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LOHAS and Green Consumers in China


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In this presentation, given at the 2011 Ecolifestyle forum in Shanghai, I speak about the catalysts, trends, and opportunities for "green" and LOHAS in China. …

In this presentation, given at the 2011 Ecolifestyle forum in Shanghai, I speak about the catalysts, trends, and opportunities for "green" and LOHAS in China.

Once a market confined to exporting of products, there is now a growing domestic market for products and services locally.

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  • 1. China’s “ green ” markets
  • 2. What is Green in China?
    • Fundamentally, the issues that Chinese and Westerners face are very different
      • Western concept of “green” and “sustainability” are intangible for average Chinese
      • Chinese understanding of “green” and “sustainability are heavily tied to person
  • 3. .. But it is also Educating the Future Economic Opportunity Quality of Life
  • 4. Who Buys Green/ LOHAS in China?
  • 5. What Green Models Exist in China?
    • Government Procurement
    • Largest market for “green” in China
    • Energy, transportation, healthcare, environmental repair are all procured by government agencies
    • Export Market
    • Largest market for foreign manufacturers in China
    • Organics (food and clothing), fair trade textiles, bamboo materials, building materials, automotives, etc
    • Traditional profit center for manufacturers
    • Domestic China Market
    • Private consumers for “green” products
    • Organic food, health/ wellness, personal transportation, clothing, and baby goods.
    • The biggest market going forward?
  • 6. What are the models that have succeeded? Elderly care Green products Organic Farm Children’s products Health / Wellness Education Environment Cleantech What are they buying?
  • 7. Health & Wellness
    • Problems of health and wellness:
    • Lifestyles growing more sedimentary
    • Food Quality issues
    • Stress
    • Pollution
    • Target markets:
    • Luxury market - ecotravel, organic clothing, and retreats
    • Middle class – Elderly centre, organic foods and fat camps
    • BOP market – HIV/ Aids Training, nutritional biscuits and affordable eye care for rural students
  • 8. Environment
    • China’s economic growth has a cost to the environment
    • Water pollution – more than 95% of China’s water is not drinkable
    • Air Pollution – 16 of the world’s 20 cities with the worst air are in China
    • Carbon emissions – China is now #1 emitter of carbon dioxide
    • Target markets:
    • In home water treatment / air purification
    • Organic foods
    • Overseas real estate
  • 9. Elderly
      • In 2010, 21% of Shanghai’s 18 million full time residents were over the age of 60
        • Multiple districts have more then 25%
      • By 2050, China will have more than 440 million people older than 60, 31% of the population
    • Target markets:
    • Luxury market – Full service retirement facility, organic foods, travel, & lifestyle
    • Middle class – Elderly centre, family services, clubs & activities
    • BOP market – Affordable healthcare
  • 10. Migration / Urbanization
    • Over 400m people have moved to city in last 20 years, & another 400m will move
      • When moving from rural parts of China, to urban, traditional communities are being lost.
      • Migrant children need to be educated
      • Migrants experience discrimination and locked out of economies/ services
    • Potential opportunities for Social Enterprise:
    • Provide a product or service that helps migrants integrate into new setting or help maintain ties to old
    • Offer critical services (healthcare, education, & finance) to migrants outside the system
    • Development of new products targeted towards this improving quality of life for group
  • 11. What Drives Buying? Labor Scandal
    • Immediate Impact
    • Domestic and International press coverage
    • 45,000 investigators sent to Shanxi
    • Public acknowledgement of system failure and call for change by party
    Product Recalls
    • International witch hunt and tit-for-tat
    • Economic impact to Chinese manufacturers
    • Questions at home about products surface
    Immediate Impact
    • Immediate Impact
    • Environmental awareness took a quantum leap
      • Domestic / International press coverage
      • National support and sympathy for affected
    Taihu Lake 5.12 Earthquake
    • Immediate Impact
    • 24/ 7 news coverage – with citizen journalists first to report (twitter)
    • Intense corporate pressure to donate and manage messaging carefully
    • First time many firms experienced the “mass” media
    • 24/7 Full press coverage on TV, newspaper, blogs, &twitter
    • Public awareness of problems with food industry, and call for changes
    • Ongoing investigative reporting into other areas / other companies
    Immediate Impact Milk Scandal
  • 12. Will Green Be Profitable? For a firm to succeed, it must do the following correctly:
    • Have a clear understanding of target market
      • Why would your target purchase product/ service?
      • What is their tangible catalyst for change
    • Have a credible value proposition
      • Being the industry leader will provide a premium, and could buy loyalty
      • Any ambiguity could lead to disaster
    • Develop organic channels
      • Using agents long term can introduce risk to distribution and markets, and increase costs
      • Consumers are looking for intimate purchasing
  • 13. Takeaways
    • The markets for green, LOHAS, and eco exist:
    • Niche markets for luxury items
    • Largest markets found in addressing the needs of middle class (organic foods / baby products)
    • Value trumps price:
    • Chinese consumers will pay premiums for safe products, but needs to be more than “green”
    • Product must have a tangible product proposition
    • Chinese are not buying green as part of mission to save Earth
    • Buying to improve their immediate environment/ community/ family
    • The problems that are faced are complex, dynamic, and growing
    • Credibility Counts:
    • Chinese consumers are looking for credibility in market.
    • Word of mouth counts for more than a label
  • 14. “ In the end, environmental, social and economic sustainability cannot be separated. A sustainable planet must include a sustainable human civilization – resilient human systems that respect the complicated relationships among poverty, human rights, economic development, environmental health, and human success” - Institute for the Future, 2008
      • Richard Brubaker
      • Founder and Managing Director, Collective Responsibility
      • Founder and Executive Volunteer, HandsOn China
      • Adjunct Professor, Sustainability and Responsible Leadership, CEIBS
      • [email_address]