Tag Archives: China

China’s youth high demands for low carbon goods

Businesses have been urged to accelerate their environmental footprinting strategies to include emerging economies, after new research by the Carbon Trust revealed young people in China could hold the key to unlocking mass demand for greener products.

chinese_market_youth

The survey of 2,800 young people across six countries carried out by TNS found 83 per cent of 18-25 year-olds in China would be more loyal to a brand if they could see it was reducing its carbon footprint. In contrast, just 57 per cent of US respondents and 55 per cent of young people in the UK made the same claim.

Globally, 78 per cent of young people said they want their favourite brands to reduce their carbon footprint, but again those in Chinese showed the highest demand for emission reductions with 88 per cent calling on firms to cut their footprint.

South Africa came in second place with 86 per cent of respondents calling on blue chips to reduce their impact, followed by Brazi at 84 per cent. Again the US and UK lagged far behind with only two thirds of respondents demanding more action from big brands.

The analysis was launched just days before the Carbon Trust unveils the first four Asian companies to receive the Carbon Trust Standard, its independent label awarded to companies that reduce their organisational carbon footprints year-on-year.

Tom Delay, Chief Executive of the Carbon Trust, said the survey results were “startling”, in that they revealed how Chinese consumers could lead the global demand for greener goods.

“Sixty per cent of young adults questioned in China would stop buying a product if its manufacturer refused to commit to measuring and reducing its carbon footprint, compared to just 35 per cent of those in the US,” he said.

“Perhaps it is the Chinese, and not the US. consumer, that really holds the key to unlocking the mass demand for new low carbon products necessary to deliver an environmentally sustainable economy.

“If global brands don’t build international carbon reduction strategies even faster, they risk missing out on the spending power of emerging economies.”

The research also revealed that Brazilian young people showed the greatest demand for companies to be transparent about their action on carbon, with 81 per cent demanding that brands to provide proof they are reducing their carbon footprint.

British young people showed a high awareness of the term “carbon footprint”, but only half claimed to be concerned about climate change.

via China’s youth reveal ‘startling’ demand for low carbon goods – 02 Apr 2012 – News from BusinessGreen.

How fast is the Chinese market changing?

According to a recent McKinsey’s survey about Chinese consumers, Chinese have taken to consumerism with ease, embracing thousands of new products, services, and brands. Three findings stood out.

Even in the face of rising inflation, Chinese consumers are more confident this year than in 2010 about their financial prospects.

the survey shows that the number of respondents who choose to spend more—buying in greater quantities, more frequently, or more expensive items in a given category—is holding firm. Whereas last year’s survey showed that consumers offset higher spending in some categories by spending less in others, this year there appears to be much less rebalancing.

Among urban consumers, the number of first-time buyers—a group that has been a major driver of category growth in China—is declining. as so many products are now both available and within the financial reach of large numbers of consumers. Big variations in the importance of first-time buyers have opened up, depending on the category and geographic region. At the geographic level, the penetration of certain goods may be high in China’s more economically developed regions, but plenty of consumer-conversion opportunities remain in less developed ones, which the government has targeted for higher economic growth

 

Finally, although brand awareness is rising, we see little sign that brand loyalty is following suit. In fact, more and more consumers choose among a growing number of favorite brands. The survey shows the extent to which consumers value brands more than price or channel, largely because they believe that branded products are safer, of higher quality, and more reliable than nonbranded ones. But faith in brands still does not translate into brand loyalty. In fact, both the number of consumers who always choose from among a relatively small set of brands—whom we refer to as “repertoire loyalists”—and the number of brands in their repertoire continue to rise. The average Chinese consumer now chooses among three to five brands in any given category, compared with two to three brands two years ago. In some categories, such as apparel, where luxury brands have grown hugely popular, the contrast is sharper still.

