Growing consumer purchasing power in Southeast Asia is seeing a shift in shoppers’ buying habits. Previously, spending focused on ‘needs’ with people being savers rather than spenders.That’s now changing. Greater overall prosperity and a young generation that has grown up in more stable and affluent times is now prioritizing ‘wants’. According to a recent report from Meta, Bain & Company, and DSG Consumer Partners, although 39% of consumers surveyed said they cut back on spending due to economic uncertainty, the report observed that consumers are reprioritising what they perceive to be needs vs wants. Previously cited luxuries like eating out every week, branded apparel, and latest gadgets have moved into what consumers perceive as new "needs". With rising incomes as well as the growing middle and upper middle class, the region is moving closer to a consumption inflection point which will accelerate the trajectory of consumption growth. Two consumer segments in particular drive this growth - Gen Zs and single households, the report said. Southeast Asia's working population is set to increase by 24 million people by 2030. Gen Zs currently make up 23% of the total Southeast Asia population. Solo households are a key growth market. The ‘solo economy’, comprising single households, is growing and driven by three key demographic groups - older singles, young professionals and young urban migrants. Shifts in household sizes are expected to be most pronounced in Philippines, Singapore and Thailand, which are expected to see a 20% increase in single households by 2030."Southeast Asia as a region has demonstrated resilience amidst the global slowdown and consumer sentiment is rebounding in most markets. This is a great opportunity for businesses to address the needs of approximately 700 million consumers in a $4 trillion economy that is forecasted to grow at 4.6% to 2030 (vs 2.7% globally)”, said Praneeth Yendamuri, Partner at Bain & Company.Old Consumers Count TooWhile Gen Zs are at the forefront of digital-first behavior in Southeast Asia, older generations are quickly catching up and are not far behind in experimenting with new technology. The fact that all generations in the region are spending more time online and experimenting with new technologies such as AI, VR and healthtech will affect how Southeast Asian businesses can successfully engage with consumers, said the research report.New Opportunities for New BrandsDefined as brands that are new to the market and are growing five times quicker in revenue vs their category growth rate, ‘insurgent disruptors’ are now responsible for $52 billion worth of revenue in Southeast Asia alone and accounted for 23% market share in 2022. Top categories where insurgent disruptors have successfully gained market share include beauty and personal care and packaged food."Insurgent disruptors are new brands less than 10 years old that have demonstrated strong market share growth. With 'wants' transitioning into 'needs' and dissatisfaction with what the incumbent brands provide, it is no surprise that Southeast Asian consumers are choosing insurgent disruptors to satisfy their unmet needs and evolving expectations," said Sameer Mehta, Head of Southeast Asia at DSG Consumer Partners. Although e-commerce has been a key driver of retail growth in Southeast Asia, investment in physical retail is helping as well.Le Thi Huyen Trang, Research and Consulting Director at JLL Vietnam forecasts that retail rents in Vietnam may increase dramatically in the next 12 months as brands compete for space.Retail rents are experiencing a resurgence across the Asia Pacific (APAC) region, per JLL.