Corporations not cashing in on Chinese consumers' desire for sustainability
18 April, 2011
OgilvyEarth study uncovers obstacles to widespread adoption of sustainable behaviors and suggests ways to overcome themChina research also reveals wide Sustainability Gap between people’s claimed and actual behavior BEIJING
— In response to myriad environmental challenges and a seemingly endless need for oil and energy, the Chinese government announced a US$221 billion green stimulus package in 2009 – the largest in the world. While the government commitment is well known, it comes with a critical and largely hidden downside: Chinese citizens generally view solving environmental problems as the role of government, and to some extent corporations, rather than a personal responsibility. Sustainability practices are seen as too costly, too inconvenient and therefore unrealistic and impractical for the lives of ‘normal’ people.
Furthermore, while more than 25% of Chinese consumers say corporations have an obligation to solve the problem, only 15% say corporations are taking action, demonstrating an opportunity for businesses in China to stake an early claim to this space.
All of this underlines the need for corporations and governments to do much more to educate Chinese consumers about their role in environmental protection and motivate them to adopt sustainable behaviors such as using public transport or buying green products.
These are some of the key findings of “Get Going with Green: Closing the Sustainability Gap,” a new study by OgilvyEarth, Ogilvy & Mather’s sustainability practice. The study focused on understanding the difference between what people say they are doing around sustainability and what they are actually doing, and reveals the reasons why they hold back. It also outlines 10 actionable future pathways that corporations, governments and communities can take to coax Chinese consumers to lead more sustainable lives - an important yet overlooked - component of solving China’s environmental troubles.
Over a four month period from July-October 2010, a team of strategists and ethnographers from OgilvyEarth, along with researchers from Chinese consumer insights and design firm enovate, studied 24 families in Shanghai, Tianjin and Wuxi. The team spent up to two days with each family - in their homes, examining their perceptions of environmental sustainability, observing daily routines and recording consumption and disposal behavior. This was followed by a nationwide quantitative study amongst 1300 respondents to both understand and measure the sustainability opportunity in China.
“When a question about adoption of green behavior is put to consumers in China, they instinctively claim to be green because they already have the basic knowledge they need to change their behaviors – and it is the politically correct thing to say. But the reality is, while they may be concerned, they often feel powerless or do not have the means to adopt sustainable behavior,” said Kunal Sinha, Chief Knowledge Officer and team leader of OgilvyEarth at Ogilvy & Mather Greater China.
“So there is a wide gap in China between people’s claimed and actual sustainable behavior – what we are calling the Sustainability Gap. This is important because if companies base their strategies and marketing decisions on typical research data on consumers’ claimed behaviors, they would far underestimate the need for education and engagement, as well as the potential market for products and services that proclaim their green credentials,” said Sinha.
“Consumer brands have not only an opportunity to improve reputation, but also to see real business returns through engaging consumers,” commented Shenan Chuang, CEO of Ogilvy & Mather Greater China. “As a result of this research, we now have deeper insights into how we can effectively engage with various demographic groups in China around environmental issues, and create new customers and brand advocates along the way.”
Notably, the study identifies several obstacles to adopting sustainable behaviors:
• Less than 25% of all consumers surveyed believe they have the power to solve environmental problems. Faced with seemingly insurmountable challenges, citizens turn to governments, and even large corporations, who they believe have the power and agency to effect change.
• Consumers in China are constantly being encouraged to consume more: only 18.6% of respondents said they would limit consumption, i.e. buy less.
• A vast majority of the Chinese population is only just beginning to enjoy a middle-class lifestyle for the first time. They are buying air conditioners and cars because they think they are entitled to these conveniences.
• 55% of respondents said convenience drives many of their purchase decisions. But going green would be inconvenient: shortage of money and time were often cited as reasons for not being ‘greener’.
• 53% of respondents said the green options in the marketplace are too expensive.
• There is a trust deficit: Faced with an overload of claims and certifications from different sources, Chinese consumers do not trust the labels on products or packaging.
