Marketing Sustainability in China

April 16, 2018

 

The Chinese Government’s got a thing for green. But, do consumers care as much?

 

I remember a few years ago, lifestyles of health and sustainability (LOHAS) was all the rage. Consumers were turning away from ostentatious displays of wealth, trading in Prada handbags for organic clothing. This was really confined to those who could afford the still exorbitant prices. Unfortunately, LOHAS became just another short-lived fad. Perhaps it was just ahead of its time. A Reuters report from that period noted sustainable consumption to be on the "fringe" in China. Without a wide foundation of support, it’s easy to see why LOHAS quickly faded away.

 

But, what about today? Is there enough support for a LOHAS 2.0?

 

A 2017 report from the China Chain Store and Franchise Association shows 70% of Chinese consumers are now aware of sustainable consumption. That’s quite a change from only a few years ago. Of these consumers, 30% “…fully believed that personal consumption has a direct impact on the environment.” The main reason for adopting more sustainable behaviors, though, had nothing to do with the earth. More than 70% of respondents stated safety and health as their primary concerns. For this, as well as earth friendliness and quality, interviewees were willing to pay a 10% premium.

 

There are a couple key factors leading to these changes in consumer attitudes.

 

  • First, there are more green products available on the market. This allows for wider product marketing, distribution, and general knowledge among consumers.

  • Second, prices for green products are more reasonable than they were in the past. Mainland respondents to a Hong Kong Trade Development Council survey noted promotional campaigns and fierce competition between green and non-green products driving down prices.

  • Lastly, and possibly the most important factor, is ease of purchase. Green products are widely available both offline and online, with multiple purchase channels for consumers.

 

The Hong Kong report also noted key categories where consumers were willing to spend more on green.

 

 

All of this seems to point to a LOHAS 2.0 that focuses on lifestyles of health and safety. For multinational brands trying to crack China’s green code, there are a few things to keep in mind.

 

  • First, relate your messaging back to safety. In a country plagued by scandal, shoddy craftsmanship, and cut corners, show how your product is better.

  • Next, keep products price competitive. Now is not the time to get greedy. Let your prices reflect a product’s actual value, but not give the impression you’re trying to pillage a consumer’s wallet.

  • Finally, build the right online and offline presence. O2O is a big trend recently, but one only a few companies have successfully implemented. No place is this more apparent than in green consumption. Make sure positioning, messaging, and pricing line up between all your channels.

It’s clear green consumption is a rapidly evolving area of the Chinese market. With such public displays of support from the Government, one can only expect consumer understanding of the space to continue improving. This means an increase in attention towards, expectations of, and spending on products aligning with sustainable lifestyles.

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