly expanding across Southeast Asia and Latin America. Brands that ignore this trend risk losing to local sellers who understand the nuances of peer-driven shopping.

  • Logistics and Trust Are the Make-or-Break Factors

Selling a product is one thing. Getting it to the customer reliably is another.

Brands like Shopee and Jumia have gained an edge because they built extensive last-mile delivery networks, partnering with local couriers, pickup hubs, and even motorcycle taxi fleets to ensure orders arrive on time. Amazon, by contrast, struggled in markets like India because it initially relied on its Western fulfilment model rather than adapting to local infrastructure.

Trust is also a challenge. Consumers rely heavily on peer reviews and seller reputations before purchasing in markets with high counterfeit product risks. That’s why platforms like Tokopedia and Shopee have built-in buyer protection policies, a feature that global brands must adopt to compete.

The Time to Adapt Is Now

The next billion shoppers are reshaping digital commerce faster than most global brands can keep up. But this shift isn’t just about adding new markets to existing playbooks. It requires a fundamental change in how brands operate, engage, and build trust.

The companies that embed themselves into local digital ecosystems rethink their approach to payments and fulfilment and leverage social commerce as a primary – not secondary – strategy that will lead the next era of global retail. The rest? They’ll be playing catch-up.

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On a humid Friday evening in Bangkok, a 29-year-old marketing executive taps through her banking app. She’s just paused her subscription to a second-tier streaming platform and declined an invite to a weekend brunch. But on her walk home, she stops at the Dior counter and buys a lipstick she’s been eyeing for weeks. It’s the one indulgence she’s allowed herself this month. “I cut back on everything else,” she tells a colleague. “This just makes me feel like me.”

Her behaviour isn’t an anomaly – it’s a signal. Around the world, consumers are quietly renegotiating the terms of luxury. While macroeconomic forces push people to trim budgets, many are still carving out space for small, strategic indulgences. Austerity no longer looks like elimination; it looks like prioritisation.

Call it frugal luxe, quiet indulgence, or strategic spending – this is not irrational behaviour but a recalibrated consumption model shaped by the emotional utility and financial realism. Consumers are trading down in broad categories – opting for private-label groceries, reducing ride-hailing use, cancelling entertainment bundles – yet they’re unwilling to let go of the symbols that anchor identity, aspiration, or routine.

The global backdrop is undeniable: inflation remains sticky in many economies, wages are lagging, and discretionary income is under strain. In the U.S., the consumer savings rate hovers below pre-pandemic norms. In Southeast Asia, rising living costs are altering middle-class consumption. In the U.K., nearly half of adults report having to cut back on non-essential purchases. And yet, prestige beauty sales are rising. High-end skincare, fragrance, and entry-point luxury fashion continue to perform.

This isn’t a contradiction. It’s a redefinition of value. And the brands that thrive in this moment won’t be those who offer the cheapest price – but those who understand the psychology of what consumers are still willing to pay for.

Because in an era of smarter spending, winning share of wallet means first earning a place in the consumer’s hierarchy of emotional needs.

The Rise of Frugal Luxe – A Global Snapshot

What began as anecdotal “lipstick effect” spending has evolved into a full-fledged global pattern: consumers are not abandoning consumption – they’re curating it. The frugal luxe mindset is not about depriving oneself, but about making deliberate, emotionally resonant choices under constraint.

Across geographies, data shows a clear shift. McKinsey’s 2024 Global Consumer Sentiment Survey found that 72% of consumers across developed and emerging markets report adjusting their spending behaviours, with the most common action being the substitution of high-cost items for lower-cost alternatives – except in categories they deemed “self-care” or “identity-reinforcing.” In Southeast Asia, a Bain & Company study noted that while middle-class households are spending less on dining out, they are spending more on skincare, small electronics, and niche fashion – categories where brand and aesthetic still hold value. In the U.S., prestige beauty grew 14% year-over-year in 2023, even as overall discretionary spending declined. In the U.K., Boots saw record sales in luxury fragrances priced under £50, many sold alongside budget groceries.

This is not a repeat of post-2008 frugality. Then, the consumer response was often to pull back across the board, saving as a virtue. Today’s frugality is more calculated than moralistic – and driven by a more sophisticated understanding of trade-offs. It’s not about saving for saving’s sake; it’s about cutting what doesn’t serve and keeping what does. That distinction is critical.

The economic pressures underlying this shift are real and persistent. Inflation has plateaued but remains elevated in key markets. Real wage growth is marginal. In many urban centres, rent and utility costs are consuming a larger share of monthly income than at any time in the past decade. But consumers are not reacting passively. They are actively reshaping their personal economies, determining where to trade down and where not to compromise.

