The Green

Consumer
Since 1991, the year the Indian economy was liberalized, private final consumption
expenditure (PFCE) or household expenditure in India has increased several folds. In
these last two decades, the Indian consumer has got access to an increased
offering of products and brands across all consumption categories like food,
clothing, durables and many others.
During this period of increased household consumption, the per capita emission of
CO in India has doubled to reach 1.7 metric tons (MT) as per 2010 year data from
World Bank. In comparison, the emissions in China have grown three fold to reach
6.2 MT and in US it has fallen 8% to reach 17.6 MT. Many elements of PFCE have
significant impact on greenhouse gas emissions for example consumption of meat
and dairy products. As per FAO, livestock contributes to 14.5% of all human
generated greenhouse gases. So indirectly meat and dairy products consumption is
a large contributor to greenhouse gas emissions.
In 2013 Interbrand conducted a perception survey of 10,000 consumers across the
ten largest economies based on GDP and discovered that more than half of the
people questioned were concerned about environmental issues:

In the this study , Indian consumers seemed to be very aware and concerned about
environmental issues and willing to pay a little extra for green products and
services.
One of their research findings was It is not just concern that many claim; more
than a third of people in most countries claim to be prepared to pay a little extra
for environmentally responsible products or services. In some countries this figure

reaches well over half of the people asked. Furthermore, around half claim they
will not purchase products from companies that have a negative reputation
regarding the environment.
However, when asked if they always
consider
the

environmental impact of their purchase and lifestyle, those numbers drop

significantly. As we know from other research and our own experience, there is
often a significant disconnect between what people say based on their best
intentions and what they do when faced with the pressures of daily life.
The 2011 Image Power Green Brands Survey by Landor Associates and Penn
Schoen Berland captured the perspectives of more than 9,000 consumers in
eight countries including developed countries (Australia, France, Germany, the
United Kingdom, and the United States) and those in the developing countries
(Brazil, China, and India). One of the findings from the survey was that that
demand for green continues to grow in these developing markets, with consumers
willing to pay up to 10 percent more for products that are environmentally friendly.

The survey also sought answer to - When people do buy green, what are they
buying? Respondents indicated theyre most likely to purchase green products in the
household, grocery, personal care, and packaged food and beverage categories but
interest was also growing in big ticket items.
There are also some interesting outcomes from the Euromonitor Internationals
2011 Annual Study of global consumers across eight countries (including India) to
find out how green factors are guiding shoppers purchasing decisions and what
this means for marketers. This study found that there is an impact of dietary
restrictions

The survey results suggested that a significant proportion of green shoppers

are non-meat- eaters, or that those who do not eat meat are more frequent
buyers of green products.
Unsurprisingly, given the strong Hindu population, 75% of Indian respondents
were found to be non-meat-eating (16% were pescetarian and 11% eschewed
red meat only); the highest percentage among all countries.
The importance of all the listed green/ethical descriptors was found to be
much higher among non-meat-eaters than among those eating meat.

The study found that:

The relatively affluent groups of Brazilian, Chinese and Indian consumers
who took part in the survey were more concerned than those of any other
country about environmental and ethical factors, while the Japanese showed
the least interest in most descriptors.

Although the survey is not representative of the total populations of Brazil,

China and India, given the skew towards affluent, urban consumers, the
findings were nevertheless indicative of a fledgling green movement among
the middle classes.
Brazil and India had the highest proportion of respondents who considered
both natural and organic labels to be trustworthy, despite the fact that
India has no clear regulatory structure in place for organic labelling.

The increased sales of CFL bulbs (over 300 million units per annum), energy
efficient durables, fuel efficient motor vehicles and the small but fast growing
organic food segment in India are some of the hard indicators of the growing
purchase of green products by Indian consumers.
But it is important to note that the Indian consumer is a very value driven. So
companies will need to innovate to offer products that have the functional value
sought by the consumer and the green benefit whilst keeping pricing premiums
at zero or a maximum of 10%.
In a strange way the India consumer is green because of historical factors. For example

A large percentage of rural population still uses bicycles or walking for

personal transport due to low income level that do not allow them to
buy motorcycles
Dietary habits- Majority of Indians are vegetarian

Though, the Indian consumer is relatively a lower emitter of Green House Gases
compared to US and China but with the desire for better lifestyles backed by
increasing incomes, PFCE will continue to increase in India at above world average.
Consequently the greenhouse gas emissions and other ecologically adverse
impacts will also increase unless the government, the industry and the individual
consumer in India become more green in their thinking, behaviour and actions.
The government needs a strategic plan to ensure that the GDP (and PFCE) growth
in India is managed to ensure a low carbon economy whilst providing its
citizens a decent lifestyle and standard of living. Equally the individual consumer
also needs to realize their role in the green movement and drive consumption in
the right direction. Finally the corporates need to recognize the new business
opportunities this will throw up and develop their own corporate strategy such that
green thinking is inbuilt.

For further details, please

contact: Sanjiv Bhatia,
President, STENUM Asia
Email: Sanjiv.bhatia@stenumasia.org info@switchgreenretail.in
Web: www.switch-greenretail.in