The Aksra Theatre in Bangkok normally hosts traditional puppet shows to celebrate Thailand’s national play, Ramakien, and the walls are adorned in a Baroque style of Thai art to promote the heritage of Thailand. But guests invited to view the research findings on 'New perspectives on the ASEAN middle class' on November 12 were there to look to the future not the past.
Hakuhodo Institute of Life and Living ASEAN (HILL ASEAN) is a think-tank founded in 2014—the Hakuhodo Institute of Life and Living in Japan was launched in 1981—dedicated to studying 'sei-katsu-sha'.
Sei-katsu-sha is a philosophy that views people as fully rounded individuals with their own lifestyles, aspirations and dreams instead of viewing them as merely consumers. The research carried out by HILL ASEAN—in Vietnam, Singapore, Malaysia, Thailand and Indonesia—involved conducting 27 home surveys to find out about their home lives, income and online activities.
The think-tank also surveyed 500 people—both males and females aged 20 to 59—from each country to determine if they felt middle class based on their lifestyle or income.
The research found that the self-perceived middle class is substantially broader than the socio-economic middle class.
“For our research we looked at people who have an upper-class income, but their mindset is middle class, and lower-class income people who believe they are middle class. Obviously, we surveyed middle-class income and middle class mindset people. But we paid most attention to people who have a gap between their income and mindset,” said Goro Hokari, institute director of HILL ASEAN.
Research showed broad discrepancies between middle class by income and middle class by self-perception. In Singapore, for example, 45 per cent of respondents believed they were middle class by income, but 85 per cent fell into the self-perceived middle class bracket. Across all ASEAN countries the self-perceived middle class is higher. The ASEAN average of people who self-identified as middle class was 83 per cent.
With this information, HILL ASEAN set out to find out how people achieve their desired lifestyle.
The findings show there are three ways to achieve the desired lifestyle: increase income, reduce expenses and turn spending into future income.
To increase income, people tend to take on a second job such as working from home, selling goods to their neighbours, trading on social media and entrepreneurship.
People surveyed on how they reduce expenses consume wisely by shopping online, in sales and buying items on credit.
The final way to achieve a desired lifestyle involves consumption that leads to a future investment. In this case, parents investing in their children’s future such as sending them to a private school or saving for university hoping that one day their children will be financially capable to look after them.
The other future income is investing in a side business such as buying a musical instrument to give music lessons.
The research carried out by HILL ASEAN suggested there is an emergence of “The seamless middle”—where a person finds ways to live their desired lifestyle by seamlessly juggling income and spending, unbound by their current income level and they view themselves as middle class regardless of income.
HILL ASEAN believes that by looking at the 'seamless middle', marketing strategies need to be changed by redefining class segmentation, redefining promotions and redefining benefits.
The launch of the AEC at the end of this year will increase interest in the region with the regional economic integration leading to a single market which will increase the flow of goods and people.
The economies of ASEAN are forecast to expand 5 per cent a year for the next half a decade, according to a 2014 research paper by the Economist Intelligence Unit, leading to companies changing their sales and marketing approaches in the region to cater to emerging customers.
Class segmentation can change by co-branding to bring different lifestyle choices together, for example H&M working with Versace.
“Brands should not just focus on one class. Versace for example is in collaboration with H&M. The market will expand to upper class for H&M and Versace has the opportunity to reach new people,” said Goro.
The 'seamless middle' proactively look for sales and rewards from brands and they search for deals that offer "discount for action", where they make gains in return for proactively promoting the brand—such as discounts that are only available to brand supporters.
Hakuhodo Asia-Pacific managing director Masato Saito made the closing speech at the forum and he touched on what the future holds for HILL ASEAN, saying its focus would not be solely "for the clients' business growth".
“We will contribute to the future of ASEAN society by understanding sei-katsu-sha,” he said.