Crucially, frugal luxe behaviour is not confined to one cohort. Gen Z is driving it with curated shopping habits and value-hunting sophistication, but Millennials and even Gen X are adopting similar strategies. What’s shared is the intentionality. Consumers are no longer passively consuming – they are performing economic self-optimisation, informed by a steady stream of content that frames “smart spending” as a lifestyle.

Platforms like TikTok and Instagram have normalised “dupe culture” – where users show off how they scored a product that looks like luxury but costs a fraction. Yet in the same feed, those same users will unbox a full-priced Diptyque candle or a single-item designer purchase. The message is not “buy less,” it’s “buy selectively.”

Globally, this has begun to reshape categories. In Japan, the longstanding culture of quality-over-quantity spending (known as shinayakana seikatsu) has found resonance with a younger generation of minimalists who still value premium skincare. In India, beauty brands are reporting a decline in full-sized product sales, but a rise in discovery kits and refillables. In Brazil, mid-market fashion is struggling while resale luxury and independent accessories brands thrive.

Across markets, the conclusion is the same: value is no longer binary. It’s not “luxury vs. bargain” – it’s “what justifies its place in my life?” Brands that misread this as simple downtrading risk irrelevance. Those who tune into this nuance will find opportunity – not just to sell more, but to sell smarter.

The Psychology Behind It – Why We Splurge While We Cut

At first glance, the frugal luxe mindset seems contradictory: a consumer balks at a $6 coffee subscription but buys a $75 serum without hesitation. Economically, it’s inconsistent. Psychologically, it’s perfectly rational.

This is where market dynamics intersect with behavioural economics. In times of uncertainty, people tend to seek out control, reward, and reinforcement – especially when broader financial agency feels compromised. These micro-luxuries become not just products, but emotional instruments: ways to reassert identity, regain a sense of choice, and anchor personal value.

Historically, this has played out before. The “lipstick effect” – a term coined during the early 2000s recession and later observed after 9/11 and in the 2008 financial crisis – described how consumers cut back broadly but still spent on small luxury items, particularly in the beauty category. Today’s version is more sophisticated. It’s not just about lipstick. It’s about emotional return on investment.

This is emotional ROI at work: the subconscious calculation consumers make when deciding whether something is “worth it” not just financially, but emotionally. That $75 serum isn’t just skincare – it’s a commitment to self-care. A branded candle isn’t just scent – it’s sanctuary in a chaotic world. These purchases are rarely made out of impulse alone. They’re rationalised, budgeted, even anticipated. In that sense, they offer the predictability that macroeconomic conditions lack.

Research from Deloitte confirms this. In a 2023 global consumer survey, 64% of respondents said they were more likely to buy products that made them feel emotionally secure, even if those products were non-essential. The strongest responses came from younger consumers, who reported using small purchases as a way to cope with financial stress and identity instability. This is less about indulgence, and more about calibration: consumers are rebalancing their mental and emotional portfolios as much as their financial ones.

Psychologists also point to the role of aspirational continuity. Consumers may be delaying larger goals – home ownership, international travel, luxury fashion – but they still want symbols of progress. A small luxury becomes a token of staying on track. This is particularly pronounced in status-driven categories like fragrance, skincare, and branded accessories, where even a single item can carry heavy semiotic weight.

There’s also a visibility factor. In the age of social media, consumer choices are publicly narrated. Selective spending allows people to maintain an aesthetic or aspirational identity while privately cutting costs elsewhere. In effect, frugal luxe is not just a financial strategy – it’s also a performance of resilience.

Understanding this nuance is critical for brand strategists. Consumers are not spending irrationally. They are optimising emotional impact per dollar, seeking meaning, identity, and autonomy through purchases that feel earned – even if they seem extravagant on paper.

For brands, the opportunity lies not in asking, “Will they buy?” but “What role does this play in how they see themselves?”

Case Study: ASAI Hotels and the Art of Intentional Hospitality

Image credit: ASAI Hotels

In a market where consumers are trimming excess but still seeking meaning, ASAI Hotels offers a blueprint for how travel brands can deliver premium experience without premium pricing. Launched by Dusit International in 2020, ASAI was purpose-built for the frugal luxe traveler – those who want design, culture, and quality, but none of the gilded frills.

Instead of scaling luxury down, ASAI redefines it. Properties are lean by design – compact rooms, limited staff, no banquet halls or sprawling lobbies – but everything a modern traveler values is thoughtfully elevated. Beds are comfortable, showers rainfall, Wi-Fi fast. Public areas double as co-working spaces and social hubs. And in a strategic move that’s as cultural as it is commercial, each hotel is embedded in a local neighbourhood, with a restaurant curated by local chefs and partnerships with nearby artisans, vendors, and guides.

