2023 has been the year of recovery for most markets, especially in Asia, as countries have returned to their normal daily life and even new trends have emerged. dataSpring's Eye on Asia has been at the forefront of this rise of trends shaping back the cultural activity post-pandemic and introducing new ones that are curiously worth following as we enter a new year, leading to new paths.
Eye on Asia rounded up the trends in 2023 that made an impact across consumers in Asia and are worth watching as well for 2024 as they continuously influence the diverse Asian consumers:
The year was met with tourists returning to their favorite destinations, and countries have successfully regained their tourism momentum, particularly after a prolonged hiatus of two-and-a-half years. Consequently, the phenomenon known as the "revenge travel spree" has taken hold of tourists which is a pent-up desire to make up for the time lost to the pandemic. Boosted as well of cultural activities and events that have finally resumed after being postponed and restricted to which Asia is rich welcoming not only localities but as well foreigners. One example was the most awaited Songkran holiday in Thailand, which was celebrated in full blast for the first time since 2019, reaching an estimate of about 18 billion THB or 530 million USD in tourism spending. It is also estimated now that the festivities are back, with total revenue for 2023 reaching about 2.38 trillion THB, including 1.3 trillion THB from more than 30 million foreign tourists and around 800 million THB from local tourists.
Japan's festivities are also no exception. Tourism resurgence in the country was particularly pronounced during the Golden Week holidays of 2023, as pandemic-related measures gradually eased throughout the country. Planes, trains, and expressways experienced peak congestion on the first day of the holiday week, with the estimated number of foreign travelers in April matching the 2.9 million visitors recorded in April 2019. Even though this rapid revitalization greatly boosted Japan's tourism sector, it also became a double-edged sword as it led to overcrowding at landmarks and occasional misunderstandings between locals and tourists.
Nonetheless, this surge in tourism presents a valuable opportunity for the Japanese government to fully recover the industry within the year 2023. Domestic travel agency JTB Corp is optimistic and expecting around 21.2 million arrivals for the remainder of the year. This projection puts Japan back on course to meet the government's 2030 target of welcoming 60 million visitors.
On the other hand, Taiwan experienced some lag in the rate of incoming visitors in the first few quarters of the year, hence initiatives like the lottery system were launched to recover from the slow pace of regaining its visitors. The government had set its goal to 6 million visitors for 2023 and was proven to be effective as it attracted 4 million visitors already by September! This just shows how foot traffic around the world especially in Asia has bounced back already. Despite economic situations, people are still keen on traveling.
Booming Tech Industry in Asia
Taiwan may have lagged when it comes to the tourism industry. However, it's a different story for its tech industry specifically in the semiconductor sector. While semiconductor production in Taiwan can be traced back to the 1970s, after The Taiwan Semiconductor Manufacturing Company (TSMC) reinvented the chipmaking business model it led to a strong business expansion through the years that now made TSMC the largest contract semiconductor manufacturer, making up to 60% of global foundry in 2020. This contribution is so big it makes up to 15% of Taiwan's GDP.
To meet the demand worldwide, Taiwan has set out this year to promote technological development and talent cultivation for the semiconductor industry. Together with renowned semiconductor enterprises and academies in Taiwan, business matching programs, academic seminars, and formal education were rolled out in universities in Southeast Asia to recruit foreign talent.
When it comes to technological advancements the spotlight is often on East Asian Markets. However, developments in Southeast Asia Markets are quickly gaining digital milestones. The nation that got the major attention is Indonesia, a nation driven by a very strong and independent e-commerce ecosystem. In fact, Indonesia is on its way to becoming one of the fastest-growing e-commerce markets in the world, aiming to reach a value worth 360 billion USD by 2030 and ranking sixth globally in terms of number of active startups, with about 2,500 in 2023.
