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For Indian consumers, it is safety first, brand later

TUV SUD survey finds that about 93% of consumers willing to pay a premium for products superior in safety

M Saraswathy  |  Mumbai 

Indian consumers rank product safety higher than the brand of the product, according to a report by global testing, certification, inspection and training provider TÜV SÜD.

'Safety Gauge', the market research study by the firm said that safety falls in the middle of purchase criteria hierarchy. Between safety and brand, the survey showed that safety was more important to consumers.

"About 93% of consumers are willing to pay a premium (average 23.6%) for products that are superior in safety," the survey report said.

An average of 83% of consumer respondents in India have had experience with unsafe products, according to TÜV SÜD. Among those who had experienced unsafe products, allergic reaction (44%) and injuries due to faulty product design (41%), were the most cited product safety issues.

As a consequence, about 94% of consumers agree that third-party safety testing of products is important before they are sold in the market, as majority of consumers give adequate credibility to independent third party safety certifications.

Among the two genders and various age groups, the survey showed that young families, professionals and female consumers tend to be more informed and concerned about product safety.

The study said that for known brands, safety labels and certification reinforce consumers' brand preference. Labels and certification also help unfamiliar brands since the study said that about 83% of consumers tend to look for such information.

The role of safety certification extends to the online shopping experience too, with 87% of consumers saying that their purchase likelihood increases if a product sold online has a product safety certification.

Consumers are taking product safety very seriously. So much so that business respondents indicated an average recall incidence age of 2.7 per year, while the financial damages suffered are estimated at 12% of annual revenues. It showed that recall frequency in the food sector is much higher than average.

"are overestimating the cost required to achieve exemplary safety standards," said Ishan Palit, Chief Executive Officer, TÜV SÜD Product Service Division.

Consumers in India perceive the safety level of food products to be higher than those of consumer electronics and children’s products. Overall, respondents view products from the local market and developed Asian countries as having generally higher safety standards, thus the safest. On the other hand, consumers perceive other Asian developing nations as having the lowest product safety levels thus the least safe. For Indians, food and children's products were the safest from India, while they perceived consumer electronics from Japan to be the safest.

On one hand, while consumers are concerned about product safety, 84% of the respondents were satisfied with the However, both consumers and businesses alike, think that the government should lead in ensuring product safety in the India.

Among companies, more than half of the have supply chains fully complying to safety standards (58% firms) and with complete traceability (52% firms). Also, 66% of companies indicated awareness of product safety practices in their industries. Currently, according to the study, product safety costs account for an average of 14.5% of total production cost.

The companies said that lack of government regulations, cost of upgrading manufacturing capability and sourcing for new supplies with required product safety were some of the challenges in improving product safety. To achieve the best product safety standard, companies estimate an increase of 21.8% in production costs.

This survey was conducted between June and July 2012 among 5,268 customers and 520 businesses across five countries. A total of 1,063 customers and 116 businesses were surveyed in India.

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First Published: Fri, March 08 2013. 10:36 IST
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