This is not budget travel in disguise. It’s travel edited with intention. ASAI’s Bangkok Sathorn location opened with rates under USD $50 – a striking value in one of Asia’s most visited cities – but paired with Michelin-linked cuisine and locally inspired interiors. Guests don’t feel like they’re compromising. They feel like they’ve discovered something smarter.

What sets ASAI apart isn’t just the product – it’s the philosophy. From agile pricing packages to curated local experiences, the brand is engineered for the consumer who’s making trade-offs, but still wants to feel indulgent. Flexible cancellation policies, digital check-in, and concierge-style staff interactions cater to the desire for both control and care.

And it’s working. ASAI properties consistently receive high ratings for value, design, and service. The brand has expanded beyond Thailand into Japan and the Philippines, proving that its blend of affordability and authenticity has cross-border appeal.

In an era where travel is more intentional, ASAI has found the sweet spot: luxury reimagined as locality, quality, and thoughtful restraint. It’s a case study in what happens when hospitality listens closely – not just to how much travelers want to spend, but to what they want that spending to feel like.

Frugal Luxe in Practice – How It’s Changing Beauty, Fashion, and Travel

The frugal luxe mindset isn’t just influencing what people buy – it’s reshaping entire industries in how they develop, price, and market their offerings. Nowhere is this more visible than in beauty, fashion, and travel – sectors that sit at the intersection of identity, aspiration, and everyday ritual.

Beauty: Dupes and Devotion

Beauty is perhaps the clearest expression of frugal luxe in action. Consumers are cutting costs in functional skincare – opting for no-frills, dermatologist-backed drugstore brands – while still spending on hero products and signature scents. The rise of “dupe culture” – where TikTok influencers promote affordable versions of luxury products – hasn’t killed premium beauty. Instead, it has redefined what’s worth paying full price for.

Take Rare Beauty, which straddles affordability and prestige with minimalist packaging and emotionally resonant branding. In Southeast Asia, Korea’s Olive Young chain is thriving by offering shoppers both budget K-beauty staples and cult-favorite luxury imports. Meanwhile, direct-to-consumer platforms like Beauty Pie (UK) allow users to subscribe to access prestige formulas at wholesale prices – frugality without sacrifice.

Sales figures reflect this duality. While mass beauty volumes have remained flat, prestige beauty in the U.S. grew 14% in 2023 – driven not by breadth, but by a focus on high-performing or emotionally charged SKUs. The consumer isn’t buying more. They’re buying more intentionally.

Fashion: Capsule Thinking and Conscious Curating

In fashion, consumers are trading volume for selectivity. Capsule wardrobes – minimalist, mix-and-match collections anchored by a few standout pieces – are on the rise. Luxury resale platforms like Vestiaire Collective and The RealReal are growing in both inventory and credibility, as consumers seek quality without the markup. The resale market is projected to double by 2027, according to ThredUp’s 2024 report.

Brands are adapting. Zara has introduced higher-end “premium” capsules. COS and Arket are elevating materials and tailoring. In Asia, Taobao’s Luxury Pavilion is bridging mainstream ecommerce with designer credibility. The common thread is discretion over display. Quiet luxury, less logo-heavy but still recognisably refined, appeals to a frugal luxe buyer who wants lasting value, not viral novelty.

Fast fashion isn’t dead – but it’s being used differently. Consumers might wear high-street basics for casual or invisible moments, while saving higher-priced pieces for more visible or identity-expressive occasions. Spending is being segmented not by category, but by context.

Travel: Trade-Offs, Not Cutbacks

Even in the travel sector – often the first to be trimmed during downturns – frugal luxe is shifting patterns. Consumers are taking fewer trips, but spending more on personalisation, experience, and wellness. Budget flights are paired with boutique hotels. Three-day getaways are traded up with Michelin-starred meals or spa packages. Travel is no longer about how far, but how meaningful.

Brands are adjusting accordingly. Luxury travel providers are offering shorter packages with high-touch service. Airlines are upselling “premium economy” tiers with lounge access and upgraded meals. The success of Airbnb Luxe and wellness retreats like Aman Essentials shows that even value-conscious travellers are willing to invest – in the experience feels transformative.

Even Google searches reflect the pivot. In 2024, searches for “affordable luxury travel” and “best value boutique hotels” outpaced traditional terms like “cheap flights” or “budget vacations.” The language of frugality is evolving, and so are the offerings designed to meet it.

How Brands Are Adapting – Strategy Shifts Across the Market

Brands that once relied on abundance, visibility, or exclusivity are now being challenged to respond to a consumer who shops with intent, scrutinises value, and mixes luxury with restraint. Frugal luxe doesn’t mean less opportunity – it means demand for sharper, more strategic brand behaviour.

