x Abu Dhabi, UAEFriday 28 July 2017

Chinese need companies to show them how to buy Green

Encouraging many of China's 1.3 billion people to consider the environment as they spend is no easy task.

A China has more citizens than any other country, so enlisting them to the Green cause would have an enormous impact.

But encouraging many of the country's 1.3 billion people to consider the environment as they spend is no easy task, according to a recent report by Ogilvy Earth, the "sustainability practice" of the advertising firm Ogilvy and Mather.

"Consumers [in China] feel they are entitled to consume more. 'Why should we cut down on luxuries when the more developed parts of the world have already consumed more?'" says Kunal Sinha, Ogilvy and Mather's chief knowledge officer for China.

"People are looking to enter the middle class and upper middle class. They want their lives to be more convenient. For the majority of people, convenience drives what they by. Only 18 per cent said they would cut down their consuming.

"Chinese society has only recently emerged from deprivation and people feel they have a right to consume."

People in the dragon economy are being given free rein to indulge their enthusiasm for spending. Despite concerns over high inflation, most have growing disposable income, official figures show.

The official statistics bureau released figures in January that show disposable incomes grew 11.3 per cent last year to US$2,900 (Dh10,651) among urban residents. That was an increase of 7.8 per cent, even after inflation is taken into account.

Disposable incomes grew even faster among the rural Chinese - up 14.9 per cent last year from 2009 to $898, or a 10.9 per cent rise after inflation.

So Mr Sinha says the aim in China should be to encourage people to "consume more responsibly, rather than consume less".

The report says a key challenge for the country is to turn sustainability into a normal way of thinking, rather than the practice of a minority that likes the "eco-chic" associations.

The report, titled Get Going with Green: Closing the Sustainability Gap and based on research carried out between July and October last year in Shanghai, Tianjin and Wuxi, identified various groups in Chinese society.

Some individuals were branded "misguided materialists" because of their view that they should be able to reach western levels of consumption before worrying about sustainability.

Despite the hurdles involved in encouraging these types of consumers to become more eco-friendly, there is a growing awareness of the importance of going green, and this offers opportunities to companies, Ogilvy says.

If many companies made more effort to promote their green credentials it would allow people to buy their products with less guilt, it says.

Of those Chinese citizens surveyed in the report, 69 per cent said that if environmentally friendly products were available at the same price as alternatives, they would choose the green option.

"It's not just innovating but identifying something about their product that reduces its impact is one way to engage consumers," Mr Sinha said.

For an airconditioning company, this could involve describing a button that increases the temperature a few degrees as a "green switch" that reduces energy use.

Another way of encouraging a more eco-friendly approach among companies is to promote energy management systems that reduce power use in computer systems, allowing them to save money while increasing their eco-credentials.

"It's innovations like this that we should be championing," Mr Sinha says.

business@thenational.ae