Most markets are seeing higher retail sales despite inflationary pressures

Retail sales will continue to grow in ASEAN, supported by a return of Chinese tourists and strong domestic fundamentals

Consumer demand will remain strong in most ASEAN markets, presenting substantial growth opportunities for B2C firms amid a growth slowdown in other key markets globally. Demand for non-durable goods—such as clothing, food, and cosmetics—will continue to rise. However, persistently high inflation will slow demand for durable goods in H1 2023; therefore, firms should consider providing promotions and discounts where suitable to attract more sales. Firms should also prioritize sales to high-income consumers that will be largely unaffected by the current environment.


Most markets, except for Thailand, saw strong retail sales in 2022 despite a high inflationary environment. 

  • Retail sales in Malaysia are well above pre-pandemic levels and have been rising in H2 2022 supported by subdued inflation levels.
  • Retail sales in Singapore have been on an upward trajectory, reaching pre-pandemic levels toward the end of 2022, with strong demand for goods such as food and clothing. However, demand for durable goods, such as computers, has fallen in recent months.
  • Retail sales in Indonesia have been recovering gradually as well, supported by a quick recovery of the tourism sector. 
  • Thailand has been the exception in ASEAN with sales slowing in H2 2022 due to high prices and weakening consumer sentiment regarding future economic conditions. Demand, particularly for durable goods such as electrical household appliances, has fallen more rapidly.

Our View

Retail sales will continue to grow substantially in the coming months in most ASEAN markets. Spending on out-of-home entertainment will drive retail sales on food and beverages in 2023. However, sales of durable goods, such as computers and household appliances, will likely be on a downward trajectory in the coming months amid prolonged high inflation levels. China’s reopening will provide a boost to retail sales, as Chinese tourists account for roughly 20% of tourists to the region. The reopening will also lead to higher inflation in the coming months, but this will only have a marginal impact on demand in ASEAN markets. B2C firms will continue to see high consumption activity in 2023.

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