In beauty, fashion, and consumer goods, companies are rethinking not only pricing architecture, but positioning, messaging, and innovation pipelines. Tiered offerings – once used to ladder customers into prestige pricing – are now reversed. Entry-level luxury products are becoming lead sellers, not loss leaders. Dior’s Addict Lip Glow, Chanel’s Les Beiges Water Tint, and Le Labo’s travel-size scents are all examples of luxury distilled into a smaller, more accessible form – without losing cachet.

This has led to a rise in what analysts call “masstige”: prestige aesthetics at mass-market prices. But masstige has matured. It’s no longer about watered-down versions of designer goods. It’s about embedding value signals – ingredient quality, design, performance – into more approachable formats. Think of Glossier’s minimalist packaging, or Uniqlo U’s designer-led capsule collections. Even Apple has leaned into this zone, positioning older iPhone models as aspirational entry points for Gen Z.

Luxury groups are also evolving. LVMH and Kering have emphasised scarcity, small drops, and storytelling – leveraging limited availability over scale. On the other end, mass retailers are racing to elevate their image: Target’s partnership with designer brands, Boots stocking premium beauty, and H&M launching higher-end home collections. Everyone is meeting in the middle, because that’s where the frugal luxe consumer lives.

Pricing strategy is only part of the story. Messaging has also shifted from status to discernment. Ads no longer shout. They whisper – implying intelligence, curation, and insider knowledge. Brands are moving away from overt luxury cues and toward emotional narratives: empowerment, craftsmanship, quiet confidence. This reflects a deeper shift: luxury is no longer about proving wealth. It’s about affirming self-worth in an uncertain world.

Technology is helping brands track these nuances in real time. AI tools allow marketers to test price elasticity across segments, optimise product mix, and personalise offers based on behavioural signals. Subscription data, refill rates, and post-purchase engagement now drive product development cycles more than focus groups. This enables continuous recalibration of what the customer considers “worth it.”

Even loyalty programs are being reimagined. Cashback is no longer compelling. Instead, brands offer early access, customisation, or social recognition. For a frugal luxe consumer, feeling valued is more motivating than saving money.

Some of the smartest adaptations are happening in emerging markets, where middle-class consumers are under greater financial pressure – but no less brand-attuned. In India, Nykaa uses data-driven bundling to pair affordable essentials with aspirational trial-size products. In Vietnam, localised DTC brands position themselves as “premium but practical.” In Mexico, curated marketplace models are growing – offering shoppers a mix of imported luxury and local craftsmanship at frictionless prices.

The core shift is this: consumers are no longer trading down because they’re disengaged from brands. They’re trading strategically because they’re more discerning. To win this audience, brands must think less about price points and more about permission – have you earned the right to be their one splurge?

That’s a higher bar – but a more loyal customer when cleared.

Research and Innovation in the Frugal Luxe Era

To adapt to the frugal luxe consumer, brands need more than instinct – they need precision. The same buyers who once followed broad loyalty patterns are now driven by a mix of psychology, price sensitivity, and emotional return. Understanding where they draw the line between indulgence and excess requires a new kind of consumer insight – one grounded in nuance, not averages.

That’s why the most future-focused brands are turning to agile, continuous research models. Traditional quarterly surveys and segmentation reports can’t keep pace with fast-changing consumer behaviour. Instead, leading companies are investing in longitudinal panels, rapid user testing, and scenario-based modelling to predict what consumers will splurge on next – and what they’ll drop without hesitation.

In beauty, brands like Sephora and Charlotte Tilbury use shopper feedback loops tied to SKU-level sales data to refine product mix in real time. In fashion, resale platforms analyze upload frequency and price elasticity to anticipate consumer fatigue or desire. And in luxury travel, customer journey mapping isn’t just about destinations – it tracks sentiment shifts around personalisation, sustainability, and perceived self-reward.

Beyond product, brands are rethinking innovation itself. Design-to-value models, once reserved for industrial engineering, are now being applied to consumer goods – ensuring that every feature, material, and format in a product serves either performance or emotional payoff. Packaging is lighter, messaging more focused, and hero SKUs are prioritised over bloated portfolios.

This moment also invites rethinking how value is communicated. Research shows that consumers are more likely to buy when they feel “in on the decision” – when the brand speaks to them as collaborators, not targets. That means transparent storytelling about sourcing, science, and savings – not just brand heritage or exclusivity.

In the frugal luxe economy, innovation isn’t about premiumisation for its own sake. It’s about designing products and experiences that feel earned. And the brands that lead won’t be those who guess right – but those who listen smarter.

Frugality as a Lifestyle, Not a Phase

What began as a reactive shift in consumer behaviour is fast becoming a structural one. Frugality is no longer seasonal or circumstantial – it is being integrated into the architecture of daily decision-making. The frugal luxe mindset isn’t a temporary belt-tightening – it’s a new blueprint for value.

