One e-commerce player’s analytics is showing that the region’s Gen Zs and Millennials could be a bright spot despite recession fears
Based on a data analysis of 60m monthly visits to its e-commerce portal to forecast fashion consumer megatrends and purchasing patterns, a fashion and lifestyle e-commerce firm has released a trend forecast that remains optimistic even amid economic uncertainties and an increasingly dimming global economy.
Driving that optimism is revived consumer interests, cashless and buy-now-pay-later (BNPL) payment options, and a newly-connected South-east Asian retail landscape that has seen more than 100m new shoppers come online since the start of the pandemic.
Having emerged from the pandemic, consumers are returning to in-store shopping and are resuming international travel. At the same time, they are cutting back on discretionary spending in the face of rising inflation.
The trend forecast by ZALORA for the fashion and lifestyle sector reported an uptick in demand for swimwear (4%) and sunscreen (8%), while winter wear saw a spike of 71% as compared to data from 2021.
Another critical contributing factor has been the success of shopping festivals, in particular double-digit campaign days, when brands offer special deals and discounts.
Some highlights of the trends discerned are:
- Strong growth in cashless payment options such as credit cards, e-wallets and BNPL that can open new opportunities for online retailers whilst improving financial inclusion for millions across the SEA region. In particular, the firm saw BNPL fueling a year-on year rise in basket size net merchandise value (NMV) of 74% from 2020 to 2021, and 26% as of Q3 in 2022. The most popular BNPL product categories were luxury (21%) and home and lifestyle (21%). In the luxury category, purchases paid using BNPL options grew from 13% in 2021 to 21% in 2022. BNPL has been most popular among Millennials and Gen Zs on the firm’s platform.
- ZALORA’s data shows that Millennials are likely to be this year’s biggest spenders on its platform, specifically those aged 36 to 40. The firm’s data shows that this generation is spending the most on sports-related products (29%), followed by apparel (25%). They also favor footwear, particularly sports lifestyle shoes and sports performance shoes. On the beauty front, skincare has been the most popular product category among female Gen Zs, while fragrances led the charts for male Gen Z consumers.
- Consumers across all ages were also investing in more sports-related products such as fit-tech wearable devices, which enjoyed a growth of 15% from 2021 to 2022. As for the biggest spenders of wellness products in SEA, ZALORA’s data shows they come from Indonesia and the Philippines. Across the region, adults above 40 spent the most, followed by Millennials aged 26 to 30.
- Consumers, especially Millennials and Gen Z, have been prioritizing sustainability in their purchasing decisions. The firm’s customers focused on products that use sustainable materials (152% increase from 2020 to 2021 and double-digit increases in 2022). Sales of “pre-loved” items saw a sharp growth of 70% from 2021 to 2022, led by Millennials and Gen Zs.
Said the firm’s CEO, Gunjan Soni: “The nascent SEA e-commerce landscape is undergoing a significant digital transformation. Even as we brace for the potentially volatile climate ahead, it has become increasingly important for brands and retailers to connect with consumers in the right way,” alluding to e-commerce players tapping on data analytics to buffer against market disruptions.