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China’s Middle-Class Consumers: Attitudes towards Green Consumption podcast

In a survey conducted by the Hong Kong Trade Development Council [1] on China’s middle-class consumers, 71% of respondents said they had been spending more on green products in the past year. While 73% of the respondents claimed that their greater expenditure on green products was mainly down to health concerns, 59% also agreed that the greater availability of green products and the increase in convenience when buying them had prompted them to spend more on such products than before.

Increased Spending on Green Products

It became clear at the focus groups that although consumers were already aware of the benefits of green foods in the past, they didn’t buy them much because of limited sales channels and high prices. However, in recent years, with online sales of live and fresh foods gaining popularity, green foods have become much more accessible to the general public. This is particularly true of organic fruits and vegetables, and imported meats. Prices have been kept down by frequent promotional offers and by websites dealing directly with local farms. Also, the convenience of using online platforms has made shopping for green products much easier. A number of the focus group participants said that they had already got used to buying live and fresh foods online, with some ordering organic vegetables on a regular basis.

According to the survey, 71% of respondents agreed with the statement that their “spending on green products has increased in the past year”. That proportion increases to 76% in households with an income above RMB20,000.

Chart: Spending on Green Products in the Past Year
Chart: Spending on Green Products in the Past Year
Table: Spending on Green Products in the Past Year
Table: Spending on Green Products in the Past Year

More Market Supplies Boost Green Consumption

Although consumers have for some time attached great importance to issues such as quality of life and health and safety, especially as their income has risen, the survey suggests that this is not the main reason behind increased green consumption. 41% of respondents agreed with the statement that “I am more concerned about quality of life and safety than before” (with the proportion of those in the 36-50 age group agreeing with it reaching as high as 47%). But at the focus groups, it became clear that although consumers were already aware of the benefits of green foods, in the past they had not bought such products often because of limited sales outlets and high prices.

The survey reveals that the main reason behind increased spending on green products is that there are more supplies on the market. 59% of respondents said that was their main motivation behind increasing their green consumption.  In addition, 57% of respondents said they had been lured to spend more on green products because there were “more purchase channels, greater convenience, and (they) can buy at physical stores as well as place orders online”.

Among the male respondents, 36% named the narrowing price gaps between green and conventional products as the reason for spending more on green products, compared to only 29% of their female counterparts. This suggests that lowering prices on green products will attract more male consumers.

Chart: Reasons for Spending More on Green Products
Chart: Reasons for Spending More on Green Products

Health and Safety Concerns are Main Force Driving Green Consumption

At the focus groups, consumers expressed concerns about protecting their health – a factor which is affecting their consumption patterns. For example, respondents in almost all the surveyed cities have air purifiers at home. When asked about their attitude towards green consumption, 73% of all respondents agreed with the statement “I tend to use products ensuring health and safety, e.g. those that are organic and contain no additives, even though the prices are higher than conventional products”. The higher the household income, the higher the proportion of respondents agreeing with this statement.

Although the proportion of respondents naming “concern for the environment” as the reason for turning to green consumption is not as high as that of those giving “protecting their own health” as the reason, 59% agreed with the statement “I tend to use eco-friendly products, e.g. those causing no harm to the environment and using renewable resources, even though the prices are higher than conventional products”. Again, the higher the household income, the higher the proportion of respondents agreeing with this statement.

Chart: Attitudes towards Green Consumption
Chart: Attitudes towards Green Consumption
Table: Attitudes towards Green Consumption
Table: Attitudes towards Green Consumption

Consumers Willing to Pay More for All Kinds of Green Products

Over 30% of respondents are “very willing” to pay more for different kinds of green products, and more than half of those are “very willing” to buy both “foods or daily necessities for children” and “organic foods”. The most popular product group for which respondents in the survey were “very willing” to pay more for was “foods or daily necessities for children”. That may be accounted for by the fact that 76% of respondents are married with children, concerned about product safety and keen to get the best for their children.

The three kinds of green products that female respondents are more likely to be “very willing” to pay more to buy are “foods or daily necessities for children”, “organic foods” and “organic skincare products/cosmetics” – much more so than their male counterparts.

Households with higher incomes are in general more likely to be “very willing” to pay more for green products, in almost all of the product categories in the survey.

Age also has a bearing on the willingness to pay more for green products. Respondents aged 25-30 were most likely to be  “very willing” to pay more for three kinds of products - “garments made from organic cotton”, “organic skincare products/cosmetics” and “green products made from recycled or renewable resources”. 33% said they were “very willing” to pay more for clothes from organic cotton, compared to only 27% in the 31-50 age group. 46% of 25-30 year-olds would pay more for organic skincare and cosmetic products, as opposed to just 39% of 31-50 year-olds. And 40% of the younger age band would pay more for recycled and renewable products, while only 32% of their older counterparts would do so.

Chart: “Very Willing” to Pay More for Green Products
Chart: “Very Willing” to Pay More for Green Products
Table: “Very Willing” to Pay More for Green Products
Table: “Very Willing” to Pay More for Green Products

Appendix

Background

With its high spending power and penchant for consumption, the mainland middle class is the main target of Hong Kong manufacturers and traders eyeing the mainland market. HKTDC Research has carried out several studies on mainland middle-class consumers in the past for the purpose of tracking and understanding their spending patterns, mentality and changes in lifestyles in order to provide points of reference for Hong Kong companies wishing to tap the mainland market.

Apart from trying to discover the general characteristics of middle-class consumption behaviour, the present survey also explores the impact China’s 13th Five-Year Plan has on middle-class consumption and way of life. One of the policy directions of the Plan is promoting new consumption patterns, which includes encouraging the consumption of green, fashionable and quality products, encouraging the development of custom-made services to meet the demand for personalisation, expanding service consumption, and advancing online/offline integration. Moreover, to take into account the post-80s consumers, who grew up in times when China experienced substantial economic growth and whose upbringing is very different from that of their parents, efforts were made in this survey to reflect their consumption characteristics.

Methodology

The survey was carried out in January 2017 in eight mainland cities where a total of 2,000 consumers were polled by online questionnaire. Before conducting the questionnaire survey, six consumer focus group discussions were held in Shanghai, Wuhan and Chengdu (two in each city). The objective of the focus group discussions is to further understand the spending mentality of mainland consumers by way of qualitative analysis.

 

Table: Design of Focus Groups
Table: Design of Focus Groups
Table: Design of Online Questionnaire Survey
Table: Design of Online Questionnaire Survey
Table: Average Monthly Household Income of Respondents (RMB)
Table: Average Monthly Household Income of Respondents (RMB)
Table: Occupation of Respondents, by City (%)
Table: Occupation of Respondents, by City (%)
Table: Education Level of Respondents, by City (%)
Table: Education Level of Respondents, by City (%)
Table: Marital Status of Respondents, by City (%)
Table: Marital Status of Respondents, by City (%)

[1]  See Appendix for details of the survey.

Content provided by Picture: Billy Wong
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