In this emerging paradigm, traditional market signals are losing their predictive power. Income is no longer a reliable proxy for spending intent. Brand awareness doesn’t guarantee brand loyalty. Even sentiment data, unless layered with behavioural nuance, risks misdiagnosis. Consumers are more fluid than the models designed to capture them.

For strategists and researchers, this demands a reset. Legacy frameworks built around “value vs. premium” binaries or static personas can’t keep up with a consumer who is simultaneously trading down and trading up – sometimes in the same basket. The next generation of research will need to map micro-intentions: how consumers compartmentalise indulgence, what triggers rationalisation, and which categories become immune to compromise.

Foresight leaders are already shifting from tracking what people buy to decoding why they justify it. That requires not just data but empathetic intelligence – a blend of qualitative depth, contextual listening, and scenario-based modelling that captures the emotional calculus behind the cart.

The question for brands is no longer “how do we sell more?” It’s “how do we matter in a world where fewer things get bought, but those few are chosen with surgical precision?”

Because frugal luxe isn’t just a response to economic pressure – it’s a reflection of cultural evolution. Consumers aren’t retreating. They’re refining. And the brands that rise to meet them will be those that understand the mindset behind the money – not just the movement of it.

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Forever 21 is closing its doors – again. Once the crown jewel of American mall culture, the fast-fashion giant is filing for bankruptcy for the second time in under five years. As shuttered storefronts stretch across the US, its downfall has become more than a brand misstep – a sign that the old fast-fashion model is running out of time.

In its place, a new breed of fashion titans is rising. Shein and Temu, two digital-first platforms with Chinese roots, have turned the industry on its head. Their tools? Artificial intelligence, real-time trend scraping, lightning-fast production, and a hyper-personalized consumer journey. These aren’t just cheap alternatives; they’re smart machines designed for a generation that grew up with TikTok, interactive shopping, and constant trends.

Forever 21’s decline isn’t a singular event. It’s part of a deeper market shift – one where legacy playbooks are being rewritten by code, content, and community. As fashion retail becomes more focused on digital channels, brands that do not change may become outdated and irrelevant.

Forever 21’s Fall Signals a Broken Retail Model

Forever 21’s descent didn’t happen overnight. It was a slow unravelling, a brand once emblematic of youth culture now outpaced by the very consumers it once captivated. At its peak, Forever 21 thrived on trend turnover, sprawling mall spaces, and low prices. But the retail landscape changed, and the brand didn’t.

As digital shopping accelerated and consumer expectations shifted, Forever 21 remained tethered to an outdated model – long production cycles, centralized design decisions, and a heavy reliance on brick-and-mortar foot traffic. Its once-successful approach became a liability. While consumers moved toward immediacy and personalization, the company doubled down on bulk inventory, sluggish turnarounds, and static pricing. It failed to keep pace with the velocity of online trend formation – a pace now dictated not by runways or retail calendars but by social feeds refreshed by the second.

The gap widened as Gen Z entered the market. Raised in an era of choice overload, platform-native shoppers sought brands that moved with them – fluid, responsive, and in sync with their aesthetic sensibilities. Forever 21, by contrast, felt stuck. Its collections lagged behind trends. Its online presence was clunky. It couldn’t deliver the frictionless experience digital-native brands were engineering.

Even attempts at reinvention – rebrands, collaborations, and in-store tech integrations – were often too reactive or off-mark. Market research during this period revealed a steady erosion in brand affinity among younger demographics, who increasingly dismissed mall-based fast fashion as outdated, unoriginal, or environmentally negligent. Once buzzing with teens, the retail floors became quieter, the racks fuller, and the margins thinner.

The retail model that once made Forever 21 a sensation has become outdated. And in an industry that now rewards adaptability over legacy, the brand’s decline underscores a critical truth: fashion doesn’t wait.

Shein and Temu Built a Smarter System

While legacy players like Forever 21 struggled to pivot, Shein and Temu were busy rewriting the rules of engagement. What distinguishes them isn’t just speed – it’s the system beneath the surface, a high-velocity engine built on data, automation, and platform-native behaviour. These brands aren’t retailers in the traditional sense; they’re algorithmic marketplaces fueled by machine learning, social signals, and a relentless feedback loop between consumer demand and product creation.

Inside Shein's fast-fashion model

Shein, in particular, operates more like a tech company than a fashion label. Its infrastructure is designed to detect real-time micro-trends, test new styles in limited batches, and scale only the best performers. Instead of seasonal collections, it drops thousands of SKUs daily – each one a calculated bet based on keyword spikes, user behaviour, and social engagement. What used to take legacy brands months now takes Shein days, with entire production cycles compressed into near real-time manufacturing.

