At least 60 percent of consumers in India are willing to pay a premium for ‘sustainable products’, while 52 percent in urban India expect to increase spending on planet-friendly brands in the next three years,
However, nascent understanding, high price, availability issues, and lack of sustainable options are currently challenging purchase follow-throughs, revealed a new survey by consulting firm Bain & Company.
Sustainability - A Growing Concern
The report further stated that 20 percent of consumers in India are environmentally and socially conscious while 49 percent are health conscious. The trigger that has motivated the Indian consumer to move towards sustainable products has been the personal impact due to environmental issues, followed closely by family and friends who have influenced their choices.
“There is a latent demand for sustainability products which consumers are not acting on – the ‘say- do’ gap. This presents a huge market opportunity and a consumer trend that is value accretive, not just good for planet or good for investors but good for the consumer and business” said Ravi Swarup, Partner at Bain & Company in India.
In India, 43 percent rank sustainability as the top-five key purchasing criteria, yet sustainable products comprise only 5 percent of the market share in packaged foods.
Most consumers face a number of barriers within a single purchase journey. For example, they may have trouble identifying sustainable products, be unclear on the credibility of the claims, and face gaps in the product range to meet their needs - these are in addition to the likely higher price. It leads to high consumers drop out despite the high intent to shop sustainably.
“Consumer companies have been in the constant quest for the next platform to provide greater value to the consumer and premium their offerings – sustainable products is clearly the platform with the biggest opportunity where the need is already present," added Swarup.
Among more than 16,000 consumers surveyed in the Asia-Pacific region, 15 percent don’t buy sustainable goods because of a lack of information or the simple fact that they don’t trust claims of sustainability. Another 10 percent mentioned low availability. Only 16 percent cite price as a barrier.
Sustainability is also an increasingly important issue for investors, with 78 percent of global investors saying that they place more emphasis on ESG now than they did five years ago and 65 percent believing that ESG will become standard practice over the next five years. Singapore requires all listed companies to provide climate reporting, and India has mandated that its top 1,000 listed companies do the same starting in 2023.
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