Consumers in China, India, Singapore willing to pay more: survey
Lynn Kan Business Times 12 Jan 11;
BUSINESSES in Singapore, China and India are grossly underestimating consumer interest in green products and services, according to a survey.
While over eight in 10 consumers are willing to pay a premium for green products and services, only 43 per cent of businesses think consumers want to pay extra, according to the results of a survey by certification service provider TUV SUD.
It polled over 2,600 consumers and 460 businesses in three product segments - food and beverages, home electronics and clothes and footwear. Chinese and Indian consumers were willing to pay up to 45 per cent and 24 per cent more for green products, respectively. In Singapore, the man on the street would only pay 11 per cent more.
Said Ishan Palit, CEO for TUV SUD Asia Pacific: 'Businesses appear not to be very aware of the intensity of interest among consumers and how this translates into demand for green products. The survey shows it makes economic sense for the green movement to be sustainable.'
The gap between businesses and consumers, adds TUV SUD PSB's chief executive Chong Weng Hoe, might stem from businesses not keeping up to date with consumer sentiment on the environment. 'Businesses may usually track environment-related regulation rather than the change in consumer behaviour, which could have changed dramatically in the last five years.'
Singapore is different in another respect in that businesses rather than consumers are ready for a higher premium for green-certified products, when it is the reverse in China and India.
'There are different environmental concerns in the three countries. Consumers here may be less environmentally conscious because of the more proactive role the government takes in addressing environmental issues,' says Mr Palit. 'Also, Singapore manufacturers probably do a lot of export, so these markets might emphasise on being green more than Singaporeans.'
With the realisation that market mechanisms of demand and supply prompts companies to adopt green certification, more companies might come on board on their own rather than being induced by government or industry regulation.
Mr Chong says: 'Government regulations must still be there as the push factor for businesses to adopt green certification. But the pull factor from the consumer side is getting much stronger.'