Image Credit: Boffin Coders

Temu is building dominance on a different front. Backed by the e-commerce powerhouse PDD Holdings, its model leans heavily on gamification and bottom-dollar pricing, turning shopping into a behavioural loop. Discounts are dynamic, product discovery is algorithmically engineered, and the platform’s addictive scroll mimics social media architecture. Rather than chasing trends, Temu floods the feed with hyper-targeted inventory based on browsing data, purchase history, and behavioural nudges. Brand storytelling becomes secondary to price, pace, and personalization in this context.

Image Credit: Tech Crunch 

Temu's growth in numbers

Both companies excel at bypassing traditional gatekeepers. Instead of relying on expensive ad campaigns or celebrity endorsements, they tap into the power of peer-to-peer virality. TikTok hauls, influencer codes, and affiliate campaigns do more than drive traffic – they create a cultural moment, making shopping a social performance. The result is a decentralized and infinitely scalable distribution model.

Where traditional fast fashion brands pushed products, Shein and Temu pull consumers into a constantly evolving loop of discovery, validation, and conversion. It’s a model built not on intuition but on information, a data-centric approach that doesn’t just respond to the market but often predicts it.

Speed and Price Now Come with a Cost

But the same mechanisms fueling this meteoric rise are now drawing intensified scrutiny. As Shein and Temu scale at breakneck speed, regulators, watchdogs, and increasingly vocal consumer groups are beginning to question the true cost of their success. Investigations into labour practices, environmental degradation, and product safety are no longer confined to fringe activism; they’re reaching mainstream legislative agendas in the U.S. and Europe.

To soften criticism, Shein recently launched a resale platform in the U.S., positioning it as a circular fashion solution. Branded as a way for consumers to buy and sell secondhand Shein items, the initiative appears, on the surface, to nod toward sustainability. But industry experts and environmental advocates have been quick to call it out. Critics argue that the move lacks substance, pointing out that reselling ultra-low-quality garments does little to counteract the brand’s core business model – one built on volume, disposability, and micro-trend churn. The resale program, some say, is more about optics than impact.

Image Credit: Glossy

This tension highlights a bigger issue in the industry. The European Union has suggested tougher rules for transparency in textile imports, and U.S. lawmakers want more oversight on very cheap goods coming in through de minimis loopholes. These regulatory flashpoints are less about fashion and more about accountability – demanding that platforms operating on mass micro-consumption clarify how and where products are made, under what conditions, and at what environmental cost.

At the same time, cultural sentiment is shifting. What was once dismissed as disposable fashion is becoming a reputational risk. High-visibility criticism from sustainability influencers, investigative journalists, and even former brand collaborators is reshaping the narrative around what it means to shop cheap. For a growing subset of consumers, convenience and cost are no longer blind spots; they’re trade-offs weighed against a rising ethical awareness.

Still, the backlash isn’t yet translating into behavioural change at scale. Most consumers prioritize value and speed, even as they express concerns about sustainability. However, the growing friction between convenience and conscience is opening a critical window. For competitors, this is a signal: the future of fast fashion won’t just be about how quickly brands can produce – it will hinge on how transparently they can operate in a world that’s starting to ask harder questions.

Retailers Must Rethink the Entire Playbook

The road ahead demands a fundamental shift in how fashion brands think, operate, and communicate. Survival won’t come from marginal tweaks to legacy systems but from a reengineering of retail itself – beginning with the supply chain. 

Brands must move beyond cost efficiency and embrace operational intelligence. That means investing in technologies that enable demand sensing, real-time replenishment, and localized micro-manufacturing. Flexibility is no longer optional; it’s the foundation of relevance.

Equally critical is the evolution of pricing strategy. Competing with Shein and Temu on cost alone is a race few can afford to run. Instead, smart pricing – anchored in perceived value, quality assurance, and ethical sourcing – offers a more sustainable path. Consumers may be price-conscious, but they’re also becoming more aware of what pricing signals. Transparency around why a product costs what it does can strengthen trust and justify margins in a way race-to-the-bottom tactics cannot.

The marketing function must also be rebuilt for the algorithmic age. Traditional seasonal campaigns are losing ground to dynamic, always-on storytelling that responds to cultural shifts and consumer moods in real-time. This is where social commerce becomes critical, not as a trend but as infrastructure. Influencers are not just amplifiers; they’re now co-creators, collaborators, and curators of brand identity. Investing in decentralized content strategies, creator partnerships, and community-led design isn’t a nice to have – it’s how brands remain visible in a crowded, scroll-driven marketplace.

Finally, there’s the matter of trust. Authenticity becomes the ultimate differentiator in an ecosystem flooded with low-cost, high-frequency goods. Brands that can demonstrate their values through verifiable action – whether in ESG commitments, labour transparency, or community impact – will carve out a deeper connection with consumers navigating ethics. It’s not about appealing to everyone; it’s about being clear, consistent, and credible in what you stand for.

