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ASEAN Economic Community Will Offer a Young and

Dynamic Consumer Market
Opinion|17 Oct 2013
The creation of the ASEAN Economic Community (AEC) at
the end of 2015, uniting the ten members of the
Association of Southeast Asian Nations (ASEAN) into a
single market and production base, will put Southeast
Asia in the spotlight, attracting greater attention from
multinationals which have so far been drawn mainly to China and India. Poisedto become
a global economic powerhouse thanks to its expected strong future economic
performance, the AEC also has real potential of becoming a vast market with
predominantly young, dynamic and increasingly affluent consumers, which contrasts
ageing China and Japan.
Total and Per Capita Consumer Expenditure in ASEAN Member Countries: 2012
Source: Euromonitor International from national statistics/Eurostat/UN/OECD
Note: Data are in current 2012 prices, year-on-year exchange rates
A tenth of the global population and a rising middle class
The ASEANs integration into the AEC is a significant progression from the ASEAN Free
Trade Area (AFTA) which was established in 1992, as it will transform the ASEAN into a
region with free movement of goods, services, investment and skilled labour. As a
consumer market, the AEC will be a regional market of over 615 million consumers, with
combined consumer expenditure estimated to reach more than US$1.5 trillion in 2015. In
comparison, during the same year, total consumer expenditure is forecast to reach US$3.8
trillion in China and US$1.2 trillion in India.
More importantly, the AEC consumer market will boast a young and growing population
together with a burgeoning middle class. Across Southeast Asia, the middle class has
already been credited to transforming the regions key consumer markets including
Indonesia, the Philippines, Thailand, and Vietnam. Euromonitor International estimates
that the number of households with an annual disposable income over US$10,000 (in
constant terms) in the whole ASEAN will reach 47.1 million in 2015, rising further to 63.9
million by 2020. Given the size of its middle class, the AEC will simply be a consumer
market no multinationals can afford to ignore.
A single market, yet with great diversity

An Hodgson
Income &
Expenditure Manager
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Consumer goods companies excited at the prospects of the AEC single market should not
lose sight of the fact that the ASEAN will remain a highly diverse region in many regards
from incomes and levels of socio-economic development to language, culture, politics
and religion.
Consumers in different countries will continue to have different needs, preferences and
levels of purchasing power, thus requiring companies to adopt localised business
strategies tailoring to individual countries within the AEC single market. In this regards,
ASEAN diversity could potentially act as a barrier preventing companies from achieving
scale.
Euromonitor International forecast that total consumer expenditure in the ASEAN will
reach US$2.0 trillion in 2020, representing a real growth of 45.7% over the 2013-2020
period. Driven by a burgeoning middle class with greater capacity for discretionary
spending (i.e. spending on all items other than food, non-alcoholic beverages and
housing), communications, education and hotels and catering will be the fastest growing
consumer spending categories, with forecast real growth of 61.7%, 59.2% and 51.0%
respectively over the 2013-2020 period.
For further information, please contact An Hodgson, Income and Expenditure Manager;
An.Hodgson@euromonitor.com
Euromonitor International 2014
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