To succeed in this environment, executives will need to understand where the growth prospects lie, both at the category level and in different geographic regions. Only then will companies be able to prioritize resources and tailor strategies appropriately, to strike a balance between building mass appeal and meeting the needs of specific consumer groups, to focus on perceived value rather than absolute price, to modernize marketing tools for the Internet age, and to embrace rapidly growing online sales channels quickly. Companies must have both the flexibility to adapt and the skills to innovate to keep in step with the Chinese market’s exciting development.

Where are Retail’s Hottest Emerging Markets?

Wondering whether to open your new fashion store in China or in Brazil but you don’t have any clue? The annual A.T. Kerney’s Retail Index  provides you with a detailed list of the most emerging countries for apparel retail.

The A.T. Kearney Global Retail Development Index (GRDI)™ ranks the top 30 emerging countries for retail development and identifies windows of opportunity for global retailers to invest in developing markets. The GRDI is unique because it doesn’t just identify which markets are bigger or richer, but rather which markets are hotter and bursting with opportunity. The full annual report can be read at this link, but let’s take a quick look at what the report shows.

 

China ranks as the most attractive emerging market for apparel retailers according to a study by global management consulting firm A.T. Kearney. Its first place ranking was driven by the country’s large population and the growing disposable income of the middle class. With its compound annual growth rate of more than 20 percent in recent years, apparel retail in China has grown at a rapid pace, and this trend is expected to continue for the next five years.

China was followed in the ranking by two Middle East Countries, U.A.E. and Kuwait, then by Russia and Saudi Arabia.

The United Arab Emirates holds the second position in the 2011 Apparel Index, driven by a population with a high disposable income and immense fashion consciousness. The expatriate populace and tourism in particular are driving forces of consumption in this market. Additionally, the UAE is a regional commerce center in the Middle East, and is a preferred market for entering the Middle East as well as testing new products and retail formats.

Kuwait is ranked #3 in the Apparel Index. Key factors driving retail growth in Kuwait are a favorable long-term economic outlook, a sophisticated consumer base with high levels of disposable income and fashion awareness, more women entering the workforce, and a significant expansion in retail real estate. The gross leasable retail space in Kuwait has expanded from 345,000 square meters in 2006 to 1.15 million square meters in 2010.

The remaining top ten markets in the 2011 A.T. Kearney Retail Apparel Index are Russia, Saudi Arabia, India, Brazil, Turkey, Vietnam and Chile. (Source: A.T.Kerney)

Coffee and tea drinking habits in Asia: when culture matters.

Evening drinking habits differ from country to country, and this is very important when creating customer-centric food Retail concepts, as our DESITA and ECOFFEE projects are. In Singapore, for example it’s not unusual to see coffee shops packed at 11pm/12 midnight every night of the week including weekends. This experience is replicated across many countries in the region from India to Malaysia, Vietnam to Indonesia.

The culture of drinking in Asia is not about alcohol it’s about coffee and tea. It’s still about friends but it’s sober conversation as oppose to drunken ones. There are more coffee shops in Singapore than bars. Coffee shops are growing at a faster rate in India than any other form of F&B outlet. This appears to be down to more affluence, a desire to eat and drink out and a predominantly non-drinking culture. Of course there are a mass of bars in Singapore and across Asia but these tend to be filled with expats and Chinese and focused on certain areas and linked to Karaoke.

Religiously Muslims, Hindus and Buddhists – the main religions across the region – actively prescribe non-drinking of alcohol to their followers. Singaporean’s are just not brought up to get drunk in the way their English and American counterpart’s inparticular are. This in turn leads to a more civilized society, there are no drink related injuries for hospitals to deal with and society to pay for. There is not the violence that happens every weekend in most towns in the UK, no alcohol means that it just doesn’t happen, it’s just not accepted and not desired.

From a marketing point of view it means that if you want to target these people you have to think in a more sophisticated and creative way. Starbucks may be much maligned but they, Costa and other Western brands are growing in Asia at a rate of knots and along with the monster Asia coffee brands like Gloria Jean’s,Café Coffee Day and Coffee Bean are more effective at reaching many Asians than marketing through bars and alcohol. (Source: BrandRepublic; Picture: 4theloveoffood).