Guide to Gen Z

The Fast Fashion Reckoning Is Already Here

The fast fashion battleground is no longer about who can flood the market with the most products – it’s about who can navigate a volatile consumer landscape with speed, precision, and purpose. Shein and Temu have exposed the vulnerabilities of legacy brands not just by being faster or cheaper but by building systems attuned to cultural momentum, behavioural data, and the economics of digital attention. But their rise also highlights the limits of optimization when values, trust, and transparency are left out of the equation.

The future belongs to brands that can do both – move at the algorithm’s speed while operating with the discipline of long-term stewardship. Fashion is evolving from a product-based business to a platform-based experience, where relevance is won not once but constantly. For incumbents and challengers alike, this moment is not just a test of resilience. It’s a call to rethink what fashion means in a world where everything can be copied, but not everything can connect.

The rules have changed. What remains is the opportunity for those willing to radically rethink their systems as Shein and Temu have and to act before the next store closes.

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The fastest-growing consumer in the toy industry is not a kid. A new generation of adults is rewriting the rules of play, driving billions in annual sales and reshaping how toy brands approach product development and marketing. These buyers, known as kidults, are fueling growth as they seek nostalgia, collectables, and high-end toys once marketed exclusively to children. Their spending habits have become a defining force in the industry, outpacing traditional toy buyers and reshaping market strategies.

According to NPD Group data, these consumers now account for one-fourth of all toy sales annually, generating around $9 billion in revenue. Their presence in the market is not new, but spending has accelerated since the pandemic, leading to year-over-year gains despite challenging economic conditions. At a time when overall toy sales volume has dipped, higher prices and strong demand from kidults have offset losses and kept the industry growing.

Brands that once targeted parents shopping for kids are now catering directly to an audience willing to spend more for limited-edition action figures, premium Lego sets, and collectables tied to their beloved franchises. The shift is not a passing trend; it is a transformation in consumer behaviour that companies can no longer ignore.

Who are Kidults and Why are they Buying Toys and Games?

Play is no longer just for children. Adulthood has been redefined by a generation that sees nostalgia as a lifestyle rather than a fleeting indulgence. Millennials and Gen Z, raised in an era of immersive entertainment and franchise-driven storytelling, embrace toys as symbols of identity and self-expression.

Kidults are particularly drawn to cartoons, superheroes, and collectables that remind them of their childhood. They buy merchandise such as action figures, Lego sets, and dolls that might typically be meant for kids. In response, toy makers have created entire product lines tailored for these buyers, recognising that demand for nostalgic and high-quality collectables continues to surge.

Social media has amplified this shift, turning fandoms into global communities where collectables are status symbols. Limited-edition releases, high-end figures, and retro-inspired toys are not just purchases – they are cultural markers. What was once considered a niche hobby has become mainstream, with brands tapping into a lucrative market that values authenticity, nostalgia, and exclusivity.

Beyond nostalgia, psychological factors like stress relief, escapism, and personal identity also drive this trend. Many adult toy buyers see these purchases as a way to disconnect from daily pressures, embrace childhood joy, and express individuality. 

For many kidults, these purchases provide a sense of relaxation and familiarity, helping them cope with daily stress and responsibilities. The ritual of collecting, displaying, and engaging with nostalgic brands creates a sense of stability in an unpredictable world.

Case Study: Funko’s Collector Market Success


Image Credit: The Gamer

Funko, best known for its Pop! Vinyl figures have built an empire catering to adult toy collectors. The brand strategically partnered with major franchises like Marvel, Star Wars, and Harry Potter, offering limited-edition releases and convention-exclusive drops that create demand through scarcity.

Focusing on pop culture nostalgia and tapping into fan-driven communities, Funko has positioned itself as a powerhouse in the collector market. The brand’s direct-to-consumer strategy and exclusive collaborations with major retailers have made it a staple for kidults looking to expand their curated collections.

Toy Companies Are Rewriting Their Playbook for Kidults

The world’s biggest brands are no longer designed solely for children. Lego, Mattel, and Hasbro have pivoted to meet the demands of adults in the toy market, launching premium product lines tied to pop culture, gaming, and blockbuster franchises. High-end collectables, intricate building sets, and nostalgia-driven reboots now dominate shelves, targeting consumers willing to pay a premium for quality and exclusivity.

Lego’s detailed Star Wars and architecture sets, Mattel’s collector-edition Barbie dolls, and Hasbro’s Black Series action figures are just a few examples of how the industry has evolved. Limited-edition drops and direct-to-consumer sales have become critical strategies, leveraging scarcity and brand loyalty to drive demand.

