Soaring Demand for Green Products and Services in China, India and Singapore provides Untapped Opportunities for Businesses

Soaring Demand for Green Products and Services in China, India and Singapore provides Untapped Opportunities for Businesses

Consumer demand for Green products and services in China, India and Singapore appears to be outstripping supply, according to independent research from TÜV SÜD Asia Pacific, one of the world's leading providers of testing, inspection and certification services.

The study, the first to investigate, compare & contrast consumer and corporate attitudes to Green products, services, policies and certifications in Asia, revealed that businesses are significantly underestimating consumer interest1 and awareness in Green issues.

The research demonstrated 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 minimize their impact on the environment in place or are failing to clearly communicate they have one.

The research, named the TÜV SÜD Green Gauge 2010, was undertaken in China, India and Singapore. It included individual interviews with over 460 management-level employees in businesses that operate the home electronics, food and beverage, and clothing and footwear industries. A survey of more than 2,600 consumers, which act as their household's key decision maker in the purchase of products and services in these sectors, was also conducted across the countries. 

Opportunity set to increase

Whilst consumer (96 percent on average) and business (89 percent on average) interest in green products /  services  is already high, 95 percent and 85 percent respectively believe Green issues will become even more prominent in the next five years. Amongst consumers, this figure breaks down per market as 96 percent in India and 94 percent in both Singapore and China. The breakdown for businesses was 82 percent in India, 86 percent in Singapore and 88 percent in China.

Mr Ishan Palit, CEO of TÜV SÜD Asia Pacific, said, "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."

Independent Green Certifications influence purchasing behaviour

In addition to assessing awareness and interest levels in Green issues, the TÜV SÜD Green Gauge 2010 also investigated how Green benefits and credentials affect purchasing behaviour. 96 percent of consumers in India stated that independent Green Certifications are of importance when deciding which product to buy, followed by 94 percent in China and 90 percent in Singapore. In India and China, consumers even declared that such standards play a greater role in their purchasing decisions than price. The primary reason for these beliefs in all countries was that Green certifications provide independent documentation, and therefore add credibility to the product. Surprisingly, the results also demonstrated that consumers are more aware of independent Green Certifications than businesses. Around half (49 percent) of consumers on average recognise such standards compared to just a third (35 percent) of corporate organisations.

Mr Palit added: "Consumers in China, India and Singapore have become increasingly sophisticated when it comes to Green issues. They understand the importance of action, and therefore look to purchase green products and services that are independently certified to green standards. Businesses, on the other hand, appear to be slow on the uptake. This is surprising; especially considering the demand is there."

Differing opinions on who should take the lead on green issues

When asked who should take the lead on solving Green issues, businesses firmly pointed the finger at Governments, whilst consumers took responsibility themselves. 43 percent of corporate organisations stated that Governments should drive sustainability and CSR initiatives. The vast majority also claimed that Industry and Government regulations are the main reason why they would implement CSR and sustainability policies and guidelines.  

Mr Palit concluded: "The results of this research clearly demonstrate that we have reached an era where Green products and services not only help tackle pertinent environment issues but make genuine business sense. Over the next five years, this is only going to intensify. With a comparably limited number of Green products and services currently on the market, firms that act quickly to capitalise on this growing trend will reap significant rewards."

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