Green Certification Awarded to French Supermarket in China

China Certification & Inspection Group has reportedly issued the Green Market Certification to Carrefour’s six stores in Beijing, making the French supermarket one of the first retailers to gain the certification in the Beijing region.

20110607-135536.jpg

Liu Shengming, chairman of CCIC, told local media that the Green Market Certification has been fully launched in the retail sector of Beijing. Green Market Certification is a national certification system co-developed by the Ministry of Commerce together with the Certification & Accreditation Administration of China. Organizations that have obtained the Green Market Certification are allowed to use the uniform certification board. The Green Market Certification logo can be used in their marketing materials or other relevant information.

Luc Vandevelde, chairman of the Supervisory Board of Carrefour, has revealed the plan for Carrefour’s first green shopping center, where rainwater and energy can be recycled. Compared with a regular architecture, the green shopping center can save up to 30% in water and energy. In addition, it will use efficient materials to reduce the consumption of resources.

China Certification & Inspection Group, Shenzhen Company Ltd. operates a wide network of over 300 offices and laboratories which are located in major ports and cargo distribution centers around the world. With over 20 years’ experience in the inspection and certification field, CCIC has established cooperation relationships with more than 120 inspection and certification companies in over 60 countries and regions, including foreign organizations such as UL, CSA, and TUV Rhineland.(Source: China Sourcing News)

Chinese consumers are willing to pay for sustainability

We have already talked about China as one of the fastest growing markets in terms of customer awareness towards sustainability: Chinese do appreciate and search for sustainability.

A study released on April 18th by global advertising and international marketing firm Ogilvy & Mather answer to the question that our customers usually ask: “Do consumers are willing to pay more for sustainable products?”. The study shows that the answer is “Yes, Chinese consumers are willing to pay a small premium for environmentally friendly products”, but they place responsibility to fix China’s environmental woes on the government.

Convenience is the main factor driving shopping decisions for more than half of the 1,300 Chinese consumers across China, but 71 percent said they would pay up to 10 percent more or higher for some “green” products.

“Within about a 15 percent price band, if two items have comparable brand image, people will go for the sustainable option,” Kunal Sinha, the lead author of the study and head of the company’s sustainability practice in China, told Reuters.

“But if you were going to sell it purely on its sustainability credentials, it wouldn’t fly,” he said, referring to the range of green products and sustainable behaviors covered in the study, from toiletries to food and vacations.

Shoppers were willing to open their wallets the widest for sustainably produced milk, at premiums of 17 to 20 percent, the study said, an indication of how severely scandals involving tainted milk have damaged China’s dairy industry.

The study noted large gaps between the sustainable behavior Chinese consumers profess to and their actual consumption habits, a trend that also exists in developed markets such as the United States.

One measure of their optimism: more than 90 percent of those surveyed said they thought the sustainability movement was growing. But fewer than a fourth or respondents said they felt empowered to solve environmental problems on their own, and instead looked to the government to fix the country’s environmental woes.

Chinese consumers have long been hesitant to loosen their purse strings, more so than consumers in other countries at a similar stage of development. But domestic consumption is picking up quickly and many analysts think it has reached a turning point.

That means Chinese consumers’ buying power may be out-pacing their green ethos. The survey said the concept of sustainable living is not yet mainstream, with respondents saying those leading the movement in China are seen as idealists.

Joel Backaler, a director at the consulting firm Frontier Strategy Group who blogs on Chinese consumption trends, says mainstream Chinese consumers are focused on aspirational purchases in the short to medium-term and will not begin focusing on green and sustainable consumption for years.

“The vast majority of China’s middle class are for the first time learning how to spend and join the consumption phenomenon that their counterparts in the U.S. and Western Europe have long enjoyed,” he told Reuters in an email. (Source: Reuters)

Business Retail: a global view

Retail is big, but how big it is and is it equally distributed worldwide or are there countries where retail is at its best?  

