Sustainability is becoming a significant concern among Asian consumers, especially in emerging markets. Selling sustainable consumer goods in Asia can be challenging for food and drink exporters though. Understanding consumer attitudes, market dynamics, and the challenges faced by brands, will help you better navigate this evolving landscape.
Table of Contents
What is Sustainability?
In 1987 the United Nations defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” This is normally built up over 3 fundamental pillars: social, economic and environmental. I’m not going to go into the UN’s sustainable development goals here as that would be way too complex for the scope of this blog post, but if that’s something you’d like to learn more about and use as a check list for developing your own sustainability policy, you can find more details here.
When huge conglomerates such as Unilever talk about their sustainability goals and achievements, it can feel a little awkward. How can a company who makes a large part of their profits by selling chemicals in plastic packaging be sustainable? The company certainly has lofty targets such as reaching net zero emissions, reducing the amount of plastics and reusing where possible and offering a living wage to their employees.
It’s practically compulsory these days for companies to have some kind of sustainability programme, however these are not the companies who I’m targeting with this post. Of course, it’s every company’s job to do their bit for the planet and strive to reduce their waste and emissions, however I’m aiming this post at those companies who have built an ecological or organic approach into their DNA from day one. That doesn’t mean I think the others are wasting their time, just that that would be too broad a scope for this article.
With sustainability, it’s like when you’re at a swimming pool. Companies stand on the edge of the pool and each tries to outdo the next with their assertions. But hardly anyone jumps.
Reinhard Schneider, head of the brand Frosch (Translated by me)
Understanding Consumer Attitudes
Approximately 87% of consumers in these regions express a desire to adopt more sustainable lifestyles, which is higher than the global average of 73%, according to a recent report commissioned by Alibaba. This growing interest is driven by increased environmental awareness and the younger generation’s inclination towards eco-friendly practices.
Growing Awareness and Interest
High Demand for Sustainability
Contrary to popular belief in Europe, consumers in emerging Asian markets are increasingly prioritising sustainability. Around 87% of these consumers want to practice more sustainable lifestyles, surpassing the global average. This trend is particularly strong among younger generations, such as Gen Z and Millennials, who are more inclined to make sustainable purchases and are willing to pay a premium for eco-friendly products.
Role of Younger consumers in selling sustainable consumer goods in Asia
Younger consumers are driving the demand for sustainable goods. They are more conscious of the environmental impact of their purchases and are actively seeking products that align with their values. This demographic is also more likely to recommend sustainable products to others, amplifying their influence.
Concerns and Scepticism
Greenwashing Issues
Despite the seemingly high demand for sustainable products, there is significant scepticism among consumers regarding the authenticity of brands’ sustainability claims. About 38% of consumers globally question the trustworthiness of these claims, with only 15% fully trusting them. This scepticism is a major barrier that brands need to address. Of course, every small improvement helps, but it’s important that brands don’t get caught up in singing their own praises for actions that are rapidly becoming an industry standard.
Price Sensitivity
Another challenge is the perception that sustainable products are too expensive. Globally, 45% of consumers cite cost as a barrier to purchasing sustainable goods. This price sensitivity is particularly pronounced in Asia, where many consumers find sustainable options prohibitively expensive. There are however consumers who are able and willing to pay more for premium products, including those with a sustainable price premium if the brand is able to convince the consumer that the premium is worth the value offered.
The Say-Do Gap
Whilst research keeps giving seemingly positive attitudes to sustainable products, the picture in terms of sales unfortunately looks rather different.
Continuing research has found that while many consumers in the region indicate they want to buy sustainable goods and are even willing to pay premium prices for them, few actually follow through. This is known as the “say-do gap.”
Bain & Co
This gap between stated intention and actual action is larger in developing markets than mature ones in the region, but exists everywhere. eg in Singapore 23% of consumers rank sustainability as a top-five key purchasing criterium, whilst only 14% of the packaged goods market falls into this definition. In China though the figures are 54% vs 12% market share and in Vietnam 41% vs 3% market share so you can see there’s a long way to go!
Strategies for Selling Sustainable Consumer Goods in Asia
Building Trust
Transparency
Transparency is crucial in building consumer trust. As a brand you need to clearly communicate what your sustainability credentials are & what you’re doing to improve, and the environmental impact of your products. Providing detailed information about sourcing, production processes, and certifications can help reassure consumers about the authenticity of sustainability claims, and avoid the accusation of greenwashing. Expect to be asked for copies of the certificates – things won’t be so taken on trust as perhaps in Europe and make sure you explain again and again (until you feel blue in the face) about your core messaging on this point.
If you are able to be carbon neutral in one factory, that is fantastic! However don’t use this as your main marketing message in a country on the other side of the world where logistics will have eaten up your carbon neutral claim. It’s really important not to be misleading on these topics as consumers will “get the ick” around your brand.
Authenticity
To avoid greenwashing, you have to ensure that your sustainability claims are genuine and backed by credible certifications or third-party validations. This authenticity helps build long-term trust and loyalty among consumers. In Europe many consumers are sceptical about whether claims around organic or ecological processes are just a scam, and with the many scandals that have occurred in Asia, this is even more so.
It could even be worth you considering additional certifications – check in the market you’re targeting whether a different certification would be more trustworthy in the eyes of your target clients.
