Thailand’s changing consumer demographics and what they mean

How we consume is driven by who we are. A low income youth in the city will behave very differently from a middle income rural couple with kids.

"Who we are" is evolving rapidly, driven by aging, rising incomes, and changing behaviour. Aging is the most obvious demographic change. By 2020, there will be over 12 million elderly, representing 17% of the population. Incomes are rising, with the proportion of middle income households increasing to 30% of the working population. Behaviour is also changing: people are marrying later; divorcing more; children are moving out on their own.

The objective of this report is to help businesses to identify opportunities and challenges which may arise from Thailand's changing consumer landscape. Part 1 of the report reviews key trends, past and prospective, of the main drivers: aging, incomes, and behaviour. Part 2 pulls together these different trends to model how consumer demographics will change going forward. We incorporate 5 dimensions that are relevant: age; gender; income; geographic location (Bangkok, non-Bangkok urban, and rural); and household type (e.g., living alone, married with kids, etc.). We find that more and more of the population will reside in middle income but non-traditional households. We also identify potentially interesting newer consumer segments, e.g., lone women; empty and mixed nests. Part 3 discusses implications. The impact on consumption obviously varies by sector. For example, because people living alone and couples without kids tend to spend more on housing and entertainment, the rapid rise of these two segments will help these sectors. But one general message is that there is a greater need to focus on specific opportunities as there is no obvious "rising tide" in the form of a sharp increase in the urban middle class as elsewhere in Asia. The implications extend beyond just consumption to the economy and society overall, in the form of reduced savings, slower growth, and a much changed work environment.

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