Hakuhodo Malaysia | THE SEAMLESS MIDDLE
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Hakuhodo Institute of Life and Living ASEAN (HILL ASEAN)
Unveils New Perspectives on the ASEAN Middle Class

Latest marketing research introduces “The Seamless Middle”— people who identify themselves as middle class regardless of their actual income

79% of Malaysians view themselves as middle class, compared to 46% who would be classified as such based on actual monthly household income.

Kuala Lumpur, March 11, 2016 — Hakuhodo Institute of Life and Living ASEAN (“HILL ASEAN”), a think tank established in 2014 by Japan’s second largest advertising company, Hakuhodo Inc., today announced findings from its latest research: “The Seamless Middle: New Perspectives on the ASEAN Middle Class” at this year’s ASEAN Sei-katsu-sha Forum in Kuala Lumpur, Malaysia.

The flow of people, goods and money in Southeast Asian countries has heightened interest in ASEAN as a single market. As household incomes in ASEAN countries rise thanks to economic growth, the middle class has become proportionately larger, and is expected to become the majority in the ASEAN consumer market.

The middle class is generally defined by income. But the latest research found large segments of people who identify themselves as middle class regardless of their actual income. Indeed, in Malaysia, an overwhelming 79% view themselves as middle class, compared to 46% based on actual monthly household income. This indicates that a redefinition of “middle class” may be required.

The report suggests the emergence of The Seamless Middle, a group that cleverly finds ways to live their desired lifestyle by seamlessly juggling income and spending, unbound by their current income level. They do so by (1) increasing their sources of income with side jobs, whilst still maintaining a full-time job: for example, a beautician in Malaysia uses social media as a platform to boost income. She buys clothes and beauty items on her trips abroad and subsequently sells them on social media; (2) controlling their expenses: for instance by stocking up on canned coffee when it’s on sale; and (3) turning expenses into future income: for example, by investing in the next generation by sending their kids to international school so that they can work abroad in the future.

The report notes that this trend is a shift away from living the life they can afford to finding ways to afford the life they want.

Research across all ASEAN countries revealed a common picture of this Seamless Middle, suggesting the emergence of a society where most people share a seamless perception of themselves as middle class regardless of income bracket.

HILL ASEAN notes that the self-perceived middle class is broad because this class defines itself not only by income level but also by the degree to which they can achieve their desired lifestyle. Those on low incomes but living their desired lifestyle are middle class, as are those on high incomes that cannot live their desired lifestyle if they do not work.

Unlike the traditional middle class who spends prudently, spending for the Seamless Middle is considered an upfront investment where the benefit (value) from it is not as important as the return it will bring about in achieving the desired lifestyle.

This means that next-generation marketing and communication strategies targeting The Seamless Middle will need to focus on designing and maximizing ROI through three key points; namely defining target by income class and self-perceived class, repositioning spending as an investment, and lastly using sei-katsu-sha as corporate ambassadors for attaining desired lifestyles.

The latest research findings are based on Hakuhodo’s ASEAN Home-Visit Survey (see Note 2), which seek to identify commonalities and differences among ASEAN sei-katsu-sha, to gain an overall insight into the region, as it further integrates into the ASEAN Economic Community (AEC). The studies monitored different attitudes, income, expenditure and lifestyle approaches in five ASEAN cities: Singapore, Kuala Lumpur, Bangkok, Jakarta and Ho Chi Minh City.

HILL ASEAN will continue its research, observing sei-katsu-sha from its unique viewpoints and making recommendations based on insights gained from these fresh perspectives.

Note 1
ASEAN Qualitative Survey: A survey of sei-katsu-sha attitudes toward “class”.
Survey outline
Cities surveyed: Singapore, Kuala Lumpur, Bangkok, Jakarta and Ho Chi Minh City
Sample size: 500 per country
Survey subjects: Male and female sei-katsu-sha aged 20 to 59 years old from all socio-economic classes (SECs A–D)
Survey method: Subjects interviewed in their homes
Period of study: June 2015
Research: Tokyo Survey Research & Co., Ltd., Cimigo Holdings Ltd.

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