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Nielsen: Connected Spenders the customers of the future

Released at: 13:54, 09/09/2017

Nielsen: Connected Spenders the customers of the future

Photo: Viet Tuan (VET)

Connected spenders, who have the ability to access the internet and are willing to spend their discretionary income, are the future of the global economy, according to latest Nielsen report.

by Hong Nhung

There were about 23 million Connected Spenders in Vietnam in 2015, according to Nielsen Vietnam’s latest study, conducted in cooperation with the Demand Institute, and that number is expected to nearly double to 40 million people in 2025. More sizeable, their spending will also rise, from $50 billion annually to $99 billion over the same time period and, by 2025, they are expected to account for half of all consumer spending.

“When consumer-oriented companies look around the world for growth opportunities, they tend to think about consumption driven by an income-based middle class,” said Mr. Rakesh Dayal, Executive Director, Consumer Insights, at Nielsen Vietnam. “But considering income alone is no longer enough, amid today’s sluggish global economic environment and middle class malaise. Turning the focus to Connected Spenders, a new emerging type of consumer, could solve the shortcomings of the old income-based approach.”

“Connected Spenders are a fast-growing new segment of consumers: digitally savvy consumers with discretionary income and avid shoppers who punch above their income class in spending,” he went on. “Our research shows that Vietnamese Connected Spenders will spend $800 billion over the next decade. Therefore, for consumer-focused businesses seeking to grow in Vietnam, these are the consumers whose needs will need to be addressed.”

Middle class income is no longer enough to define the consumers that drive the global economy and it’s time to turn the focus on the next source of growth. By 2025, these consumers will account for nearly 40 per cent of the global population and will contribute more than 50 per cent to annual global spending. Due to growing access to the digital economy and all that comes with it, the East Asia and Pacific region will witness the greatest increase in the number of Connected Spenders, especially in emerging markets like Indonesia, the Philippines, Thailand, and Vietnam.

Young, high-earning and willing to spend

Around one-third of Vietnamese Connected Spenders are between the age of 21 and 34 (34 per cent). By definition, Connected Spenders are present across all income groups. However, they must have sufficient income to spend in discretionary ways, which means they are more likely to be found in high income brackets.

In Vietnam, over three-quarters of consumers within the high income bracket are Connected Spenders (76 per cent), nearly two-thirds in the middle income bracket, and 43 per cent in the lower income bracket.

Omni-channel shoppers

Compared with other internet users, Connected Spenders are much more adept at omni-channel shopping. Compared with non-Connected Spenders, around 80 per cent think shopping online is more fun and convenient. Before buying, they gather information from online and offline. Around four in five read online reviews (83 per cent) and refer to social media comments (74 per cent) prior to purchasing a product, whereas two out of three (66 per cent) check out products in a physical store before purchasing them online.

Connected Spenders are price-conscious, constantly on the lookout for special deals and promotions, and more than half use price saving apps when searching for the best deals, even when they are planning a shopping trip online or in-store.

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