Thursday, August 23, 2012

Build a Door - by Jin

GfK’s most recent survey of global green purchases shows that China and Brazil are two of the world’s leading markets for eco-friendly products. This survey, unlike most “green” surveys, focuses not exclusively on North American consumers (hence not an isolated study), is the largest survey on green consumption with over 35,000 participants in 25 key markets, and is a continuing survey with the most recent one being the third of its editions (thus with historical data for comparison). 

This survey, along with the 2012 National Geographic’s GlobeScan Consumer Greendex, shows the concurrent trends of eco-friendly products and emerging dominance of green markets coincide with developments of the economic superstars such as Brazil and China in light of European instabilities and a sluggish U.S. economy. 


So what can we learn from the latest Green Gauge Global? As mentioned, the first interesting finding is that consumers in emerging markets like Brazil and China are purchasing more green products. According to the survey, the proportions of consumers who factor environmental protection into their purchase decisions grew 6 percentage points in China and 5 points in Brazil. In addition, Mexico and South Africa also recorded significant increases in the past year. These findings coincide with the 2012 National Geographic/GlobeScan Consumer Greendex, where the top-scoring (green) consumers of 2012 were from India, China, and Brazil.
Raz Godelnik, Will Emerging Markets like China and Brazil Leadthe World in Green Consumption?

I have argued before that while we Americans may have enough land per capita to pollute and enough resources per household to waste, it behooves us to take advantage of our current situation and develop a robust “green” market condition so we can compete down the road. Well, the GfK survey and NG’s Greendex suggests we may be already too late to the game.Or is it?

Worrying for the U.S. future prospects aside, there are things we can learn from the survey and the Greendex to help improve however infant green market we have. First, most of the consumers world-wide still believe “green” products are too expensive. The studies show this kind of sentiment is currently on the rise, which gives us an incentive to create innovative solution to lower the cost of production so we can compete when the consumer sentiment topples the existing “green” products. There is a connected but indirect issue of “greenwashing.” Mr. Godelnik argues that many consumers express their concerns for cost is because they are uncertain of the actual “greenness” of the product claiming to be green. It’s a relatively new market and the regulatory schemes have not reached a tipping point where consumers have reached the confidence level. This gives the U.S. market an added opportunity to develop a robust and reliable certifying and labeling system. While markets like China and Brazil are plagued with counterfeit problems and fraud, perhaps our more "legit" products will sneak into their large consumer base with minimum competition from their domestic products and minimum resistance from their market demographics.      

The survey also provide a list of rather useful consumer segmentation, defined by consumers’ environment-related beliefs and behaviors. These segments include:
Glamour Greens (30 percent of consumers worldwide) – have an average level of environmental concerns, but see a green lifestyle as a status indicator.
The Jaded (23 percent) – skeptics who feel green issues are less important. This segment grew by 2 points globally since last year.
Green inDeeds (percentage not available) – people who show the highest concern for the environment and are the most likely to take the environment into account when buying products.
Carbon Cultured (NA) – have higher environmental awareness but can lag in their behaviors.
Green in Need (NA) – have the desire, but lack the tools and know-how, to be greener.
While marketing folks would have a field-day with these kind of market segmentation, consultants would love to get their hands on various ways they can recommend to a company to take advantage of such diversity of the market place, the real importance of this kind of segmentation is in its form. It is more useful to understand the changes that has occurred in these segments and compare the demographic shifts in these segments relative to market influencers. Understanding how market influencers are able to shift the market indicators, thus shifting the segments, surely will give anyone an advantage in market entry.  

Mr. Godelnik also recommends that we look beyond the green consumption to characterize the “green” economy. He mentions adding survey elements such as the DIYers, emergence of co-op farms and other sustainable practices. I wholeheartedly agree. Merely measuring a “green” economy ignores the other legs of a transformative economy: the people participating in the transactions, the communities that are impacted, and the business ecosystem that is at the engine of these transformations.  

So while China and Brazil are marching ahead of us in the short run in a limited "green" market, the U.S. market sure does have a lot of opportunities to really get things right and continue to dominate the global economic, political, and social landscape in sustainable ways. 

American exceptionalism is not dead, we just have to wake its ass up that’s all.  

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