Three key client developments to look at in Asia for 2021

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The coronavirus economic recovery, continued adoption of technology, and increased demand for health products are three trends that will dominate consumer behavior in Asia in 2021.

This comes from new insights from consumer-focused private equity firm L Catterton, which has seen a surge in consumer confidence since the beginning of the year.

“Consumer sentiment is now better than it was in January,” Chinta Bhagat, managing partner for Asia at the company, told CNBC’s “Street Signs Asia” on Wednesday. “Although it’s not over yet.”

In his latest Consumer Insights Report, which polled more than 15,000 people in 16 countries around the world, L Catterton found that consumers in Asia are most optimistic about the prospect of economic recovery. The survey was conducted in February before the recent cases in India and some other parts of Southeast Asia reappeared.

Some of the habits we thought people would adopt during the Covid crisis remain.

Chinta Bhagat

Managing Partner (Asia), L Catterton

More than one in ten (11%) respondents in Asia said life was already back to normal, compared with just 3% in the rest of the world. This number was highest in China at 20%. Meanwhile, 43% said the worst of the pandemic was over, compared to 23% in the rest of the world.

Bhagat said the further path to recovery will be the main factor that will dominate consumer behavior in the coming year. However, he noted that two related trends were likely to continue as well. The first is digitization and the move to online.

An employee with a face mask works in a pharmacy in Tonekabon, Iran on April 26, 2021.

Xinhua News Agency | Getty Images

“We think this is more transformation than transition,” said Bhagat. “Some of the habits that we thought people would adopt during the Covid crisis remain. There are more things done online than not.”

Health has now become a “very big problem,” he said, highlighting the increased demand for vitamins and dietary supplements as a key indicator.

“Almost across the region, city by city, this is the only thing that caught your eye as people consume more and likely continue to consume more,” he said.

In 10 years you will not have a single product business, everything will be an experience, a product, a service rolled into one.

Chinta Bhagat

Managing Partner (Asia), L Catterton

Bhagat’s comments come when L Catterton announced its first strategic investment in Indonesia.

The company led a $ 56 million financing round in Social Bella, an omni-platform beauty start-up also backed by Singapore’s state-owned Temasek and venture capital firm Jungle Ventures.

Bhagat said the deal reflects the company’s belief that Asia continues to have consumption and demand for multi-channel options.

“Our own view is that in 10 years’ time you won’t have a single product business, but all an experience, a product, a service rolled into one,” said Bhagat.

“We’re not alone. I think a lot of other investors see the same things as us.”

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