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TÜV SÜD America

Quality Insider

Asian Consumers Look for Greener Products

Buyers willing to pay more for certified goods and services, survey finds

Published: Tuesday, January 18, 2011 - 16:37

(TÜV SÜD Asia Pacific: Singapore) -- 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 Pte. Ltd. in Singapore. TÜV SÜD is a global leader in testing, inspection, and certification services.

The study—the first to investigate, compare, and contrast consumer and corporate attitudes to green products, services, policies, and certifications in Asia—revealed that businesses are significantly underestimating consumer interest in and awareness of green issues (figure 1).

Figure 1: Strong interest in green issues. (From left: Singapore, India, China) 

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 (figure 2), 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 (figure 3), 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 (figure 4).

Figure 2: Green certifications justify premium pricing. (From left: Singapore, India, China) 

Figure 3: A minority of businesses say they either produce or trade “green” products

Figure 4: Majority of businesses do not have a policy or guidelines to minimize their impact on the environment in place or are failing to clearly communicate they have one. (From left: Singapore, India, China)

The research, named the “TÜV SÜD Green Gauge 2010,” was undertaken in China, India, and Singapore. It included individual interviews with more than 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 households’ key decision makers in the purchase of products and services in these sectors, was also conducted across the countries.

Opportunity set to increase

 Although consumer (96% on average) and business (89% on average) interest in green products and services are already high (95% and 85%, respectively), they believe green issues will become even more prominent during the next five years (figure 5). Among 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.

Figure 5: Green issues—a growing subject.(From left: Singapore, India, China)

“The TÜV SÜD Green Gauge 2010 shows that there is generally a high level of interest in green issues by both businesses and consumers,” says Ishan Palit CEO of TÜV SÜD Asia Pacific. “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 behavior

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 behavior. Consumers in India (96%) 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 (figure 6). 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 (figure 7). Around half (49%) of consumers on average recognize such standards compared to just a third (35%) of corporate organizations.

Figure 6: Green certifications play noteworthy role in purchasing decisions

Figure 7: Consumers are more aware of green certifications than businesses. (From left: Singapore, India, China)

“Consumers in China, India, and Singapore have become increasingly sophisticated when it comes to green issues,” adds Palit. “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 that the demand is there.”

Differing opinions on who should take the green lead

 When asked who should take the lead on solving green issues, businesses firmly pointed the finger at governments, while consumers took responsibility themselves. Corporate organizations (43%) stated that governments should drive sustainability and corporate social responsibility (CSR) initiatives (figure 8). The vast majority also claimed that industry and government regulations are the main reason why they would implement CSR and sustainability policies and guidelines (figure 9).

Figure 8: Confusion on who should take the lead in solving green issues

Figure 9: Industry and government regulations main reason for having CSR and sustainability policies and guidelines

“The results of this research clearly demonstrate that we have reached an era where green products and services not only help tackle pertinent environmental issues, but also make genuine business sense,” concludes Palit. “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 capitalize on this growing trend will reap significant rewards.”

About the TÜV SÜD Green Gauge 2010

 The TÜV SÜD Green Gauge 2010 is based on results from research commissioned by TÜV SÜD. The study was conducted by independent market research agency Kadence International.
The study gives valuable insights into trends in the uptake of green products and services in Asia. The study also aims to establish whether consumers or corporate organizations are more actively tackling environmental issues by investigating the levels of usage and awareness of green products or services in each.

The methodology used to carry out this research includes a web-based survey of more than 2,600 consumers and interviews with more than 460 businesses in China, India, and Singapore.
The consumer sample is nationally representative of consumers between 18–50 years of age and covers three segments of decision makers purchasing home electronics, food and beverages, and clothing and footwear.

The business sample includes management-level employees who are in a position to comment on green issues of their organization. The businesses interviewed are from home electronics, food and beverage, and clothing and footwear sectors.


About The Author

TÜV SÜD America’s picture

TÜV SÜD America

2016 marks the 150th anniversary of TÜV SÜD—a premium quality, safety, and sustainability solutions provider that specializes in testing, inspection, auditing, certification, training, and knowledge services. TÜV SÜD America, a subsidiary of TÜV SÜD AG, is a business-to-business engineering services firm providing international safety testing and certification services. Founded in 1987, TÜV SÜD America has more than a dozen locations throughout North America. Operating under the brand names of Product Service, Management Service, Industry Service, Automotive and PetroChem, TÜV SÜD America has partnered with thousands of companies throughout the NAFTA region, assuring product and management systems excellence, and acceptance in the global marketplace.