At a time when traditional toy sales have slowed, kidults have emerged as the industry’s biggest growth driver. While board games, puzzles, and playsets saw a pandemic-fueled boom, the first nine months of 2022 recorded a 3% drop in sales volume. Higher prices helped offset this decline, boosting overall sales revenue by 3%. Kidults, who tend to spend more per purchase, have maintained industry momentum.

For toy companies, catering to adults is no longer an experiment; it is a core business strategy.

Kidults Around the World

Kidults-around-the world

Case Study: Lego’s Strategic Pivot to Capturing the Kidult Market

Image Credit: Lego

Lego, known for its interlocking brick sets, has skillfully targeted the growing kidult demographic. Recognising the growing demand among adults for complex and nostalgic play experiences, Lego expanded its product line to include intricate sets that appeal to mature consumers.

In 2024, Lego reported a 6% increase in sales, largely attributed to the popularity of its Botanics flower sets specifically designed for older consumers. These sets offer a blend of creativity and relaxation, resonating with adults seeking mindful activities. Lego’s collaborations with popular franchises have bolstered its appeal to the kidult market. Lego taps into the nostalgia and fandoms that drive adult toy purchasing decisions by producing detailed models tied to beloved series.

Lego’s success with the kidult segment shows the value of catering to adult consumers’ desires for nostalgic and hands-on experiences.

What Toys are Kidults Buying?

Kidults are not just a niche segment – they are the backbone of the toy industry’s growth. While they make up only a quarter of total toy buyers, they account for 60% of dollar growth, according to NPD’s Checkout data. Their willingness to pay for premium products has created a revenue stream that far outpaces spending by parents buying for children.

Unlike cost-conscious parents who seek budget-friendly options, kidults gravitate toward collectibles, high-quality models, and limited-edition releases with higher price points. Their spending is not dictated by seasonality in the same way as traditional toy buyers. While holiday shopping remains a peak sales period, this audience purchases year-round, making them a more predictable and stable consumer base.

This shift has allowed toy companies to move beyond the cyclical boom-and-bust nature of holiday-driven sales. Even as inventory challenges and inflation pressure retailers, demand from kidults has remained strong. As a result, brands are increasingly designing marketing campaigns and product launches with this audience in mind, ensuring their place as a long-term driver of industry revenue.

Marketing Strategies For Toy Brands Targeting Kidults

Toy brands no longer rely on traditional retail displays or children’s TV ads to drive sales. Instead, they target kids where they are most engaged – on social media, in collector communities, and through direct-to-consumer platforms. Digital-first campaigns, influencer collaborations, and nostalgia-driven storytelling have become essential tools for capturing this audience.

Limited-edition drops and exclusive collaborations create a sense of urgency and exclusivity that resonates with collectors. Brands like Lego and Mattel have successfully leveraged pre-orders and premium-tier product launches to tap into this demand. Hasbro’s Black Series and Mattel’s Hot Wheels Red Line Club offer high-end collectables directly to fans, bypassing mass-market retail channels and reinforcing brand loyalty.

Community engagement is also key. Toy companies invest in fan-driven events, interactive content, and product tie-ins with entertainment franchises to keep their audiences invested. This approach has expanded beyond the toy aisle – adult-focused toy marketing now includes lifestyle branding, apparel collaborations, and interactive experiences designed to deepen brand attachment.

The brands that understand how to market to kidults are not just selling toys – they are selling identity, nostalgia, and belonging.

Case Study: Pop Mart’s Success with Labubu Collectibles

Image Credit: Los Angeles Times

Pop Mart, a Chinese toy company, has achieved remarkable success by targeting the adult market with its Labubu collectable figures. Created by Hong Kong artist Kasing Lung, Labubu features distinctive rabbit-like ears and spiky teeth, appealing primarily to adults seeking nostalgic and comforting collectables. Priced between $15 and $85, these figurines often sell out within minutes of restocking, leading fans to rely on group chats for updates and endure long lines. Celebrity endorsements, particularly from Lisa of Blackpink, have further boosted Labubu’s popularity. Collectors view these toys not just as playthings but as art pieces that add personality to their homes. Despite the prevalence of knockoffs, demand for Labubu continues to grow, with Pop Mart expanding its presence in the U.S. and reporting strong sales figures. This trend reflects a broader rise in kidult-targeted emotional comfort toys. 

The Future of the Toy Industry Belongs to Adults

Kidults are not just spending – they are shaping the industry’s future. The brands that continue to evolve, embracing technology, sustainability, and personalisation, will lead the next evolution of the toy market. Augmented reality experiences, app-connected toys, and AI-powered collectables are emerging as the next “it” toys, blending nostalgia with modern tech. Eco-conscious buyers also influence brands to redesign packaging, adopt sustainable materials, and explore digital collectables.

The next step for brands is clear: those who embrace innovation while preserving nostalgia will remain at the forefront of this booming market.

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