For China, you would have to do an additional organic certification if you want to be able to use organic claims and logos on your products as there is no reciprocal agreements with other countries. This is partly because the Chinese don’t like the system used by most of the world, whereby a manufacturer is allowed to trust the certificates received from all the raw material suppliers. So for China, the organic inspectors go back through your whole supply chain and check everything…
Pricing and Accessibility
Affordability
Making sustainable products more accessible involves competitive pricing and value-driven promotions. Of course, I assume that you do everything you can anyway to use economies of scale to keep your costs down, but it’s important not to be TOOOO much more expensive than your less ecologically minded competitors.
So when I say competitive pricing, I’m talking relative to equivalent products: you should not be trying to underbid the cheapest local supplier out there.
Same with promotions. Don’t make it a race to the bottom as you’re not competing on price. I would recommend you avoid price-offs as far as possible and offer additional value if possible.
Educating Consumers
Obviously educating consumers about the long-term benefits of sustainable products can help justify higher upfront costs for purchases. Information campaigns that highlight the environmental and health benefits of sustainable goods can shift consumer perceptions over time and encourage more informed purchasing decisions.
It’s important to be realistic about this though: firstly it takes a long time to change the mindset in a particular market and secondly, for some parts of the population your products will be out of reach. Your realistic target market will be smaller than a cheap mass market alternative.
That doesn’t mean you should give up on it though. Asian consumers like and trust imported goods (generally) as the quality is perceived to be superior. That isn’t always true, but it’s a frequent assumption. Consumers are willing to pay more for better quality if they are convinced that the quality is actually better and they can afford it…
Health has been re-established at the front of mind for many consumers after the pandemic so any qualified education around how your sustainable brand can contribute to the health of consumers and their families will help support the growth of your brand.
Same goes for sustainability. If you can educate consumers about why your brand is better for themselves and their environment, they are more likely to invest a premium to purchase.
Packaging for Food and Drink Exporters
This is perhaps the single area where changing attitudes to sustainability can be seen most obviously. 10 years ago, packaging in Asia didn’t only have to protect the product during transit and transport relevant information, but also had to be elaborately beautiful. These days, excessive packaging is more likely to be frowned upon and many countries in the region are starting to pass legislation to cut down on plastic packaging, especially single use.
Chinese food delivery service ele.me offers the option for delivery without cutlery and encourages group buying within office buildings to cut down on logistics journeys (& cost). They are also moving to more bamboo and cardboard packaging.
Both the Hong Kong and Mainland China government have issued guidelines about the amount of packaging that should be used for moon cakes, as in the past this was often REALLY over the top. (Moon cakes are mainly gifted so having elaborate packaging was more important than the product itself…).
You may still have to abandon some of your more sustainable packaging for exporting to Asia though, simply to protect the product from the harsher logistics conditions and humid climate.
Engaging with Consumers
A significant portion of consumers in emerging markets (88%) are eager to learn how to make sustainable purchases online. You should leverage this interest by providing accessible and detailed information about your sustainability practices through various channels, including websites, social media, and product packaging.
The only way to really change the retail environment is through a collaboration of government, consumers and producers so it’s important to convince consumers of your authentic (sorry, I know that word gets overused) credentials and intentions.
It can be hard to explain to distributors (& consumers) why you don’t offer cheap plastic giveaways or why your merch is expensive compared to other brands, but as food and drinks exporters you have to stick to your principles and be congruent in all your dealings. This can be really hard to stick to in an environment where consumers want the “best product” but haven’t quite been educated enough on the full chain thinking that needs to go into that.
As with many areas in life, consumers who are “converted” to your products are likely to become the most ardent supporters and word of mouth marketing in Asia is worth its weight in gold.
Four out of five consumers who identified themselves as “environmentally and socially conscious” recommend sustainable products that they like. Moreover, more than half of these consumers are “super promoters” – meaning that they recommend the product to more than 10 people.
Bain & Co
You may find that engaging with local communities and participating in sustainability initiatives can reinforce a your commitment to environmental causes. It helps build a positive brand image and fosters a sense of community among consumers – you can either organise your own events or partner up with a local organisation whose values align with your own.
To sum it all up
The positive trajectory of consumer attitudes towards sustainability in Asia presents a significant opportunity for food and drink exporters but it’s not easy to get over the say-do gap to take advantage of it. By aligning your offerings with these values, you can thrive in this evolving market although it’ll take time to really establish your brand. The increasing demand for sustainable products, particularly among younger consumers, indicates a promising future for food and drink brands that prioritise sustainability.
Of course, it’s not easy and there are always difficult decisions to be made as to whether you can compromise in some way, but that is always the case when you seek growth. You have decisions to make about the carbon footprint of your logistics (can you even justify selling into specific markets either because of the “food miles” or the social record of the country?), how often you can travel to a market (balancing the need for relationship building with your sustainable travel targets) and whether there is enough demand for your premium products. All of your marketing needs to be aligned with your values and this will also restrict your choice of distributor as not everyone will be a great fit for you.
Is it still worth it to try and break through in Asia?
In the end that decision will be up to you. But given that Asia is the region where most of the global growth is taking place in the coming decade, I’d say you can’t afford not to. You just need to go into it with your eyes open and realistic expectations of the costs and timeframes involved.
Climate change is forcing especially Asia to look long and hard at their sustainability record and consumers are becoming ever more aware of their need to take action. Selling sustainable consumer goods in Asia will probably never be an easy option but for food and drink exporters of organic products then it can be a lucrative market for long term growth.
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Kathryn firmly believes that business is done between people, and therefore places her focus on building strong relationships that form a solid foundation for doing business.
When she's not travelling around the world, Kathryn enjoys playing clarinet in her town's wind orchestra or sharing her love of the outdoors with her Scout group.
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