TUV SUD: Soaring Demand for Green Products and Services in China Provides Untapped Opportunities for Businesses

SHANGHAI, Jan. 27, 2010 /PRNewswire-Asia/ --

Consumer demand for Green products and services in China appears to be outstripping supply, according to independent research from TUV SUD, 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 interest and awareness in Green issues.

The research demonstrated that the vast majority of the surveyed urban Chinese consumers (94 percent) are prepared to pay a considerable premium (45 percent on average) to get their hands on products and services that are clearly certified as green. Furthermore, 83 percent of respondents claim to purchase such items, making China the country with the highest interest and demand for Green products when compared to India and Singapore.Businesses, on the other hand, were revealed to expect just 60 percent of urban consumers to be willing to pay more for Green credentials and that those who are willing, would only pay a premium of 13 percent.

Even though 59 percent of businesses in China in the surveyed industries (home electronics, food and beverage, and clothing and footwear) are already producing or trading Green products, the study showed that they are still misjudging the intensity of urban consumer demand. As a result, the majority (61 percent on average) of Chinese companies either do not have a policy or guideline in place to minimize their impact on the environment or are failing to clearly communicate that they have one.

The research, named the TUV SUD 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 urban 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. 

In addition to assessing demand, awareness and interest levels in Green products, services and policies, the TUV SUD Green Gauge 2010 also investigated reasons behind the rise of urban consumer demand, how Green credentials are affecting purchasing behaviour, and the barriers to entry into the Green sector for businesses.

Opportunity set to increase

Whilst urban consumer (99 percent) and business (94 percent) interest in green products / services in China is already high, 94 percent and 88 percent respectively believe Green issues will become even more prominent in the next five years.

Mr Dirk von Wahl, CEO of TUV SUD China, said, "The TUV SUD Green Gauge 2010 shows that there is generally a high level of interest in Green issues by both businesses and urban consumers. However, businesses appear to not be aware of the intensity of interest among urban consumers and how this translates into demand for Green products and the willingness to pay premiums of almost 50 percent for them. This shows a large and potentially lucrative opportunity in the market."

Independent Green Certifications are important to consumers

94 percent of urban consumers in China stated that independent Green Certifications are important when deciding which product to buy. Chinese urban consumers even declared that such standards play a greater role in their purchasing decisions than price. The primary reason for these beliefs, which were consistent among all three countries, was that Green Certifications provide independent documentation, and therefore add credibility to the product. Surprisingly, the results also demonstrated that urban consumers are more aware of independent Green Certifications than businesses in China. More than half (54 percent) of urban consumers on average recognise such standards, compared to just a third (34 percent) of corporate organisations.

Mr Dirk von Wahl added: "Urban consumers in China have become increasingly sophisticated when it comes to Green issues. They understand the importance of action, and therefore only 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."

Businesses believe Government should take the lead on Green issues

When asked who should take the lead on solving Green issues, 75 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 Dirk von Wahl 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."

Sample: Interest in “Green issues”

About the TUV SUD Green Gauge 2010

The TUV SUD Green Gauge 2010 is based on results from a research commissioned by TUV SUD. The study was conducted by independent market research agency Kadence International.

The study gives valuable insights into trends in the uptake of Green products/services in Asia. The study also aims to establish whether consumers or corporate organisations 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 & beverage and clothing & footwear. 

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

The survey was conducted between November and December 2010.

About TUV SUD

Established in Germany 140 years ago, TUV SUD is one of the world's leading technical services providers offering knowledge services, inspections, testing, expert opinions, certification and training. Approximately 15,000 employees at over 600 locations worldwide provide technology, system and know-how optimization.

TUV SUD has started business in China for around 20 years. So far, TUV SUD has partnered with over 10,000 local manufacturers.

www.tuv-sud.cn

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