Consumers have not reduced all spending uniformly, even as inflation and living costs have risen. They scrutinize prices when buying necessities and frequently purchased goods, yet willingly spend more on health, personal interests, travel, and experiences they consider important. The consumer market is not simply splitting into high- and low-price segments. It is being reorganized so that thrift and premium spending intersect within the same person’s wallet.

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One of the most common expressions used to describe the consumer market today is “consumption polarization.” It refers to a market in which high-income consumers purchase expensive products while middle- and lower-income consumers move toward cheaper alternatives, causing both ends of the market to grow. This explanation is valid to some extent, as premium products and ultra-low-priced products are indeed expanding at the same time.

However, the current transformation in consumption cannot be fully explained by polarization between income groups alone. Even consumers with similar income levels make completely different price choices depending on the product and the situation. A consumer may carefully compare private-label and discounted products when buying groceries, yet visit a high-end restaurant on the weekend. The same person may buy clothing from a low-cost online platform while paying a high price for a smartphone or exercise equipment. Someone may continue driving an older car to reduce expenses while actively spending money on overseas travel or hobbies.

Thrifty consumers and premium consumers are not necessarily separate groups. Both tendencies coexist within the same individual. Consumers no longer try to raise the quality of every part of their lives to the same level. They minimize spending in areas they consider unimportant and concentrate their resources on areas that hold greater personal meaning. The center of consumption is shifting from the general improvement of living standards to the realization of individual priorities.

For this reason, the current phenomenon is more accurately understood as the “re-segmentation of consumption” rather than simple consumption polarization. Re-segmentation refers to a market in which consumers are no longer divided only by traditional criteria such as income, age, and occupation, but are continuously reorganized according to product category, situation, values, and purpose of use. The same consumer may compare the lowest prices in the morning and choose a premium product in the evening. A market is emerging in which consumer identity is no longer fixed to a single price level.

The expansion of the ultra-value market cannot be explained solely as a temporary form of recession-driven consumption. The accumulated rise in prices since the pandemic, along with the burden of housing, food, and energy costs, has fundamentally changed consumers’ perception of price. As many prices remain elevated instead of returning to previous levels, consumers have begun to change not only how much they buy but also how they select products.

In the past, value for money meant a product that offered reasonably good quality relative to its price. Today, ultra-value consumption is closer to eliminating unnecessary costs while securing only the essential functions. Consumers are unwilling to pay for brand recognition, elaborate packaging, or excessive additional features, but they do not want to sacrifice the performance and convenience they actually need. They are not simply choosing the cheapest product available. They are trying to maximize the utility obtained from every amount they spend.

This trend is supporting the growth of private-label products from major retailers, warehouse-style stores, fixed-price stores, and ultra-low-cost e-commerce platforms. Private-label products are no longer viewed merely as inferior substitutes. As their design and quality improve, consumers increasingly compare actual performance and price rather than relying on the name of a well-known manufacturer. Brand loyalty is weakening particularly in frequently purchased categories such as food, household goods, and basic apparel, while price-to-utility performance is becoming the central criterion for selection.

The spread of ultra-low-cost platforms reflects the same development. Consumers may accept certain inconveniences in delivery time or service quality when the price difference is sufficiently large. This tendency becomes stronger for products that are used infrequently or carry a low cost of failure. In categories such as mobile phone accessories, storage items, decorations, and simple household tools, where exceptional quality is not essential, price often becomes more visible than the brand.

Ultra-value, however, does not mean low quality. Consumers want low prices, but they have not lowered their expectations for quality. As online reviews and price comparisons have become routine, shoppers carefully examine durability, function, safety, and delivery reliability even for inexpensive products. A low price alone is no longer enough to persuade consumers. The product must create confidence that it offers an acceptable level of performance for the amount paid.

Competition in the low-price market is also becoming increasingly sophisticated. Simple price cuts can damage both cost structures and profitability. Successful ultra-value products do not indiscriminately eliminate functions. They precisely remove elements that consumers do not consider important. Packaging is simplified, product ranges are reduced, distribution stages are shortened, and advertising costs are lowered, while core performance is preserved. Ultra-value is not merely a strategy for making cheap products. It is a strategy for redesigning cost structures and customer utility.

The growth of ultra-value consumption does not mean that premium spending is disappearing. In fact, selective premium consumption is becoming more visible as consumers save on routine expenses and concentrate the resulting financial room in specific areas. The tendency to upgrade every product slightly is weakening, but the desire to choose something decisively better in personally important areas remains strong.

An important change in premium consumption is that a brand name alone is no longer enough to justify a higher price. Consumers now demand more reasons before buying an expensive product. They ask whether the quality is genuinely superior, whether the user experience is distinctive, whether the product saves time, whether it expresses personal taste and identity, and whether it can be used for a long period. A price tag does not create premium value. Premium value is created by a difference that consumers can actually experience.

