Consumer confidence across the Asia Pacific has recorded one of its steepest declines since the COVID-19 pandemic, as economic shockwaves from the ongoing US-Iran conflict ripple through energy markets, household budgets and perceptions of global influence, according to a new report by Ipsos.
The report links the downturn in sentiment directly to rising fuel costs, inflation anxiety and growing economic uncertainty, with five of the six largest global declines in consumer confidence now coming from Asia Pacific nations.
Thailand recorded the sharpest fall at 10.9 points, followed by Malaysia (6.1), South Korea (5.1), Japan (4.7) and Australia (4.5), in line with Ipsos’ Global Consumer Confidence Index, which has dropped by two points to 46.7.
Ipsos said the trend marks one of the most pronounced regional shifts in sentiment since the pandemic and is reshaping how consumers view global brands, trust and economic stability.
Energy Costs Driving Household Anxiety
According to Ipsos, the most visible economic transmission of the conflict has been through energy markets. Countries heavily dependent on imported oil, including Japan, South Korea and India, have been particularly exposed to volatility in supply and pricing.
Across Southeast Asia, governments have responded with targeted interventions, while consumers have begun adjusting behaviour in real time, becoming more value-conscious and selective in spending.
Ipsos’ What Worries the World Monitor reinforces this shift, showing a marked fall in the proportion of people who believe economic conditions are ‘good’. The steepest drop was in South Korea, where just 25 per cent now hold that view, down 17 percentage points. Australia fell to 37 per cent, down 11 points, and Thailand to 29 per cent, also down 11 points. Singapore, Malaysia, Indonesia and Japan recorded similar declines.
Shunichi Uchida, Ipsos Country Manager in Japan, said, “Japan is highly exposed via energy imports. The conflict shows the difficult trade-off between energy security and climate commitments which is driving fuel price spikes, inflation, and supply risk, pressuring firms and consumers, with discretionary spending falling.”
In South Korea, Ipsos Country Manager Hwanglye Park said, “Seoul has introduced temporary fuel price caps and drawn on PLG reserves, and prepared support for affected exporters and middle-to-lower income households. These measures show how closely energy volatility is tied to consumer behaviour. For brands, the priority is to offer stability, practical value and reassurance.”
Reduced Mobility, Deferred Spending
In the Philippines, Ipsos Country Manager Vicky Abad said rising diesel prices have outpaced other Southeast Asian markets, prompting the government to declare a National Energy Emergency.
“We’re seeing reduced mobility, deferred spending, and early signs of softer Overseas Filipino Workers remittances,” she said.
In India, Ipsos Country Manager Suresh Ramalingam said, “The Iran conflict is testing India’s resilience. Higher import costs are pushing consumers toward essentials, and the government has introduced measures like ‘low flame menus,’ fuel-saving cooking alternatives, and incentives for renewables and electric mobility. These initiatives reflect India’s dual push for affordability and sustainability, with brands that emphasise resilience and innovation best placed to connect with cautious consumers.”
Ipsos said these behavioural adjustments are becoming visible across the region as cost pressures filter through households and small businesses.
Trust In ‘Brand America’ Weakens
Alongside economic stress, Ipsos found a significant shift in perceptions of global influence. Trust in what the report describes as “brand America” is weakening, with just 39 per cent of respondents across 30 countries now viewing the United States as a positive force in world affairs.
In contrast, perceptions of China’s influence are strengthening, particularly across ASEAN nations, where positive views exceed 70 per cent in several markets. Malaysia recorded 83 per cent, Indonesia 81 per cent, Thailand 74 per cent and Singapore 71 per cent. Sentiment remains more cautious in Japan and South Korea, at 18 per cent and 23 per cent respectively.
Ipsos said this divergence signals a broader realignment in how reliability and global power are perceived in the region.
Hamish Munro, Ipsos Chief Executive for APEC, said, “With trust in ‘brand America’ weakening and Asian brands now gaining momentum, businesses need a total understanding of local expectations to stay relevant.”
Nationality Becoming A Brand Signal
The report found that these geopolitical shifts are directly affecting brand perception. Country of origin, Ipsos said, is no longer a passive label but an active signal shaping trust and purchase intent.
American brands are facing greater scrutiny in many markets, while brands of Asian origin are gaining legitimacy and relevance across sectors.
Ipsos data shows consumers in Asia Pacific are more likely than the global average to believe that global brands make better products than strictly local ones — 60 per cent in Thailand, 59 per cent in Vietnam and Malaysia, and 55 per cent in Singapore, compared to 42 per cent globally. However, the rise of global brands from Asia is altering how consumers interpret that distinction.
The report concludes that Asia Pacific is absorbing the conflict primarily through energy costs, inflation anxiety and weakening confidence, leading consumers to become more selective about whom they trust.
As economic pressure moves through households and businesses, Ipsos said brands that emphasise reliability, practical value and local relevance are likely to resonate more strongly with cautious consumers navigating uncertain conditions. |
