Thai consumers present a paradox: low confidence in the economy yet resilient discretionary spending. This paradox mirrors dynamics seen in developed countries and regional peers like Indonesia, Malaysia and the Philippines, and it presents a complex consumer behaviour landscape that modern businesses must navigate.
Despite a tight wallet, consumers across the financial spectrum are making adjustments and compromises to satisfy their wants. A young professional worker in Bangkok buys the latest smartphone through staggered instalments, while a construction worker takes his family out for dinner but waits for the month-end sale to restock the monthly groceries. Some groups borrow to maintain their lifestyles – a troubling cycle of debt and spending that warrants attention from both consumers and businesses
The inherently similar yet contrasting behaviours across different financial strata reflect the changes in how consumers across Thailand are managing their finances and making trade-offs based on personal circumstances.
Boston Consulting Group’s (BCG) latest consumer research surveyed 3,000 respondents across Thailand to assess the complex and dynamic consumer landscape. The study explored household finances, attitudes toward income, debt, spending and saving, and the decision-making drivers behind consumption.
Overall sentiment and impact on spending
Overall confidence in the economy is low, with more than 60% of Thai consumers rating the current economic situation as ‘poor’ or ‘very poor’. The mass affluent consumer (MAC) – spanning households with monthly income of 15,000 baht or more – remains the most optimistic (feeling ‘good’ or ‘very good’ about the economy), but sentiment in lower income groups is deeply subdued both nationally and compared to regional peers. For reference, optimism around personal financial stability among Thais (39%) is comparable to the Philippines (35%) or Indonesia (47%), but significantly lower than the bigger economies of the region, namely China (59%) and India (61%).
This subdued sentiment mirrors broader national conditions. Political and economic uncertainty, a weak job market, limited income mobility among lower-income households, and some of the highest consumer debt levels in emerging markets have all dampened confidence and constrained spending.
When it comes to spending, necessities continue to take the most substantial bite out of already stretched wallets. The contrast between MAC and lower-income consumers is stark. MAC households still manage to funnel surplus funds into lifestyle upgrades and investments, while lower-income families remain anchored to basic necessities and small-ticket wants, often by drawing down on their savings. This disparity highlights the widening divide between the ‘haves’ and the ‘have-nots’.
Navigating the balance of want and need
Despite the backdrop of pessimistic consumer sentiment, Thai consumers stand out for how they juggle wants and needs in their spending decisions.
Contrary to conventional wisdom – and indeed their own claims – Thai consumers’ share of spending on discretionary categories continues to hold steady or grow. As cited in BCG’s Global Consumer Radar surveys, consumers typically don’t predict broad economic trends realistically; consequently, their predicted responses to those trends are not realistic. Similarly, for Thai consumers, broader economic outlook doesn’t impact their discretionary spending commitment. Even in a scenario where there is an income dip, discretionary spending takes around a quarter (22% to 25%) of total consumer spend.
This provides a glimpse into a consumer’s underlying desire for affluence and aspirational lifestyle goals – Instagram-worthy vacations, expensive goods, dining out, and similar hallmarks of status.
These aspirations show up in everyday choices, as consumers trim routine expenses to make room for the experiences and products they value most. Everyday staples are the first items of ‘need’ that we see pruned. This adjustment doesn’t manifest only as buying less volume, but in a variety of other different ways – buying items with discounts or buying more affordable brands.
This sacrifice of everyday needs to fulfil aspirations provides two clear takeaways for marketers seeking to appeal to the modern consumer.
The first opportunity lies in capturing a greater share of discretionary spending – not always on luxury products, but on items that give consumers the sense of a lifestyle upgrade. Sephora shows how this can work in practice – offering its own private-label products as affordable luxuries, while stocking prestige brands alongside them in the same stores. This offers consumers a unique mix of experiencing luxury while keeping spends on ‘wants’ in check.
The second opportunity is in value-tier offerings for essential goods such as groceries and household products, which many consumers view as a practical way to save costs. Muji exemplifies this approach by spanning the spectrum – from affordable essentials like cotton fabrics and basic storage solutions at the entry level, and scaling upward through premium offerings such as specialty textiles, compact modular furniture and other curated lifestyle products – thus enabling consumers to exercise choice and control over how much they spend, even on essential items.
Understanding the credit landscape
Spending and credit go hand-in-hand, meaning a full picture of Thai consumers must also take into account the current debt environment. Roughly one-third of Thai households carry 80% of personal debt, excluding mortgage and educational loans. This underscores a heavy debt mountain for a significant minority of the population.
Interestingly, these ‘top-debtors’ are notably skewed towards specific income segments. Almost 2 in 3 of these top-debtors are from the middle-class segment with a monthly household income of between 15,000 and 49,000 baht and hold about 3 times more debt than an average Thai consumer.
Understanding the complexities of this top-debtor landscape has important implications for consumers and businesses.
Top debtor danger zone
The delicate balance of ambition and means is creating pitfalls for top-debtors in Thailand. The spiral to borrow more to spend more begins by embracing a borrowing lifestyle, giving in to aspirations beyond the realities of household finances.
This borrow-to-spend mindset is pushing top debtors deeper into an expanding debt hole with loan values for this group rising six times faster than the average consumer’s over the past year. They also have a debt-to-service ratio that’s double the average. Compounding the problem, three out of four top debtors have not increased their repayments in the past year. Together, these dynamics signal growing momentum toward a debt spiral for this segment.
These debt dynamics tell an important story for Thailand’s economy. On one hand, they signal a growing willingness to borrow – especially among middle-class households, who are now the top borrowers. On the other, they expose the vulnerability of lower-income families, many of whom carry non-productive debt.
A sharper focus on risk assessment in debt financing is critical to curbing defaults. The Bank of Thailand introduced updated ‘Responsible Lending’ regulations effective January 31, 2025, to strengthen fair treatment and management across the entire loan lifecycle – from product design to debt transfers – aimed at more effectively resolving household debt issues.
Ultimately, Thailand’s paradox of subdued confidence and resilient spending underscores both risk and opportunity. Consumers continue to reach for lifestyle upgrades even as debt mounts, creating growth potential for businesses and responsibilities for lenders. Broadly speaking, while long-term structural growth in MAC is still robust for a middle-income market like Thailand (MAC population is expected to grow by 14% over the next 10 years), there is a need to navigate the short-to-mid-term effectively. The path forward lies in reconciling ambition with financial discipline – fostering sustainable consumption without fuelling unsustainable debt.
Special thanks:
The authors would like to thank Aditi Bathia (Expert Project Lead, Center for Customer Insight [CCI], Boston Consulting Group) for contributing her insights to this article.