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Emerging Markets: The Role of Sustainability in Chinese and Indian Consumer Markets
Andrew [email protected]
• What is Sustainability
• What are the Consumers Concerned About
• What are the Behavioral Trends of the Consumers
• Summary
Agenda• What is Sustainability
• What are the Consumers Concerned About
• What are the Behavioral Trends of the Consumers
• Summary
Sustainability is:• Sustainability for businesses can be
defined along the ESG framework. • Environmental• Social • Governance (Corporate)• Sustainable products mitigate
ecological damage. • Sustainable businesses invest in
practices that: • reduce their carbon footprint and
harmful waste• reduce inhumane worker practices• increase gender equality among
workers
Examples of Sustainable Products
Food• Organic• Locally grownTechnology • Energy efficient
products• Product reduces energy
consumptionTransportation• Electric vehicles• Ride sharing• People powered
solutions
What is Sustainability
Agenda• What is Sustainability
• What are the Consumers Concerned About
• What are the Behavioral Trends of the Consumers
• Summary
Food Safety Air Pollution
Water PollutionCost of Food
Spread of Infectious DiseaseThe Economy
Climate Change / Global Warming
Fresh Water ShortagesCost of energy/ fuel
War /TerrorismPopulation Growth
Loss of Species / Habitat
50 60 70 80 90 100
AverageChina
Fresh Water ShortagesAir Pollution
Water PollutionFood Safety
Climate Change / Global Warming
Cost of energy/ fuelCost of Food
Population GrowthThe Economy
Spread of Infectious Disease
War /TerrorismLoss of Species / Habitat
50 60 70 80 90 100
AverageIndia
Consumer Concern About Sustainability Issues
• Chinese consumers are mostly concerned with issues that affect their health.
• The country’s recent history regarding food safety, air pollution and water pollution is likely the driving force behind the concern.
China
Source: National Geographic “Greendex Report” 2014
• Like the Chinese, Indian consumers are mostly concerned with issues that affect their health and sustenance.
• Consumers are also concerned with global warming and cost of energy.
India
Agenda• What is Sustainability
• What are the Consumers Concerned About
• What are the Behavioral Trends of the Consumers
• Summary
40%
42%
17%
China
46%
34%
19%
India
39%
23%
37%
Average
18%
36%20%
14%
8% 5%Average
36%
29%
14%
10%6%4%India
28%
32%
24%
8%6% 2%China
5
21
28
15
4
41
31
24
3
31
28
37
2
6
9
14
1
4
10
ChinaIndiaAverage
AgreeStrongly Agree Disagree Strongly Disagree
Consumer Behavior in China and India Energy-Saving Technology:Household Contains Energy-Saving Refrigerator/ Freezer
Yes No, intend to buy within a year No, do not intend to buy within a year
Several Times a WeekDaily Once a Week
Transportation:Choose to live close to usual destinations
Food Consumption:Frequency of Local Food Consumption
Source: National Geographic “Greendex Report” 2014
Greendex• Is an index created by National
Geographic to track trends in environmental sustainability.
• It allows comparison between country performace.
• India and China ranked 1st and 2nd respectively.
Consumer TrendsFood (1st)Goods (2nd)
Housing (1st) Transportation (1st)
• 44% frequently consume organic/natural foods
• Least consumer of imported foods, and most frequent consumers of self grown food
• Much less likely to consume beef or pork
• Most frequent consumers of fruits and vegetables
• 57% avoid environmentally unfriendly products
• Increasing proportion of Indians who try to buy things used or pre-owned
• however prefer disposable products rather than reusable
• however most likely consumers to feel that extra cost of friendly products is not worth
• 46% of households in India contain energy saving refrigerator or freezer
• decreasing using home heating, however increasing usage of air conditioners
• most likely to buy green electricity, and to use solar energy to heat water
• more likely to use cold water to wash clothes to save energy
• 60% walk or bicycle frequently to reach their destination
• least likely to own, rent or lease a vehicle
• the most frequent users of local public transport
• most likely to choose to live close their usual destination to reduce impact of their transport
Thank You
Summary• China and India represent two of the largest potential
consumer markets.• The rise in disposable income and GDP in these two
markets represents a significant increase in purchasing power. • Chinese and Indian consumers have expressed a strong
interest in sustainable consumption because of environmental and health concerns.• Chinese and Indian consumers are ranked amongst the
most sustainable groups for their consumption patterns in transportation, energy efficient products, and food consumption.
Consumer TrendsFood (1st)Goods (2nd)
Housing (1st) Transportation (1st)
• 44% frequently consume organic/natural foods
• Least consumer of imported foods, and most frequent consumers of self grown food
• Much less likely to consume beef or pork
• Most frequent consumers of fruits and vegetables
• 57% avoid environmentally unfriendly products
• Increasing proportion of Indians who try to buy things used or pre-owned
• however prefer disposable products rather than reusable
• however most likely consumers to feel that extra cost of friendly products is not worth
• 46% of households in India contain energy saving refrigerator or freezer
• decreasing using home heating, however increasing usage of air conditioners
• most likely to buy green electricity, and to use solar energy to heat water
• more likely to use cold water to wash clothes to save energy
• 60% walk or bicycle frequently to reach their destination
• least likely to own, rent or lease a vehicle
• the most frequent users of local public transport
• most likely to choose to live close their usual destination to reduce impact of their transport
Thank You
Consumer TrendsFood (1st)Goods (2nd)
Housing (1st) Transportation (1st)
• 44% frequently consume organic/natural foods
• Least consumer of imported foods, and most frequent consumers of self grown food
• Much less likely to consume beef or pork
• Most frequent consumers of fruits and vegetables
• 57% avoid environmentally unfriendly products
• Increasing proportion of Indians who try to buy things used or pre-owned
• however prefer disposable products rather than reusable
• however most likely consumers to feel that extra cost of friendly products is not worth
• 46% of households in India contain energy saving refrigerator or freezer
• decreasing using home heating, however increasing usage of air conditioners
• most likely to buy green electricity, and to use solar energy to heat water
• more likely to use cold water to wash clothes to save energy
• 60% walk or bicycle frequently to reach their destination
• least likely to own, rent or lease a vehicle
• the most frequent users of local public transport
• most likely to choose to live close their usual destination to reduce impact of their transport
Back Up Slides
Consumer Behavioral FocusConsumer Sustainabilty Behavioral Indicators
•Chinese consumers are concerned about environment and are most actively trying to change reduce environmental impact
•Indians are also concerned and actively trying to change the environment
•US consumers are hardly concerned about environment,but are somewhat trying to reduce their impact
•Although China has a high sustainability score, its consumers feel the least empowered to make a difference •Barriers to making an impact: •Less access to sustainable products•Less ability to be involved in political process
•Leading Companies Care about Reputation•A Change in Thinking Among Consumers is Underway•ESG (Environmental, social and governance) and Green Consumption Gaining Recognition in China•Evolving Role for NGO’s and the Media in China.•Same is the case in India
Consumer Trends
