Will Emerging Markets like China and Brazil Lead the World in Green Consumption?

If you’re wondering what’s going on with green consumption these days, GfK has some answers for you. According to the company’s latest global green survey, the Green Gauge Global, purchases of eco-friendly products have grown significantly in two of the world’s leading markets – China and Brazil, while pricing of eco-friendly products continues to be the number one obstacle among consumers worldwide.

Too often there are wide gaps between surveys on green consumers’ attitudes and behavior and real data on green consumption, which causes me to take these surveys with a grain of salt. Nevertheless, the Green Gauge Global is worth exploring for three reasons. First, it is a global survey – too many surveys tend to focus only on the American consumer, but as you know there are other important economies in the world as well. Second, as far as I know, this is the largest survey on green consumption with over 35,000 participants in 25 key markets. Third, this is not a one-time survey – this is the third time it has been conducted, so you can look here not just for figures but also for trends.

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.

Still, 6 in 10 consumers globally feel, according the Green Gauge Global, that eco-friendly products are too expensive – roughly the same proportion found in 2011. In fact, this sentiment is on the rise in some of the same nations where green buying increased, such as China (up 5 percentage points) and South Africa (up 7 points). Frankly, you don’t really need to read these findings to figure out the premium prices are a major obstacle for most green products, but it is interesting to see how again and again consumers indicate this is a key issue for them. In 2009, for example, NMI found that pricing was by far the biggest problem for American consumers – 63 percent indicated it as an obstacle, whereas the second highest ranked obstacle (uncertainty about the greenness of products claiming to be green) bothered only 36 percent.

This finding indicates that first, green products still don’t create sufficient value for consumers to justify their price, and second, that companies haven’t figured out yet how to produce green products at competitive prices. “Green-friendly companies entering new markets should be attuned to price concerns from the start – pricing products competitively to win loyal customers. Our research suggests that, with careful marketing, growth in the green market will sustain in key countries for years to come,” said Timothy Kenyon, director of the GfK Green Gauge Global study at GfK.

Other than these interesting findings, the Green Gauge Global also provide 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.

What’s the importance of this segmentation? It’s hard to tell. We have seen many efforts to classify consumers according to their green behavior in the last decade. GfK itself has a long history of doing so, although with different group names such as true blue greens, greenback greens, sprouts and so on. As Joel Makower once said, one thing remains fairly consistent across nearly all of these studies and this is the fact that the marketplace is getting greener. Yet, to understand the pace of this change I believe we’ll need to look at a study that tracks real data, not attitudes. After all, you need to remember that what really matters is how people actually act, not what they say in these surveys.

And if we mention actual actions, I’d like to add one more thought: Hasn’t the time arrived for surveys to look beyond green consumption while trying to characterize the green economy? After all, nowadays utilization of the access economy, DIY, or shifting to free or inexpensive options (public library, biking, growing vegetables) have become synonymous with the ‘green consumer’ no less and maybe even more than purchasing eco-friendly products. We already saw this approach in BBMG’s New Consumers study and to some extent also in the 2012 Greendex, and it would be great to see it reflected in the Green Gauge Global as well.

[Image credit: Renato @Mainland China, Flickr Creative Commons]

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and the New School, teaching courses in green business and new product development.