Economic outlook and forecasts Asia Pacific consumer spending: What to expect in 2026

February 2026 – In 2026, Asia Pacific will remain the largest and fastest-growing consumer market in the world. But the spending patterns of this vast yet disparate group of consumers are often characterized by somewhat contradictory trends: Young consumers in the region face an uncertain labor market while fueling passion-driven purchases; developing countries are minting new luxury buyers faster than their wealthy counterparts; and aging consumers are spending big on leisure. Going beyond the news headlines of trade tensions and economic concerns, here are five key consumer trends to keep an eye on—creating potential new opportunities for Asian brands and merchants in the year ahead.

Highlights:

• The cautious consumer prevails
• The passion economy takes center stage
• Affluent Asians will redraw the luxury map
• Silver economy comes of age
• AI-powered commerce gains traction

The cautious consumer prevails

Economic anxiety will define consumer behavior across the region in 2026. Despite weathering recent geopolitical turbulence quite well, consumer confidence remains weak across many of the region’s countries and territories. In Mainland China, the region's largest market, consumer sentiment fell slightly below 90 in the fourth quarter of 2025—down from a peak of 124.4 in mid-2021. In Taiwan and Australia, as well, the sentiment remained mostly unfavorable in 2025. New Zealand saw some improvement but remained below 2020-21 levels.

Global uncertainties are making consumers uneasy, but so is the employment scenario. Trade tensions continue to pose risks for export-dependent markets like Mainland China and Vietnam, while artificial intelligence threatens entry-level office jobs in the Philippines and India.

Youth unemployment deserves attention in Mainland China and India, the region's two largest consumer markets. In Mainland China, youth joblessness stood at 16.9 percent in November 2025.¹ India, which has outperformed global peers in hiring, could see hiring volumes dip in early 2026.²

On the other hand, inflation has moderated, offering some relief, but affordability remains a concern, especially as the base-effect benefits for food prices fade in 2026. After years of above-target inflation in major economies like Japan and Australia, consumers care less about runaway prices and more about whether they can afford everyday purchases. For businesses, simply slowing price hikes will not be enough. Demonstrating clear, tangible value will be essential to winning over cautious consumers.

The passion economy takes center stage

As the youngest millennials prepare to turn 30 in 2026, the mantle of ‘kidults,’ those clinging on to youthful pursuits, will pass to Generation Z. But this new cohort of consumers will not be easy to decipher, as their spending patterns reflect a tension between financial pressure and emotional drivers. Competition for entry-level office roles is pushing many young adults toward the gig economy,³ forcing more cautious, value-oriented budgeting. At the same time, Gen Z is spending freely on categories tied to identity and community, fueling a passion economy built around anime, K-pop, e-sports, niche gaming and other fandoms.

In Japan, nearly half of workers in their twenties engage in "oshikatsu"—a local term for indulging in fandom activities, supporting favorite idols or anime characters, buying merchandise and attending events.⁴ This spending appears largely unaffected by inflation. In Mainland China, plush soft toys, concert tickets, rare anime and comics serve as both emotional outlet and status symbol, with Gen Z consumers on average spending $133** per month on these items.⁵ Social media fatigue among digital natives is also driving demand for certain offline connections, further strengthening the trend.

If passion offers clues to Gen Z’s spending intent, their housing situation can help explain their purchasing power. With rent and property prices at record highs, many young people are returning to or remaining in their parents' homes—in some cases leaning into the multigenerational living culture of certain markets—reducing their fixed costs and boosting their purchasing power. Data from Singapore shows that while the overall number of households with children has been declining, households with a youngest child over 16 years of age rose by over 12 percent in 2018 to 2024—evidence of Gen Z staying home longer and freeing up income for discretionary spending.

**Note: Unless otherwise mentioned, all $ values in this report refer to the U.S. dollar.

Affluent Asians will redraw the luxury map

The region's consumer landscape is undergoing a structural shift as rising affluence in developing economies fuels demand for premium goods and experiences. Visa Business and Economic Insights analysis of anonymized VisaNet data suggests that Mainland China will remain the anchor, with expected luxury spending of $89.8 billion and 13 percent growth in 2026.