The last CB Richard Ellis Survey  about the business of Retail, reveals how fluctuating this market is, measuring how the most important 323 retailers changed their strategies in 73 countries during the last year.

The survey findings are very interesting, showing us that Dubai is the most favorite city for both American (61%) and European (63%) retailers, while only 23% of retailers from the Asia-Pacific area are present in that city – not because of lack of interest, but just because the Asia-Pacific consumer market is the fastest growing, therefore retailers from those countries do not need to branch out abroad.

Retail expansion rate saw a decrease during 2010, only a 2%, compared with 4% in 2009 and 12% in 2008, with new target countries being India (8 new retailers) and Turkey (7). United Arab Emirates (UAE), Kuwait, Ireland, Romania, and Belgium all attracted six new retailers.

Online retail is becoming more and more important for retailers: 82% of the brands in the survey do have an online catalogue, even though only a smaller percentage (46%) offers to consumers the chance to purchase goods online, with Value&Denim being the most active (43%) followed by mid-range fashion  (26%) and Luxury & Business Fashion (32%). To have an online retail shop is the favored choice by those brands who already have a physical store (46%), while in more advanced market such as the U.S.A., there is a slight percentage of online seller (24%) who do not have a physical store, and that are using online sales platform to test the market before opening a physical point of sale.

Vinitaly opens its doors with interesting data

Vinitaly focus on export and on the Italian market decline.

How to seize the new opportunities coming from abroad, particularly from Asian markets, and how to support the internal Italian market are the two main themes of the 2011 Vinitaly, the most important Italian Wine exhibition,  which is taking place in Verona (Italy), and will end on April 12 .

The Italian wine business is quite a big one, worth € 13.5 billion plus  a €2 billion deriving from induced activities. But there are lights and shadows. For example, on the exports side, 2010 experienced a growth  reaching a +12% equal to 3.93 billion euro, while domestic consumption is decreasing.
For the first time, reports Coldiretti (the Italian association of Agriculture farmers), 2010 showed a stagnation in the internal sales, now at € 3.89 billion. 

Riello, the President of Veronafiere, has stressed even more the wine business critical situation, the decline in domestic consumption, which continues, “was between 100 liters per capita in the Seventies, up to 45 liters in 2007, about 40 liters per person nowadays” showing a “further decreasing trend by 2015. ” The problem, recently highlighted by Giuseppe Martelli, director general of Assoenologi (the Italian Association of oenologists), is that “an oenology structured like the Italian one, cannot rely only on export.”

A couple of data: “in Australia only ten companies produce more than 90% of the wine exported, in Chile of 120 wineries, 100 are working only for export. In Italy, however, companies are more than 450 thousand, with an average size that is below the three hectares, compared to 300 in Chile and Australia. ”

Even a survey Vinitaly Winenews-emerges as foreign markets are critical to revenue growth, a situation that can cope with the larger companies, but few compared to many small enterprises that characterize the Italian production scenario and still have turnover rather weak.

A Vinitaly-Winenews survey on 50 companies among the most representative of the Italian business, show that 2010 ended with an average revenue increase of 8%, driven in particular by exports  (+14%).  As per 2011, the report show a degree of optimism: 75% of the interviewed said to be quite positive, 15% positive while a 10% of wineries that still feels the situation to be critical. The most critical points highlighted by the survey are economy instability, weak consumption, the loss of international competitiveness, the hars internatioanl competition.

The boom in exports, according to Coldiretti, is due largely to the U.S., which in 2010 became the country with the highest consumption of wine in the world. The American market, which is worth about $ 30 billion, is covered for 61% of production in California, but Italian wines are the most consumed ones, growing in value by 11%.

The most important destination of Italian wines are Germany, +4% in 2010, China – exports to this country doubled in 2010 – India, +65%, and Russia, +58%, equal to €104 million.

