Malaysian shoppers turn selective as Asean growth fails to lift FMCG spending

KUALA LUMPUR: Cautious household spending and increasingly selective shoppers are making it harder for fast-moving consumer goods (FMCG) companies in Malaysia and other Asean countries to capture growth.

This challenge arises despite resilient economic expansion across Southeast Asia, according to a new Bain & Company and NielsenIQ report.

More than 50 million people are expected to enter the consuming class by 2030, the report noted.

Covering Malaysia, Indonesia, the Philippines, Singapore, Thailand and Vietnam, the report said FMCG companies can no longer rely on broad-based consumption growth as consumers become more deliberate about where they spend their money.

Across the six markets, FMCG value growth remained largely flat between 2023 and the first half of 2026, with weak sales volumes offsetting continued price increases.

While Southeast Asia's economy is projected to grow by 5.1 per cent in 2026, household spending faces pressure from slower real wage growth and high household debt.

The result is a more selective consumer, with shoppers increasingly willing to spend more on products they see as delivering genuine benefits while seeking savings in other categories.

"Growth in Southeast Asia is not disappearing - it is becoming harder to capture," said Praneeth Yendamuri, partner and head of Asia Pacific Consumer Products practice at Bain.

"Consumer products companies can no longer rely on broad-based consumption growth or traditional definitions of premium and value."

For Malaysian FMCG brands and retailers, the findings point to a consumer market where simply offering either the cheapest or most premium product may no longer be enough.

The report found that seven in 10 consumers who traded up in one category also traded down in another.

Beauty and baby care products are among categories seeing greater premiumisation, particularly where consumers associate products with better health, safety, performance or benefits for their families.

Household products, however, remain more value-oriented.

Overall, 58 per cent of consumers said they were willing to pay a premium for compelling reasons such as trusted quality, proven effectiveness or meaningfully better performance.

At the same time, brand loyalty is becoming increasingly conditional.

Half of Southeast Asian shoppers said they would switch brands immediately if their usual choice was unavailable.

Yendamuri said businesses would need to make sharper choices about where to compete and build products around genuine consumer willingness to pay.