Tag Archives: price

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)

Italians and sustainability in the retail business: the buzz is online!

Italians speak about sustainability online.This is the result of a recent survey led by Blogmeter from October 1st, 2010 to January 31st, 2011 recording approximately more than 9 thousand post about environmental sustainability related to the major retail chains. Social media proved to be the ideal and most followed communication tool  to promote eco- initiatives, facilitating the construction of  a real “green image” for the retail business sector.

Retailers mentioned by Italians on online conversations about sustainability

When it comes to environmental sustainability Coop and Ikea and are the most discussed with over 40% of the citations. This happened for example with the Sportello Ambiente initiative,  a collaboration between Ikea and Legambiente to offer advice to consumers about home energy efficiency, and with the Coop campaign to promote the consumption of tap water in place of the bottled one.

In general, web users are showing an increaside sensitivity to organic and low-
environmental impact products:  in the online communities dedicated to women, users positively report about the presence of automatic distributors to refill detergents inside the supermarket. Retailers brands are the most mentioned ones, most widely quoted and commented by users because always available on the shelf – like Esselunga Bio, Bio of Auchan, Coop Viviverde. Lidl, for example, is particularly discussed for its range of ecological detergents W5 (on 42 over 199 posts mentioning the retailer) considered to be of good quality and highly recommended among users.

The network also tells us that attention to a more responsible consumption is steadily increasing and influencing the purchase process in different ways: users are more sensitive to labels and the presence of the Ecolabel certification is considered increasingly important for those who are looking for products with a low environmental impact.

The research also showed that a balanced relationship between quality and price of organic and /or eco products is a key criterion in the buying process: very often consumers who are interested in green products do desist because selling prices are too high. (Source: GDO Week)