Executive summary
Green consumption has been sprouting and developing in the mainland market in recent years. According to a questionnaire survey conducted by the Hong Kong Trade Development Council (HKTDC) among 2,400 mainland consumers in June 2011, 86% of the respondents reckon that their environmental awareness and behaviour have increased markedly as compared with several years ago, and 75% of them have used green products over the past year. It is expected that the Chinese government will promote green lifestyles under the 12th Five-year Programme to encourage the shift to energy-saving and emission-reducing products through government subsidies. The fact that green products will bring actual benefits to consumers will encourage consumers to continue buying these products, and thus green products will become a new growth driver for the mainland consumer market.
The prices of green products are generally higher than those of traditional like products. Mainland consumers mainly buy products that will bring personal benefits. Among the different categories of green products, food/drinks (95%) and electronics / electrical appliances (90%) are most popular with the highest purchase ratios among the respondents, followed by clothing (57%) and personal care products (53%).
On average, respondents who have used green products started making such purchases 2.5 years ago, mainly out of the concern for personal health. It is often the arrival of babies in the family that triggers the conversion to green products. According to the survey findings, 68% of the respondents who have children aged 0-2 started buying green products for the sake of their children; and only 14% of the respondents who have children aged 14 and above made such purchases for the sake of their children.
Apart from the benefits of promoting good health and saving money, 66% of the respondents reckon buying green products is in fashion. They choose green consumption out of the “keeping up with the Joneses” mentality. But they will not spend time to deliberately seek out green products in shopping because “green consumption” has yet to become a major shopping consideration for them. However, the survey finds that overseas returnees who have lived abroad for a period of time have more mature consumption concept regarding green products. 44% of the overseas returnees will spend time to deliberately seek out green products in shopping because “green consumption” has become an important shopping consideration (58%) for them. These overseas returnees have become an alternate group of consumers.
Green products have not become the mainstream varieties on the mainland at the present stage and excessive prices (66%) and the difficulty of ascertaining the authenticity of green products (57%) are the main obstacles holding back consumers. According to the survey findings, the respondents have greater confidence in the environmental certifications issued in foreign countries (89%) and Hong Kong (71%), as compared to only 42% for local certifications of the mainland.
For the same kind of green products, if they are produced in foreign countries by foreign enterprises, the highest premium that respondents are willing to pay is 16%. If they are produced in Hong Kong by Hong Kong companies, respondents are willing to pay a premium of up to 11%. But if the products are produced on the mainland, then no matter the production facility is invested by foreign or Hong Kong companies, the respondents are only willing to pay a premium of 4% to 6%.
Among the different categories of green products, the respondents are willing to pay the highest premium for infant/children’s products, which is 19% on average. For products for which repeat purchase is common such as food/drinks, although the respondents are generally more sensitive about price, yet due to their concern for food safety, they are willing to pay a premium of 16% on average. For some eco-friendly electrical appliances that can help consumers save energy and money as well as green clothing that protects the skin from excessive contact with chemical substances, the respondents are willing to pay a premium of 16% on average. They are also willing to pay a premium of 15% for green personal care products and 13% for green household cleaning products that help reduce harm to the environment.
The survey also finds that mainland consumers are keen to try new green products. 24% of the respondents are receptive to new energy products such as solar chargers, solar panels, etc. 17% of the respondents want to try personal accessories made from recycled materials; 17% are interested to buy a hybrid car; 16% are interested to buy water-saving equipment; and 15% want to use harm- and poison-free building materials/paints.
The green market on the mainland is as yet a mid- to high-end market. To tap it, Hong Kong companies have to offer medium- to high-grade products with a professional image. Although mainland consumers have confidence in the certifications of foreign countries and Hong Kong, their knowledge and understanding of foreign and Hong Kong certifications are still limited. In the circumstances, Hong Kong companies should educate consumers on how to identify authentic green products through their certifications when they are promoting and publicising their own products. The survey findings also show that the major channels through which mainland consumers obtain environmental protection information are relatives and friends (57%), in-store promoters (56%) as well as newspapers/magazines and websites (54%). Hong Kong companies may consider making use of different media to publicise the benefits of green products to individuals and the environment, so as to encourage consumers to shop for more green products. Hong Kong companies may also consider sponsoring talks and activities organised by non-profit making organisations on environmental protection. 82% of the respondents indicate that they will buy more of the products of those enterprises / brands which are proven to be eco-friendly.