Health and wellness are areas in which selective premium spending is particularly visible. Consumers may reduce ordinary living expenses while continuing to spend on medical examinations, exercise, sleep management, functional foods, and skincare, all of which are connected to long-term quality of life. For younger generations in particular, health is no longer limited to treating disease. It has become an activity for managing daily life and personal performance. Products with clearly demonstrated ingredients, effectiveness, expertise, and convenience are more likely to justify higher prices than products that are merely expensive and luxurious.

Similar changes are appearing in experiential consumption such as travel, culture, and dining. Consumers may choose memorable experiences rather than owning a larger number of physical goods. They may compare grocery and delivery costs in everyday life while visiting an expensive restaurant or hotel on a special occasion. They may reduce airfare by choosing a low-cost airline while spending more on accommodation or local experiences. Instead of upgrading an entire trip, consumers selectively choose premium options only in the areas that provide the greatest satisfaction.

Selective upgrading also appears in technology products. Consumers may pay a high price for smartphones, laptops, and cameras that are used frequently and strongly influence daily life, while choosing inexpensive accessories or consumable items. This is a form of combination consumption in which money is spent on the core product and saved on peripheral elements. Consumers do not upgrade an entire product category. They upgrade only the points of contact they consider important.

Premium consumption is also shifting away from display and toward personal satisfaction and efficiency. Materials, functionality, service, and personalization are becoming more important than highly visible logos. The reason for buying an expensive product is increasingly based on how much time it saves, how comfortable an experience it provides, and how long it can be used, rather than the simple fact of owning something costly. The center of premium consumption is moving from symbolic ownership to experienced value.

As premium and ultra-value segments grow simultaneously, the middle price tier faces the most difficult position. Moderate quality at a reasonable price was long the central strategy of the mass market. However, as consumers compare price and quality more precisely, middle-priced products without a clear reason for purchase are increasingly likely to be excluded.

Such products are more expensive than low-cost alternatives without offering a clearly superior level of quality, yet lack the experience and symbolic value of premium products. Consumers are not rejecting middle prices themselves. They are rejecting products that fail to provide a convincing reason for choosing the middle. When a product is not particularly strong in quality, service, design, or accessibility, consumers may decide either to pay slightly more for something better or to choose a much cheaper option.

In the past, limited information protected the middle market. Consumers found it difficult to compare every product and often chose a familiar brand or a nearby store. Today, search tools, reviews, and price-comparison services are deeply embedded in the purchasing process. Consumers can check the prices of similar products in real time and examine the experiences of other users. The psychological security once provided by middle-priced products is weakening, while products that cannot explain the relationship between price and value are rapidly replaced.

The crisis of the middle market is not limited to consumer goods. Similar developments are appearing in dining, accommodation, education, finance, and content subscriptions. In dining, reasonably priced convenience food and premium restaurants offering distinctive experiences may each attract customers, while establishments that charge relatively high prices for ordinary experiences struggle. In accommodation, the position of undifferentiated mid-range properties may weaken between low-cost lodging that provides only essential functions and premium accommodation that offers a distinctive experience.

This does not mean that the middle market will disappear completely. Demand will remain when a product provides clear advantages in accessibility, reliability, service, or quality assurance. The problem is that being “average” is no longer sufficient reason to be chosen. Like low- and high-priced segments, the middle tier must clearly explain why it deserves to exist.

To understand the re-segmentation of consumption, businesses must abandon the habit of viewing consumers as fixed types. The same person may use a discount coupon for a weekday lunch and reserve a famous restaurant for the weekend. Someone may look for promotional products at a convenience store while buying coffee from a premium specialty shop. It is also common to purchase inexpensive basic clothing while spending heavily on a particular bag or pair of shoes.

Such behavior is neither contradictory nor impulsive. It is the result of consumers reallocating their budgets according to their priorities. Saving in areas that matter less makes it possible to gain greater satisfaction in areas that matter more. Ultra-value and premium consumption are not opposing phenomena. They are two parts of a single consumption strategy.

The spread of online shopping and mobile payment has further accelerated this re-segmentation. Consumers can compare numerous price levels and brands whenever they need to make a purchase. They are no longer tied to traditional distribution channels and freely combine domestic and overseas platforms, secondhand trading, subscriptions, rentals, and group purchases. Ownership of a new product is no longer always necessary. Consumers may use a product only for the period needed or pay only for the experience it provides.

The growth of secondhand trading is also about more than saving money. Consumers can sell unused possessions to finance new forms of interest-based spending and gain access to expensive products at a lower cost. They separate ownership from use and calculate real cost by considering both purchase and resale. The duration of use and residual value become more important than the displayed price alone.

