 "Sustainable Development")
Indian consumers are willing to pay an over 20 per cent premium for ‘sustainable products’, the highest figure across 11 countries as against the average of 12 per cent, according to a Bain & Company survey.
But there is a big rider to this finding — sustainable products in India and other APAC countries are sold at an average premium of over 60 per cent, so there is a gap of 40 percentage points. In contrast, consumers in the US are willing to pay only an 11 per cent premium for sustainable products. But the average premium on sustainable products there is 28 per cent, a gap of 17 per cent.
Bain’s findings could be immensely useful for FMCG, consumer durables and electronics companies as well as other consumer-facing organisations to understand how changing consumer attitudes influence buying behaviour and how much extra people are prepared to pay for sustainable products.
Bain Global Consumer Lab surveyed over 23,000 consumers in 11 countries for The Visionary CEO’s Guide to Sustainability. The survey found that 85 per cent of Indian consumers are ‘very or extremely’ concerned about the environment.
This is the highest of any of the 11 countries and much higher than the global average of 64 per cent. In the US, the figures is 53 per cent, in Japan it is 31 per cent and in China, 73 per cent. However, Bain has a word of caution, suggesting that the high level of concern could have been triggered by the recent spike in pollution levels in several Indian cities and the incidence of flash floods earlier this year.
It points out that Indian consumers live or shop in a sustainable manner in the hope of direct benefits such as savings or better health as opposed to environmental concerns intrinsically. On the response to the question about their willingness to pay an incremental premium for sustainable products, India came out on top of the list, with the UK a mere 8 per cent, Japan 6 per cent and China 15 per cent. However, Bain points to a possible gap between intention and action that could be the result of limited product information and availability.
“This provides companies with an opportunity to take the lead by educating consumers and innovating to offer sustainable products at attractive prices,” says Karan Singh, partner and head of the Asia Pacific Sustainability Practice at Bain.
In response to the question about their willingness to pay an incremental premium for sustainable products, India came out on top of the list, with the UK at 8 per cent, Japan 6 per cent and China 15 per cent.
Consumers in developing and emerging countries seem to be more concerned than those in developed countries. For instance, 55 per cent of consumers in Europe and the US expressed concern about sustainability as compared with an average of 79 per cent in India, China and Indonesia.
Also, the general perception that younger people are much more concerned about environmental sustainability came into question with the survey showing that globally 72 per cent of Gen Z consumers expressed concern but boomers were only slightly behind at 69 per cent.
