Hakuhodo Institute of Life and Living ASEAN (HILL ASEAN) Unveils New Perspectives on the ASEAN Middle Classes

Wednesday 18 November 2015 09:56
Latest marketing research introduces 'The Seamless Middle' – people who identify themselves as middle class regardless of their actual income

Hakuhodo Institute of Life and Living ASEAN ("HILL ASEAN"), a think tank established in 2014 in Thailand by Japan's second largest advertising company, Hakuhodo Inc., today announced findings from its newest research: "The Seamless Middle: New Perspectives on the ASEAN Middle Class."

The insights were shared at this year's ASEAN sei-katsu-sha Forum 2015, held in Bangkok on 12 November. 'Sei-katsu-sha1' insight is Hakudo's fundamental philosophy for gaining deep insights into the lifestyles, aspirations and dreams of people in ASEAN countries, not just treating them as "consumers," and thereby giving more depth to their marketing efforts.

The flow of people, goods, and money in the Southeast Asian countries has heightened interest in ASEAN as a single market. Increasing household incomes is leading to a proportionate growth of the middle class, set to become the majority in the ASEAN consumer market.

But, the latest research found a redefinition of middle class, with "the emergence of the self-perceived middle class society who identify themselves as middle class regardless of their actual income".

This means that middle class is not only about how much an individual earns, but also the degree to which that individual can attain their desired lifestyle.

What is interesting to note is how people of low socio-economic classes achieve their desired lifestyle by "increasing their sources of income with side jobs", whilst still maintaining a full time job. For example, a hospital clerk in Thailand "buys a waffle maker and sells waffles to neighbors" from home, or controls expenses by "stocking up on coffee when it's on sale".

Investing in the next generation by "sending kids to international school" so that they can work abroad in the future is another way of increasing income, albeit future income.

The report notes that this trend is a "shift from living the life they can afford to finding ways to afford the life they want."

It suggested the emergence of The Seamless Middle – where one "cleverly finds ways to live their desired lifestyle by seamlessly juggling income and spending, unbound by their current income level".

Research across all ASEAN countries revealed a common picture of this Seamless Middle, which is "a society where most people share a seamless perception of themselves as middle class, regardless of income bracket".

HILL ASEAN notes that the self-perceived middle class is broad namely due to the fact that this class "defines itself not only by income level but also by the lifestyle they can achieve; people who have set their mind on a desired lifestyle and who juggle spending and income in order to enhance [this], with spending generating future income in a seamless cycle".

Unlike the traditional middle class who spends prudently, spending for the Seamless Middle is considered "an upfront investment where the benefit (value) from it is not as important as the return it will bring about in achieving the desired lifestyle".

This means that next-generation marketing and communication strategies targeting 'The Seamless Middle' will need to focus on designing and maximizing ROI through three key points; namely defining target by income class and self-perceived class, repositioning spending as an investment and not as a cost, and lastly using sei-katsu-sha as corporate ambassadors for attaining desired lifestyles.

The latest research findings are based on Hakuhodo's ASEAN Quantitative Survey (see Note 1) and the ASEAN Home-Visit Survey (see Note 2), which seeks to identify commonalities and distinctives among ASEAN sei-katsu-sha, to gain an overall insight into the region, as it further integrates into the ASEAN Economic Community (AEC). The study monitored different attitudes, income, expenditure and lifestyle approaches in five ASEAN cities – Singapore, Kuala Lumpur, Bangkok, Jakarta and Ho Chi Minh City.

HILLASEAN will continue its research, observing sei-katsu-sha from its unique viewpoints and making recommendations based on insights gained from these fresh perspectives.