Unlike other countries that rely mostly on foreign tech and social platforms, Indonesia was able to jumpstart and transform its digital sector with help from local talents who were able to develop native platforms and solutions addressing the nation's needs. Not only did they use the nation’s language, Bahasa Indonesia, as the main language for their website, apps, and systems, they were able to offer locally integrated services, from onboarding and transactions to delivery.
Lifestyle and Preference Leading the Way to a Digital Future
Of course, the shift to digitalization has led people's lifestyles to drastically change, leading to businesses exploring new ways to reach consumers on digital platforms. One of the most recent phenomena that has swept Asian customers is live streaming or live-selling, which has effectively attracted consumer's interest, a trend that has completely changed the way people shop.
South Korea is one of the countries that have enthusiastically embraced this trend by 2022. 66% of South Koreans make a weekly purchase online and live commerce accounts for 2-3% of the online shopping market with sales estimated to grow from 3 to 10 trillion KRW in 2023. That is likely to manifest with the help of live-streaming shopping as six out of ten consumers have already made purchases through live commerce or TV home shopping-style mobile platforms in the city of Seoul alone.
Like Indonesia, South Korea's local digital platforms Naver and KakaoTalk are the leading go-to platforms for live selling in the country this is due to the fact that both platforms have answered the demand to shop online during the pandemic therefore securing their places.
TikTok is another giant platform who have joined the trend which is fitting as the platform is video-oriented and its parent company is based in China a thriving place for livestream selling. In 2022, the live-streaming industry in China was expected to exceed 400 billion USD.
This estimate is no surprise with the effectiveness of the trend, in Douyin, the Chinese version of TikTok from the same company, a user earned $13.7 million in sales in 7 days with 3-second product showcases. Primarily featuring cheap items during the online live-selling combined with a deadpan expression gaining attention the most as the seller broadcasted her fast-paced tactic during the National Day holiday in October.
It's no wonder that China and South Korea are leading in the live-streaming market as both countries are known for their appetite for shopping even before the drastic shift to digital shopping during the pandemic.
The fashion industries have regained their foothold in both markets after the pandemic. However Western haute couture brands in particular are fascinated by the growing trends in South Korean pop culture, leading brands to flock to Seoul in the wake of South Korea's economic success.
Cultural characteristics, like a conspicuous display culture, are also major factors that drove the rapid growth of the luxury market in South Korea, as it is not uncommon in online discussions and lifestyle news features to talk about personal wealth, earnings, and the economic status of people. In fact, displaying luxury items is widely accepted in South Korean society, with only 22% of respondents in a Mckinsey survey showing that it is in bad taste to show off pricey clothing or items. Additionally, a study conducted by Economic Affairs in July 2022 showed that 60% of South Koreans believe that it is "fairly important" or "very important" to be seen as rich.
Major department stores also discovered in the first half of 2023 that nearly half of their luxury brand consumers are millennials and Gen Z, collectively known as "Generation MZ" in the country. A separate study by Morgan Stanley showed that luxury goods purchases by customers in their 20s have doubled every year, far exceeding overall luxury sales growth since 2016, when the largest buyers were customers in their 30s.
This proves the continuous growth of luxury consumer culture in the future as younger generations embrace consumption, opt out of marriage, and have no children. Even teenagers are getting caught up with the trend of buying luxury items as the 2020 Smart F&D poll of 783 middle and high school students found that 56.4 percent have bought luxury products. Luxury brands have also found this interesting trend of lowering the age of brand ambassadors to fuel the interest of teenagers capitalizing on the popularity of K-pop culture and selecting big groups such as BTS, and even NewJeans, all of whom are still teenagers, to become global ambassadors, gaining support from younger market and even influencing fashion choices of elementary school students.
As 2024 approaches, the rapid technological and social progress in Asia is also expected to bring forth new opportunities and continuous digital development, likely focusing on online platforms that address lifestyle needs or even cultural needs. dataSpring's Eye on Asia eagerly looks forward to taking the lead in exploring more of Asian consumer behavior and emerging trends for the coming year and delivering more insightful articles. See you in our next one!