Subscription services represent another form of re-segmentation. Consumers repeatedly pay for services they use frequently but quickly cancel subscriptions with low utilization. In the past, people often maintained several services without much thought. As living-cost pressures have increased, they now examine the frequency of use and benefits of each subscription. Even small monthly payments are recognized as cumulative expenses, dividing the subscription market into services considered essential and those considered unnecessary.

In the age of re-segmented consumption, businesses must help consumers understand and accept the price. Ultra-value products must show how they can provide necessary functions at a low price, while premium products must prove why a higher price should be paid. Explaining the relationship between price and value has become more important than simply setting the price.

Transparency and simplicity are competitive advantages in low-priced products. Complicated options should be reduced and core functions presented clearly. Price, volume, performance, and delivery conditions should be easy to understand so that consumers do not need to spend excessive time comparing alternatives. The product must not be cheap but unreliable. It must be cheap for clearly understandable reasons.

Premium products require a differentiated experience. Not only superior materials or technology, but the entire process, including pre-purchase consultation, delivery, installation, and after-sales service, must correspond to the price. A product may appear luxurious, but if customer service is inconvenient or quality management is inconsistent, the premium image can quickly collapse. A high price must be justified not by the product alone but at every point where the customer encounters the brand.

Companies must move beyond a simple dual strategy of pursuing discounts and premiumization at the same time. Merely attaching a discount label to the same product or changing the packaging to charge a premium price is unlikely to remain effective. Ultra-value and premium markets require different operating structures. In the low-price segment, product simplification, large-scale procurement, and efficient logistics are important. In the high-price segment, research and development, design, customized service, and brand experience are essential.

When a single company enters both areas, it must also distinguish their respective roles. If low-priced products damage an established premium image, or premium products fail to show a meaningful difference from basic products, internal competition may intensify. Brands, distribution channels, product names, and service levels should be differentiated so that consumers can clearly understand the purpose of each offering.

The re-segmentation of consumption is also changing the way businesses analyze customers. Dividing customers only by age, gender, and income is increasingly inadequate. A high-income consumer may search for the lowest price in one category, while a lower-income consumer may choose a premium option in an area that holds personal importance.

Companies must examine not only who makes a purchase, but when, why, and under what circumstances it is made. The same customer may have different willingness to pay when buying a gift than when purchasing an item for everyday personal use. Consumers pay for convenience when they lack time but compare prices when they have more time. They choose trusted brands when the cost of failure is high and experiment with inexpensive alternatives when the risk is low.

Market research must therefore shift from average preferences to situation-specific choices. It is more useful to determine which features consumers are willing to give up and which they insist on preserving than to ask which price range they generally prefer. Product design and pricing strategies can become more precise only when companies distinguish between functions consumers are willing to pay for and functions that can be reduced to lower costs.

The use of data must also move beyond a simple analysis of purchase history. A customer who repeatedly purchases low-priced products should not automatically be judged as having no potential for premium purchases. That customer may buy expensive products in another category. Businesses must examine behavior across brands and product groups to identify the patterns of thrift and upgrading that coexist within the same person.

The re-segmentation of consumption is likely to continue to some extent even after economic uncertainty eases. Inflationary pressure has left consumers with the habit of comparing prices, while digital platforms make it possible to find cheaper alternatives at any time. At the same time, the growing importance of individual tastes and values is reinforcing concentrated spending in areas consumers personally consider important.

Consumers are likely to consume more precisely rather than simply consume more. They will compare function and price carefully for basic products while accepting higher prices for special products based on experience and meaning. They will distinguish more carefully between what must be owned and what can be rented, what must be purchased new and what is sufficient secondhand, and where money should be saved or invested.

Businesses therefore need a strategy that makes the reason for choice clear rather than one that merely seeks an average middle position. In the ultra-value market, it is important to determine what should be removed and what must be preserved. In the premium market, companies must prove the difference justified by the higher price throughout both the product and the service experience. The middle price tier must also secure a clear advantage in convenience, reliability, or accessibility.

Consumers do not always want the cheapest option, nor do they always want the best option available. They spend on values they consider important and save in areas they do not. In a market where premium and ultra-value segments grow together, competitiveness depends not on whether the price is high or low, but on how clearly the product explains why that price should be chosen.

Deloitte, January 2026, 2026 Consumer Products Industry Global Outlook

McKinsey & Company, April 2026, The State of Grocery Retail Europe 2026

Bain & Company, November 2025, Asia-Pacific Consumer Products Report 2025

PwC, June 2025, Voice of the Consumer Survey 2025

McKinsey & Company, May 2025, The Future of Wellness Trends Survey 2025