Although cheaper prices attract consumers in Thailand, it seems a product’s quality is the highest priority when making a purchase decision. According to new research from global market intelligence agency Mintel, as many as three in five (58%) metro Thai consumers* rate high quality as a key purchase factor, making this the leading driver of buying decisions. Also ranking in the list of the top five purchase influences among metro Thais are convenience (42%), special offers (40%), durability (35%), and finally, their favourite brands (26%).
Thai consumers have seemingly become more cautious with their finances as Mintel research reveals three in five (59%) metro Thais said their personal goal in 2016 was to get their household finances in order. For the best bargains in town, 45% of metro Thais who are smartphone users say they use their devices to compare prices at other stores while out shopping, and 43% say they use their smartphone to research the best price of an item in their area before deciding where to make purchase.
Avanthi Ravindran, Senior Trend & Innovation Consultant, Southeast Asia and India at Mintel, said:
“Thailand’s consumers have become more prudent with their spending in recent years. In light of this, more and more consumers are turning to online channels that give them access to competitive offers and cheaper pricing. However, our research shows that high quality remains a key driver of purchases, and consumers are still willing to pay a premium for products that are safe and natural.”
Furthermore, Mintel research shows that consumers are increasingly becoming more mindful of the environment and what they are consuming. Indeed, 37% of urban Thais prefer products that maintain fair trade regulations, while just over three in 10 (31%) prefer products that carry an environmental certification from a credible government or non-profit organisation.
Consumers are now also willing to pay a premium for ‘safe to use’ claims on products, as indicated by two in five (40%) metro Thai consumers. This is the second biggest factor behind consumers’ willingness to pay a premium among urban Thais, following ‘better product performance’ (43%) which is the leading motivator. The third most important consideration for Thais to purchase products with a premium price tag is for them to be natural and formulated using pure ingredients; over one in four (27%) metro Thais said that they are willing to pay a premium for everyday products that are ‘natural’.
“With ingredient safety concerns on an upward trend globally, consumers are on the lookout for products that highlight naturalness as well as clean, pure formulations. The words ‘safe’ and ‘natural’ enhance a product’s appeal to consumers, and these perceptions are only likely to grow with the increasing concerns around food safety and chemical contamination,” Avanthi adds.
Finally, convenience is the second most important purchase driver among urban consumers in Thailand, after high quality (42% and 58% respectively). While the Digital Age has made shopping easier for convenience-seeking consumers, especially as information is now just a click away, Thai consumers’ busy lifestyles have also called for convenient and easy-to-use formats. Mintel research reveals that three in 10 (30%) metro Thai consumers prefer to eat out as they don’t have time to cook their meals at home, while as many as one in four (24%) prefer to eat lunch at their desk at work as it helps them save time.
According to Mintel estimates, Thailand’s ready meals retail market saw an increase of 2.1% in volume, and reached 50,170 tonnes in 2015. The market is expected to grow at a volume CAGR (compound annual growth rate) of 3% in the five years from 2016, to reach a volume of 58,700 tonnes in 2020.
“With metro consumers increasingly looking for convenient meal options, the opportunity for on-the-go formats has expanded, especially as Thailand’s ready meals market is forecast to grow over the next couple of years. The relationship between quality and speed should be recognised; consumers are looking for high quality, fresh products that are delivered conveniently and quickly. Offering the right price and discounting as appropriate are also crucial; companies will need to branch out with their marketing efforts, tap into online channels, and go beyond traditional retail stores,” Avanthi concludes.