Coldiretti also analyzed the important value of the employment world of wine: the 250,000 Italian companies create jobs for for 1.2 million people. There are about half a million owners of vineyards, which have about 210,000 employees, of which over 50,000 are young and 30,000 are foreigners. And the wine business does not end in the vineyard, opportunities being in adjacent sectors like trade and catering, glass, cork, label and packaging, as well as research, publishing, finance, wine tourism, health, bio-energy. (Source:manageronline.it)

China retail luxury: a long-term insight

China: a market that is continuously growing, a very rich but still unknown to the many. What is clear is that China is set to become the most powerful economy in the world, and this will happen in a very short time. Many are the companies that have already sucessfully entered the Chinese market, luxury good brands being the pioneers.

A McKinsey survey over 1.500 Chinese luxury consumers during spring 2010, shows interesting trends which are basically telling to the world that the “consumer culture” is changing at a very high speed, following the changes in the society and urban landscape. For those who are interested, the whole report can be downloaded here, but three are main facts:

  • “Rapid increases in wealth, and shifting social mores that sanction the display of that wealth, are driving a growing infatuation for luxury goods among Chinese consumers.”
  • “Access to an explosion of information on the Internet, an increasing penchant for overseas travel, and first-hand experience purchasing and consuming luxury goods are contributing to a substantial rise in sophistication among luxury consumers in China. Contrary to popular belief, a growing number of Chinese luxury consumers are exhibiting a noticeable trend away from overt displays of wealth, and towards more understated forms of luxury consumption.”
  • “Rapid urbanization and growing wealth outside of China’s largest cities is driving the emergence of several new geographic markets with sizable pools of luxury goods consumers. Over the next 5 years, [McKinsey] expects that the number of such cities will double from 30 to 60.”

Other key findings are social-demographics related. Not only traditional luxury brands consumers, but also 13 million upper-middle-class households (earning $15,000 to $30,000), which are stretching their budgets to buy luxury watches, jewelry, handbags, shoes and clothing. This segment represented 12% of Chinese luxury consumption in 2010, but is expected to reach 22% by 2015.

The survey also shows that approximately 73% of luxury consumers in China are under age 45, significantly younger than their counterparts in western nations or even nearby Japan. 

All these findings essentially reinforce the widespread idea that if this trend is going to be followed in 2011 too, China will become the biggest retal luxury market in the close future. (Source: McKinsey, Picture credits: TheChinaObserver)

Luxury and sustainability… a trend we will see more of in China

URBN Hotels & Resorts announced plans for URBN Hotel Pudong, a new green hotel that will become the first positive-impact hotel in China. The hotel is slated to open Spring 2012.

In collaboration with Vanke, China’s largest residential real estate developer, URBN’s 20,000 square metre boutique hotel is part of a larger commercial, retail and residential development in the Sanlin district of Pudong in Shanghai. They have tapped Fumihiko Maki, the world-acclaimed Japanese architect whose current works include the United Nations building and World Trade Center Tower 4 in New York City, to design the project.

The development, which is estimated to cost RMB 312 million (US$47 million), will include 55 hotel rooms, 50 URBN serviced residences, and 4,500 square metres of dining, wellness and art spaces.

URBN created China’s first carbon-neutral hotel, the chic and hip URBN Shanghai in the Jingan district. URBN Shanghai is passionately committed to the environment and is at the forefront of the growing consumer eco-movement in China. URBN tracks the hotel’s entire carbon footprint and offsets it by purchasing carbon credits or investing in local “green” energy development and emission reduction projects. The hotel provides guests the option to find out their footprint during their stay and by donating trees to Jane Goodall’s Roots and Shoots foundation to offset.

For the new URBN Hotel Pudong, Jules Kwan, Managing Director of URBN Hotels indicated that “the aim is to make this hotel go beyond sustainability … the hotel will increase the biodiversity of the site, and will discharge water that is cleaner than the water from the city’s water supply.” The hotel hopes to get LEED and China Green Star certifications. Also, URBN Hotel Pudong aims to surpass the 35% energy savings target hit by URBN Shanghai. (Source: Red-Luxury)