The value demands of Thai consumers open up great opportunities for private label products
![The value demands of Thai consumers open up great opportunities for private label products The value demands of Thai consumers open up great opportunities for private label products](https://www.foodnavigator-asia.com/var/wrbm_gb_food_pharma/storage/images/publications/food-beverage-nutrition/foodnavigator-asia.com/headlines/markets/thai-consumers-demand-for-value-spells-big-opportunities-for-private-label-products/17464013-1-eng-GB/Thai-consumers-demand-for-value-spells-big-opportunities-for-private-label-products.jpg)
According to recent data, Thai consumers are among the least optimistic about their finances in Southeast Asia, with many expecting to be “worse off” compared to last year, despite wage increases and falling inflation.
This anxiety and economic uncertainty have led many consumers to adopt more cost-saving shopping behaviors, relying on restrictive behaviors such as buying only what they need and paying more attention to spending rather than creative behaviors such as looking for coupons, switching to cheaper grocers or buying in bulk.
“Although affordability and value are becoming increasingly important to Thai consumers, this market continues to place great emphasis on nutrition and health features as strong value drivers,” Rashmika Khanijou, Senior Food and Drink Analyst at Mintel Thailand, spoke at the recent ThaiFex-Anuga Asia 2024 trade fair.
“We have found that these two factors are still the most important reasons for purchase in this market, even ranking ahead of taste and convenience.
“To win over consumers, manufacturers and retailers must respond to affordable dietary needs, for example by facilitating meal planning through digital apps or dedicated tools.
“Another possible approach is to fortify products with nutrients that are less common in the category. For example, we know that bread and bread products are often fortified with folic acid, vitamin B1 or vitamin C, but in fact there is a niche for fortification with vitamin B12, vitamin D, iron or calcium.”
Overall, she urged brands not to decide solely on price and compromise on other factors such as quality, but to find a balance to appeal to more consumers.
“The most important consideration is to ensure that the benefits for the consumer are bundled to avoid the impression that the products are too cheap and of poor quality or too cheap to be good quality,” she said.
“Many examples from abroad clearly show that brands that focus primarily on value risk being perceived as inferior in quality, while brands that offer two or three key benefits at a competitive price tend to be seen as the most valuable – these could include the use of whole grains, the absence of artificial ingredients, protein intake, etc.
“We actually see great growth opportunities for private label products here, as these are already very attractive to financially secure consumers because they offer competitive prices without compromising on quality.
“The problem is that most private label products in Thailand currently focus on ready meals, processed meat and eggs – there are many other categories with potential for innovation, such as baked goods and snacks, and the local market is really demanding them right now.”
Offline still preferred
Thailand also stands out because offline shopping in stores is still far ahead of online shopping, especially when it comes to grocery shopping.
“In fact, our research found that consumers believe that in-store shopping lags behind online shopping in terms of efficiency and experience, but many still prefer to shop in-store,” she said.
“This could be because there is a perception that fresh produce such as meat and vegetables are less fresh when purchased online, so offline retailers have that advantage – however, there is definitely an opportunity to use technology to increase in-store efficiency, for example by using an app or AR technology to help consumers with long shopping lists find and purchase their produce efficiently.”