Saturday, April 25, 2015

Do Chinese consumers have an environmental conscience?

It is evident that Chinese consumers like everywhere else in the world reflect a consumption pattern that is governed by their beliefs, values and ideals. In a research conducted by GfK in 23 countries, 72 % of the Chinese consumers claim that they only buy those products which match their values, beliefs and ideals.  In fact, the ardor of this expression is one of the highest in the world and the Chinese consumers seem to surpass the consumers in most developed countries in the intensity of their expressed emotion. 

That concern for the environment is among these guiding values is clear from the fact that Chinese consumers in most research studies, as in this one, avidly proclaim a strong environmental conscience and also demand responsible behavior from companies. 73 % of them (7th highest among the 24 countries studied) say that they are plagued by guilt when they indulge in an environmentally unfriendly manner. Their demand from brands and companies is even more exacting - 80 % of them feel that brands and companies have to be environmentally responsible. Here again the Chinese consumers are ahead of most developed countries in their standards.

The key question, of course, is will the Chinese consumers pay a premium for an environmentally friendly product? On this, the results in the market so far have been disappointing and there is no evidence of consumers paying more for an environmentally friendly product - as we see them paying for a safe product. Chinese mothers are buying infant milk formula and other baby products from all over the world at the highest prices. However, they don't seem to reflect a similar enthusiasm for products which are less of a strain on the environment. Tesla, the premium fully electric car, which has become an environmental badge in the U.S. seems to have had limited traction on the Chinese roads so far. Even in terms of common environmentally friendly practices such as shunning plastic shopping bags or buying products with reusable or light packaging the Chinese consumers are not really holding a beacon to the rest of the world. 

What do marketers and policy makers need to bridge this gap between espoused values and actual behavior? The key to achieving this is to link the desired positive behavior to a clear consumer benefit. Consumers seldom pay to assuage their conscience, but invariably do when they see a clear and meaningful benefit. Less pollution and safer environment are clear candidate benefits that can be dangled in front of the consumers.  Benefits don't just need to be functional or tangible - emotional benefits could also hold a powerful sway.  The related emotional pay off in this case could be potent - particularly if it relates to the long term protection and health of their children. Chinese consumers will pay if they feel that the premium that they pay today will create a better and safer world for their children tomorrow. The key to a more desirable behavior and premium for environmentally friendly products lies in converting the guilty conscience into a powerful emotional benefit that the Chinese consumers can identify with.  

Written by Ashok Sethi