Study by Milieu Insight identifies diverging spending patterns across key SEA markets in 2025, highlighting shifts in household budgets, digital payments, and price sensitivity
Southeast Asia (SEA) remains one of the fastest-growing regions globally, with household consumption as the major driver. While often viewed as a single economic bloc, a new study by Milieu Insight indicates that the region has diverged into three distinct consumer economies, shaped by differences in outlook, financial pressure, digital adoption, and spending priorities.
The study draws on responses from 3,054 consumers across six key SEA markets - Singapore, Malaysia, Thailand, the Philippines, Indonesia, and Vietnam. It examines current spending sentiment compared to three months prior, trade-offs prompted by grocery inflation, the role of digital payments, and expectations for purchasing behaviour into 2026.
"Consumers in SEA are no longer behaving as a unified market," said Juda Kanaprach, Co-Founder and Chief Commercial Officer at Milieu Insight. "Different levels of financial pressure and sentiment are shaping three distinct consumer economies. A single regional playbook is ineffective, businesses must understand the specific financial and emotional contexts driving decision-making in each market."
The Stressed Digital Economy: Philippines, Indonesia, Vietnam
Consumers in the Stressed Digital Economy, the Philippines, Indonesia, and Vietnam, are increasing spending despite financial constraints, supported by strong digital payment adoption and resilient sentiment. Across these markets, 59% of consumers report spending more than three months ago, the highest in the region. Grocery inflation remains a core pressure point, with 77% in the Philippines and 83% in Indonesia identifying groceries as unavoidable expenditure, prompting substitution towards more affordable proteins and brands. E-wallet usage is deeply embedded: 64% of Filipinos and 57% of Indonesians prefer digital wallets for routine transactions.
These markets are likely to further entrench digital-first purchasing, with e-wallet adoption expected to continue rising. However, the sustainability of spending will depend on whether inflation stabilizes. Optimism currently sustains consumption, but prolonged price pressures may test that resilience.
The Strategic Comfort Economy: Singapore, Malaysia
Consumers in Singapore and Malaysia demonstrate financial stability but pair it with disciplined, value-oriented decision-making. Singapore records the lowest spending increase in the region, with 40% reporting higher expenditure compared to the Southeast Asia average of 51%. This does not indicate weakened purchasing power, but rather deliberate control of discretionary spending. Value maximization is prominent: 83% of Singaporeans wait for promotions, and 58% prefer credit cards for rewards and cashback.
Malaysia shows the lowest caution sentiment in the region at 20% and the highest current optimism at 28%, alongside comparatively lower grocery pressure. Consumers in this economy are selective rather than constrained, willing to spend where value, convenience, or quality is clearly justified.
This value-optimization mindset is expected to persist. Price comparison, loyalty benefits, and clarity of value proposition will continue to influence brand and channel choice, particularly in premium lifestyle and convenience categories.
The Transition Economy: Thailand
Thailand remains the region's most sentiment-responsive market. While 56% of consumers describe themselves as cautious, the highest in Southeast Asia, 54% still report increased spending, indicating prioritization rather than broad reduction. Thailand also shows the strongest expected improvement, with 53% anticipating greater optimism in the coming quarter.
Payment habits reflect a market in transition, with cash and e-wallet usage at equal levels (39% each).
Over the next year, Thailand's consumer economy will hinge on the direction of sentiment. If confidence strengthens, spending growth will follow; if it weakens, caution is likely to deepen. Digital adoption will continue regardless, making Thailand a key market to watch for shifts in regional consumer mood.
Future Outlook: Divergence Will Widen
The differences between Southeast Asia's consumer economies are expected to deepen over the coming years. Digital maturity, inflation exposure, and value sensitivity will continue to shape spending behaviours in distinct ways. As a result, market success will increasingly depend on understanding economic mindset rather than geography alone. Businesses entering or expanding in Southeast Asia will need market-specific value propositions and communication strategies that reflect the distinct financial behaviours and confidence levels across these three consumer economies.
"A uniform brand narrative will not yield consistent results across Southeast Asia," Juda added. "Pricing strategies, promotions, channel plays, and loyalty programs must now align with the economic mindset of each market, not just its geography."