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SUSTAINABILITY CONTINUES TO GAIN MOMENTUM AMONG SOUTHEAST ASIAN CONSUMERS

Vietnamese and Filipino consumers are the most socially-conscious consumers in Southeast Asia

Growth of brands committed to sustainability outstripping non-socially committed brands

Jakarta, 22 October – Consumers in Southeast Asia are the most willing globally to pay more for sustainable products and services, surpassing other regions around the world including Middle East/Africa, Latin America, Europe and North America, according to a new study by global performance management company, Nielsen.

The 2015 Nielsen Global Corporate Sustainability Report shows eight in 10 consumers in Southeast Asia (80%) prefer to buy socially responsible brands, compared to Asia Pacific (76%), Middle East/Africa (75%) and Latin America (71%), Europe (51%), and North America (44%).

Among Southeast Asians, Vietnamese and Filipino consumers are the most socially-conscious, with 86% of respondents from Vietnam and 83% from the Philippines stating their willingness to pay extra for products and services that come from companies who are committed to positive social and environmental impact (up 12 points and 4 points respectively). (See chart 1).

To gain better insight into the factors that influence consumer sentiment and purchase behavior, Nielsen polled 30,000 consumers in 60 countries across the globe. Consumers were asked how much influence factors such as the environment, packaging, price, marketing, and organic or health and wellness claims had on their consumer-goods purchase decisions.

“Consumers nowadays show concern for environmental and societal issues,” says Sagar Phadke, Executive Director, Consumer Insights, Nielsen Indonesia. “In turn, they also expect the same from corporations; hence brands that show commitment to sustainability will win consumers’ hearts.”

According to the Nielsen report, sales of consumer goods from brands with a demonstrated commitment to sustainability grew more than 4% globally in the past year, while those without grew less than 1%.

HEALTH AND WELLNESS

One of the top sustainability factors that influence purchasing for 70% of Southeast Asian consumers is health and wellness. Health and wellness are particularly influential in the Philippines and Vietnam – close to eight in 10 consumers in the Philippines (79%) and Vietnam (77%) say that a product’s health and wellness benefits drive their purchase decisions (see chart 2).

Products made with fresh, natural, and/or organic ingredients carry similar weight with consumers in the region (69%).

“Utilizing opportunities to bridge health benefits and the ingredients that support the claim is a powerful and impactful way to connect with consumers,” advises Sagar.

BRAND TRUST

Equally important among consumers in the region is brand trust (70%).

“Bigger global consumer-goods brands that overlook sustainability increase reputational and business risk. It leaves them 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,” says Sagar.

THE ENVIRONMENT

When it comes to purchase intent, commitment to the environment has the power to sway product purchase for 57% of consumers in Southeast Asia. Commitment to either social value or the consumer’s community are also important (each influencing 56% and 55% of respondents, respectively). Retail data backs up the importance of these influencers. 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 hierarchy among drivers of consumer loyalty and brand performance,” observes Sagar. “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.”

TV ADS

TV ads highlighting a company’s commitment to positive social and/or environmental impact are influential in the path to purchase for 42% of respondents in Southeast Asia. “Commitment to sustainability needs to be reinforced by using multiple sources and distribution channels such as third-party validation (news coverage), annual reports, affiliation with a respected non-profit or civic organization, employee volunteerism, advertising, or reporting actual work in the community on a web site,” says Sagar. “Authenticity and credibility are essential.  Care must be taken to place the emphasis on demonstrating good deeds versus merely brand promotion.”

CHART 1: WILLING TO PAY EXTRA FOR PRODUCTS AND SERVICES THAT COME FROM COMPANIES WHO ARE COMMITTED TO POSITIVE SOCIAL AND ENVIRONMENTAL IMPACT

Source: Nielsen Global Corporate Sustainability Report, 2015

CHART 2: TOP SUSTAINABILITY PURCHASING DRIVERS

Source: Nielsen Global Corporate Sustainability Report, 2015

ABOUT THE RETAIL SALES ANALYSIS

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.

ABOUT THE GLOBAL SURVEY

The Nielsen Global Survey of Corporate Social Responsibility and Sustainability was conducted between Feb. 23-March 13, 2015, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America. 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 behavior 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.

ABOUT NIELSEN

Nielsen N.V. (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers Watch and Buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services across all devices where content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement as well as analytics that help improve performance.  Nielsen, an S&P 500 company, has operations in over 100 countries that cover more than 90 percent of the world’s population. For more information, visit www.nielsen.com