Consumers in Asia Willing to Pay More for Green Products
Businesses in the region are underestimating customer awareness and demand for green products, according to a survey from testing, inspection and certification provider TÜV SÜD.
TÜV SÜD said the study was conducted to compare consumer and corporate attitudes to green products, services, policies and certifications in Singapore, China and India.
The research, named the TÜV SÜD Green Gauge 2010, found out that the vast majority of consumers (84 percent) are prepared to pay a considerable premium (27 percent on average) to get their hands on products and services that are clearly certified as green, and 74 percent claim to purchase such items.
In contrast, the study showed that businesses expect less than half (43 percent) of consumers to be willing to pay more for green credentials and that those who are willing, would only pay a premium of 14 percent.
Furthermore, just 43 percent of businesses in the surveyed industries (home electronics, food and beverage, and clothing and footwear) produce or trade green products in China, India and Singapore and the vast majority (74 percent) either do not have a policy or guideline to minimise their impact on the environment in place or are failing to clearly communicate they have one.
"The TÜV SÜD Green Gauge 2010 shows that there is generally a high level of interest in green issues by both businesses and consumers. However, businesses appear to not be aware of the intensity of interest among consumers and how this translates into demand for green products and the willingness to pay premiums of almost 30 percent for them. This shows a large and potentially lucrative opportunity in the market," said Ishan Palit, CEO of TÜV SÜD Asia Pacific.
However, the surveyed businesses feel governments should lead the way in driving green initiatives, with 43 percent stating government regulations would push sustainability and corporate social responsibility initiatives.
Indeed, government-driven energy efficiency ratings in products have made the electronics industry more "green" than the other two verticals. For example in Singapore, 59 percent of the respondents in the home electronics bracket produce or trade green products, compared to 22 percent in food and beverage, as well as 30 percent in clothes and footwear.