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We will remember 2021 as a year of business innovation and resilience. Pandemic lockdowns, supply chain disruptions, and consumer sentiment forced businesses to adapt quickly. Companies that have successfully responded to such tough situations have been rewarded by the public. The 2021 Edelman Trust Barometer global poll shows that business as an institution was not only more trusted compared to government and media but was also rated as being more ethical and competent by the public.

This increase in consumer trust has also increased their expectations from the industry. Consumers want business leaders to help achieve a safe, healthy, and cleaner world. Growing consumer awareness about climate change and citizens’ demand for organizations to respond to social and environmental issues has become a strategic issue for brands.

Public opinion polls show that public concern about climate change has increased in the post COVID-19 world. The Ipsos’ Global Trends Study 2021 found that across twenty-five markets, most of the public say that we are heading for environmental disaster unless we change our habits. Two-thirds (63%) say companies should prioritize climate change and environment over payment of fair taxes. In China, Brazil, and Singapore, three in four individuals say that companies doing as much as they can to save the environment are personally important to them. A large majority say that they tend to buy brands that reflect their personal values (70%).

 

The New Age consumer in China

The new consumer also does not fit into neat stereotypes. According to a McKinsey report, “young free spenders” or digital natives, who reside predominantly in second-, third- and fourth-tier cities, drive growth in consumer spending in China. About half of this group between the age of 20-30 are sustainability-minded consumers, according to a survey on WeChat.

Similarly, consumers in smaller cities in China have stronger preference for EVs (electric vehicles) and younger consumers in these smaller cities are the group that is most open to EV adoption. The EV preference is strongly driven by not only functional and environmental value, but more importantly, because they see greater psychosocial advantages such as a sign of success and modernization.

More active and motivated consumers will demand more transparency about how products are sourced and packaged. And they are willing to pay a premium for such information and product. While previous studies found an attitude-behaviour gap, more recent studies show that Chinese public attitudes towards sustainability affects their purchase intentions.

 

Are Consumers ‘Walking the Talk’ on Sustainability?

The demand for sustainable goods has substantially increased around the world. Harvard Business Review reported that products carrying an on-pack sustainability claim grew 5.6 times faster than those that were not. In more than 90% of the consumer-packed goods, sustainability-marketed products grew faster than conventional counterparts.

Chinese consumers are also leading the world in demanding businesses to talk and act on sustainability. In a global survey conducted by the PWC in 2021, over 7 in 10 Chinese respondents say they want to buy from companies that are conscious and supportive of protecting the environment, choose products with a transparent supply chain, and buy items with eco-friendly packaging. Across the world, more than 5 in 10 support such measures.

Lack of sustainable options, inconsistent quality of sustainable products, and price are three major barriers for Chinese consumers to shop more sustainably.

Consumers are also punishing companies that do not communicate and deliver on sustainability goals. In a 2019 online survey, 50% of respondents worldwide said they switched products or services because a company violated their values. The number one reason cited for the switch was to support products or services that ‘protect the environment.

 

How to Engage Sustainable Consumers?

A major barrier for consumers is trust and transparency in how green is the product and what are its key health and lifestyle benefits. OrgHive provides transparency and trust in the organic and natural market in China thanks to blockchain technology

The new consumer is vocal on social media. Since 2016, the number of posts related to nature loss and biodiversity has increased by 65%. The popularity of Google searches relating to sustainable goods has increased by 71% globally, according to Economist Intelligence Unit.

People are proactively looking for brand’s communication on environmental and social issues. In addition, the rise in number of transparency-based NGOs are tracking global and local brands on their action on climate change.

Consumers not only are more likely to buy products that are labelled as sustainable, but their perceptions about a firm’s sustainability reputation, or to the degree consumers see a company as being green. This sustainability reputation affects actual choice, over and above the sustainability labels of the product. When faced with similar sustainable products, consumers prefer to buy products from a firm known for its sustainability communication.

Consumers want to know how their brand choices is changing their individual carbon footprint. While information about how the brand and the product helps society is important. Still, consumers are more tuned to information about how their lifestyle choices are helping them to live a greener and cleaner life.

 

The Future of Sustainability 

Consumers want to build back a better world. They strongly support policies that use COVID-19 economic recovery funds that also help deal with problems of climate change. People are looking for brands that give them a sense of fashion and a sense of social and political identity. This is the reason why several Chief Executive Officers have publicly communicated empathy and kindness to consumers and their employees.

Sustainability has moved from being a social and moral obligation to becoming a central strategy for business. Improved productivity and cost savings due to improved energy efficiency make a business case to adapt to sustainability standards. Increasing regulatory focus on business impacts and public activism towards environmental issues have also made brands respond to the call of the responsible consumer.

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