The number of consumers who are willing to pay more for sustainable products and services continue to rise, according to Nielsen's latest Global Corporate Sustainability Report. Southeast Asians are the most inclined globally to buy socially responsible brands with eight in 10 consumers willing to pay extra for products and services that come from companies who are committed towards creating a positive social and environmental impact.
Vietnamese consumers (86%) tops the list as the most socially-conscious when it comes to forking out more to purchase products and services from organizations who are socially responsible followed by Filipinos (83%), Thais (79%), Indonesians (78%), Malaysians (69%) and Singaporeans (55%). The global average is 66%.
"Nowadays, you will be hard-pressed to find consumers who do not show concern about environment and societal issues. In small and big ways, consumers are trying to be responsible citizens of the world and they expect the same from corporations," says Connie Cheng, Head of Shopper Insights for Nielsen in Southeast Asia, North Asia and Paicifc. "Committing to sustainability might just pay off for consumer brands."
According to the report, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown over 4% globally in the past year, while those without grew less than 1%.
"Social responsibility is now an imperative for companies," says Cheng. "integrating sustainability into their business models and objectives helps society and at the same time, raises goodwill towards their brands. Companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners and importantly, consumers."
Products and services which are value for money and the products' quality are the top purchasing influencers among Southeast Asians. over three in give consumers in Thailand (78%), Malaysia (74%) and Singapore (60%) ranked products which are value for money as their top influence on purchasing decision while about three quarters of consumers in Philippines (82%), Vietnam (79%) and Indonesia (73%) would sway towards products of high quality when deciding which products to buy.
"Finding opportunities to bridge the two is a powerful and impactful way to connect with consumers," advises Cheng.
Equally important among consumers in Malaysia is brand trust. Over two thirds of Malaysian consumers have said that they have purchased products which are made by a brand or company that they trust (65%) and that the purchased products are known for its high standards of safety (64%).
More than two thirds of Malaysians are also more comfortable purchasing products known for its health and wellness beneftis (64%) as well as products which is made from fresh, natural or organic ingredients (60%).
"Consumer goods' brands that have already built a high level of trust with consumers would do well by evaluating where best to introduce sustainable products into the market to drive growth," says Cheng. "Bigger global-consumer goods' brands that overlook sustainability increase reputational and business risk. They are vulnerable to competitors of all sizes who will seize the opportunity to build trust with the predominantly young, socially-conscious consumers looking for products that align with their values."
When it comes to sales intent, commitment to the environment has the power to sway product purchase for 57% of consuemrs surveyed in Southeast Asia. nearly half of Malaysian consumers support products whose companies are known for being environmentally friendly (47%) and their products packaging are environmentally friendly (43%), above global average of 45% and 41%, respectively.
The report also revealed over two in five Malaysians consumers' purchasing decision are also influenced by companies who are committed to either social values (43%) or the community they live in (46%). Retail data backs up the importance of these influences. In 2014, 65% of total sales of consumer goods measured globally were generated by brands whose marketing conveyed commitment to social and/or environmental value.
"We are seeing a change in the heirarchy among drivers of consumer loyalty and brand performance," observes Cheng. "Commitment to social and environmental responsibility is surpassing some of the more traditional influences for many consumers. Consumer-goods' brands that fail to consider this run the risk of falling behind."
More than one third of Malaysian consumers highlight that television advertisements highlighting a company's commitment to positive social or environmental impact (35%) are influential in their path to purchase while 30% of the respondents would try the products after seeing an ad on television."
"Brands that actively reinforce sustainability commitment must amplify and socialize their message using multiple sources and distribution channels such as third-party validation (news coverage), annual reports, employee volunteerism, advertising or reporting actual work in the community on a website," says Cheng. "While marketing good deeds is encouraged and expected by consumers, authenticity and credibility are essential. Care must be taken that the emphasis is placed on demonstrating good deeds versus self-serving promotion."
Insights contained in this article are based on results from the Nielsen Global Corporate Sustainability survey.
The findings from the retail sales information included in this report are collected from stores using electronic point-of-sale technology and/or teams of local field auditors. The data represents a cross-section of 1,319 brands among 13 categories (both consumable and non-consumable categories) across an average of 13 countries for the 12-month period ending December 2014. On average, the brands measured in this study represent 73% of 2014 value sales (USD) in each country-category analyzed (private label brands were not included). Stores within Nielsen’s worldwide retail network include grocery, drug, convenience and discount retailers, who, through various cooperation arrangements, share their sales data with Nielsen.
The Nielsen Global Survey of Corporate Social Responsibility and Sustainability was conducted between 23 February – 13 March 2015, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America. In Malaysia, the sample size is 513. The sample has quotas based on age and sex for each country based on its Internet users, and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 percent. This Nielsen survey is based only on the behaviour of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.