But the most dramatic story is India, where the luxury market is forecast to surge 20 percent to $22.6 billion, driven by urbanization, a strong tech startup ecosystem and a young demographic eager for status-affirming purchases. This pattern repeats across Southeast Asia: Indonesia's luxury market will reach $3.1 billion while Thailand's hits $3.3 billion, both expanding at double-digit rates. In contrast, Japan's flat trajectory at $30.9 billion reflects a sizable but mature market affected by demographic headwinds.

The strategic implication is clear: Brands must look beyond established markets like Japan, Hong Kong, Singapore and Mainland China for faster growth. Emerging affluent consumers in developing markets are seeking accessible entry points into premium lifestyles. Success requires localized strategies that understand these aspirational consumers rather than simply transplanting approaches from mature markets.

Silver economy comes of age

Asia is aging faster than many realize, and this holds implications for the consumer economy. In 2026, the share of population aged 65 and above will surpass 15 percent in Mainland China and Singapore, while approaching 25 percent in Hong Kong. In fact, only 6 out of 16 countries we studied in the region will have a share of the aging population below the global average of 10 percent.⁶

This isn't just a story about developed economies: Developing economies like Thailand and Vietnam are catching up quickly. While those above 65 will represent nearly 10 percent of Vietnam's population, the share stands at 16.7 percent for Thailand. Even India, the world’s most populous and still a very young country, has seen the national fertility rate dip below the population replacement rate of 2.1.⁷

While aging populations fuel concerns of slowing productivity and rising healthcare and other social costs, it is helpful to remember that this growing senior cohort commands significant disposable income and assets, amassed during decades of sustained economic growth.

While healthcare and essentials claim a portion, discretionary spending of senior citizens is not insignificant. In Mainland China, State Tax department data shows revenue from fitness equipment, rehabilitation aids and nutritional products for the elderly grew 15 percent, 12 percent and 7 percent respectively in the first half of 2025, while revenue from elderly-friendly travel and entertainment surged by 20 percent.⁸

Japan demonstrates the same pattern. Senior households allocated over 11 percent of their significant monthly expenditure to culture and recreation in 2024. This silver economy is moving beyond necessity, creating robust markets for businesses that can cater to the wellness, leisure and entertainment demands of an active and affluent older generation.

AI-powered commerce gains traction

We expect 2026 to mark a significant step toward the mainstream adoption of agentic commerce—AI-powered assistants and platforms that automate and personalize the shopping process. The region’s tech-savvy consumers, already accustomed to e-commerce, digital payments and social commerce, are primed for this evolution. In fact, they are often more enthusiastic than their global counterparts when it comes to innovations around shopping and financial planning.

Familiarity and usage of generative AI tools is also growing. In Australia and New Zealand, AI usage among the working‑age population stands at 34 percent and 37 percent, respectively. Consumers across Singapore, Taiwan, South Korea and Vietnam also report strong adoption, scoring over 20 percent.⁹

However, widespread adoption of AI‑driven e‑commerce will depend on a clear value proposition. AI agents that save consumers time, help them find better deals or reduce friction in product discovery are likely to gain traction fastest. Yet concerns will remain—particularly around privacy and control. Consumers are often hesitant to share personal data with AI agents and even less willing to grant access to financial information. Businesses hoping to lead in this space will need to ensure their systems are not only valuable and convenient, but also transparent and trustworthy.

In the meantime, consumers are increasingly turning to AI for product discovery and comparison. As AI‑based search integrations expand across e‑commerce platforms, merchants will need to ensure that their products and services are easily discoverable on these applications. This will help ensure their offerings are accurately represented on AI‑driven apps, while building consumer familiarity and confidence with a new way of shopping.

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Footnotes

Forward-Looking Statements

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