• People who are at the forefront of the green movement are seen as idealists, for whom environmentalism is a cause they are passionate about. This sometimes implies taking a confrontational approach in order to change things. Alternatively, they are seen as the eco-chic, for whom green is a social badge. This creates a distance which suggests that sustainability is not for everyone.
So, what might be changed in the way the sustainability opportunity is presented? And how can it be made more relevant to people in China?
The insights in the report clearly point out that there needs to be an appeal for consumer engagement rather than confrontation, and practicality is more convincing than idealism.
There is an unmistakable opportunity:
• Chinese consumers have a fairly accurate understanding of the basic concepts underlying environmentalism – low carbon, conservation, and natural, resulting from the official discourse and early school and college education.
• 90.7% of respondents think that the sustainability movement is on the upswing.
• 80% would like recognition from their peers for their positive green behaviors.
• 78% of respondents said they would rather be given guidelines on how to live a sustainable life and do it themselves rather than have a green lifestyle be legislated through government policy.
• 69% said that if environmentally friendly products were available at the same price point, they were more likely to buy them.
71% are even happy to pay up to 10% more.
• 65% said that if more people in their community were active in being green, they would be too.
“Get Going with Green” makes the point that it is unrealistic to expect every consumer in China to engage with sustainability in similar ways. By means of ethnographic research, it was possible to classify respondents by their belief systems: Flexible Progressives, Ambitious Futurists, Active Individualists, Ghetto Rebels, Misguided Materialists, Passive Skeptics and Prestige Protectors.
This understanding – which is fundamental – can focus appeals and outreach, and make product design and consumer engagement programs more effective and meaningful. 10 Future Pathways for Behavior Change
Outlined in the report are 10 action items that provide a blueprint for any corporation, government or non-profit that aims to engage Chinese consumers in sustainability practices:
1. Mainstream, not model
: Encourage the mainstream green behaviors already in practice by Chinese citizens, including but not limited to bicycling, sleeping on straw mats in summer, and carrying one’s own water flask. By rewarding these behaviors, it encourages those who think sustainability is only for the wealthy or altruistic.
2. Products, not just policy
: Highlight existing products and services that are sustainable, as well as manufacturing and / or transportation innovations that result in less environmental impact. By informing consumers, you make them aware of green choices.
3. Every day, not just Earth Day
: Focus on being green every day, not just Earth Day or Earth Hour; this is critical to overcoming the challenge of tokenism.
4. Personal, not planet
: Start conversations. If the world is to change for the better, it will be as a result of decisions that are made by many individuals at a personal level. Having a child is a critical juncture in adopting sustainable behaviors for nearly all Chinese families; and with over 16 million births per year1
, that’s 16 million opportunities to start a conversation around caring and sustainability!
5. Incentive, not invective
: Build incentives for both individual and community adoption to encourage greener practices and purchasing decisions.
6. Choice, not constraint
: Offer consumers a choice. A brand’s green credentials can be a tie-breaker if the price is comparable; so it is important to offer the choice at the right time and place.
7. Dialogue, not decree
: Focus on dialogue. When engagement is based on compliance, people follow the rules and forget about it. When we want to continue the conversation about greener practices, we need to engage rather than command.
8. Conscious, not conspicuous
: Create consciousness about a collective Chinese good. Encourage families to ask themselves if they really need stuff; can it be passed on?
9. Collaborate, not confront
: Collaborate with others. Partnerships can result in positive change. Currently, the green movement is plagued with more confrontation than consensus; but collaboration will help realize the potential of China’s green technology market, estimated at USD 1 trillion per year .
10. Pluralize, not polarize
: Green practices divide people; the polluters against the victims; the eco-warriors and eco-chics versus the materialists. Make the case that environmental sustainability affects everyone because polarization solves nothing.
The “Get Going with Green” study included global comparisons between China and the United States, revealing that China has a more pronounced base of motivated green consumers who are hampered by either broad access to sustainable products or unaffordable prices. To read more about the American green gap or view comparisons between the U.S. and China, visit http://www.ogilvyearth.com/thoughtleadership
. Additional Resource
View a short video introducing the “Get Going with Green” report on YouTube or Youku. For photos or more information, please contact:
Ogilvy & Mather Group/China