Over the past year, consumer sentiment across the Asia–Pacific (APAC) region has reflected both resilience and recalibration. Most economies in the region have maintained or improved confidence, even amid ongoing challenges and unique conditions. Across the region, consumers remain cautiously optimistic—balancing relief from easing inflation and political stability with persistent concerns about costs and global uncertainty.
Key economies—Australia, China, India, Japan, and South Korea—are revealing nuanced shifts in how consumers feel, spend, and splurge. The following charts highlight these shifts, painting a picture of tempered positivity rather than outright exuberance.
Net sentiment: South Korea’s rebound
Among the five countries surveyed, South Korea recorded the largest improvement in net sentiment—the gap between optimism and pessimism—that widened by 36 percentage points since the fourth quarter of 2024. This rebound follows a period of political upheaval late last year. With stability returning, the lift in net consumer sentiment could also be attributed to an increase in tourism and a strong stock market.1 Additionally, concerns around tariffs have eased, down six percentage points since the previous quarter.
The number of consumers who intend to spend more in categories such as toys (up five percentage points) and vehicles (up two percentage points) has increased, consistent with global year-end shopping trends. However, our survey data shows that South Koreans still intend to spend less on discretionary goods overall, signaling continued caution.
Notably, high-income consumers—those earning more than 120 million won ($81,750) annually—are showing significantly increased intent to splurge, up 22 percentage points from the fourth quarter of 2024. This is a possible indication of widening divides between affluent and mid- to lower-income households.
Concerns: China’s stable optimism
Consumer sentiment in China tells a more stable story. Although concerns about rising prices and inflation have fallen by eight percentage points year over year, overall optimism has remained unchanged since last quarter. Even with inflation hovering near zero, consumers are remaining cautious and tightening their discretionary spending budgets.2 And retail is increasing. From January to October, total retail sales of consumer goods increased by 4.3 percent compared to the same period in the previous year.3
While net intent to spend on essentials is up, intent to spend in discretionary categories remains negative. Splurge behavior has declined across generations, with Gen Z notably down 14 percentage points compared to the fourth quarter of 2024, the largest drop-off of any age group. Still, Gen Z remains the most likely demographic to treat themselves.
New shopping behaviors: Australia’s steady course
Australian consumer sentiment has also stayed broadly stable. The Reserve Bank’s rate cuts have eased cost-of-living pressures, though unemployment has ticked up. GDP growth continues to hover around 2 percent a year.4
While Australian consumers remain increasingly likely to try new shopping behaviors, most aren’t experimenting with radical changes, apart from trying different brands—a pattern consistent with global behavior.
Net intent to spend is positive for essentials but negative for discretionary goods, highlighting continued caution. Intriguingly, low-income consumers—those earning less than AU $70,000 (US $45,800) annually—are showing more willingness to splurge than other groups. Meanwhile, middle-income consumers—earning between AU $70,000 and AU $125,000 (US $81,800)—are pulling back, an inversion of trends seen in other major markets.
Intent to spend: India’s confident consumer
India stands out as the most resilient consumer market in the region. Supported by robust GDP growth and low unemployment,5 Indian consumers are closing 2025 with strong spending intent across both essentials and discretionary categories—a sharp contrast to the caution prevailing in much of the world. This confidence aligns with the country’s consistently positive net sentiment.
The only outlier is the boomer generation, whose discretionary spend intent remains muted. The number of boomers who intend to splurge has dropped 25 percentage points since the fourth quarter of 2024, underscoring a widening generational divide in spending enthusiasm. Younger consumers, particularly Gen Z and millennials, continue to drive demand in categories such as technology, leisure, and personal care—suggesting India’s consumption engine remains firmly in motion.
Splurge behavior: Japan’s quiet optimism
In Japan, net sentiment remains lower than in most APAC markets, but the trend is unmistakably positive. For a country long known for its conservative consumer outlook, the recent rise in optimism to 16 percent—the highest since the pandemic—marks a meaningful shift. Pessimism has dropped by ten percentage points from the previous quarter, primarily driven by low unemployment and a buoyant stock market.6 Concerns about tariffs are also easing, falling from 23 percent of consumers in the second quarter to 9 percent this quarter, signaling greater stability in the trade environment.
Yet, despite these encouraging indicators, intent to spend remains largely negative, even for essential items. There is an exception: intent to spend on travel is notably high, with a clear preference for domestic travel. This trend is likely driven by the weaker yen, which has made international travel more expensive for Japanese consumers and could be encouraging them to explore local destinations instead.7
This suggests that while consumers feel more economically secure, their behaviors have yet to fully align with improving sentiment—a familiar pattern in Japan’s cautious consumption landscape. The gradual improvement, however, points to potential upside for companies that can convert optimism into action through trust, innovation, and experience-driven engagement.
APAC’s mix of caution, resilience, and polarized market sentiments reveals opportunities for companies looking to capture growth in the market. By fine-tuning strategies, investing in local insight, and remaining nimble as sentiment evolves, organizations can position themselves to capitalize on changing behaviors in the region.
For more insights and updates on the state of the APAC consumer, visit our ConsumerWise page or contact us for additional information.
