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08.02.2023

6 out of 10 consumers pay attention to sustainability criteria when shopping

ESG aspects are most important to consumers when it comes to food and clothing. Young people in particular demand information and transparency: sustainability labels, certifications and reports ensure trust. For retailers and manufacturers, sustainability is becoming a must.

Under what conditions are the cows kept whose milk I drink? Does the manufacturer of my new T-shirt tolerate child labor? Does the retailer I trust deal fairly with employees and business partners? The majority of Germans ask themselves questions like these before making a purchasing decision. When shopping, 59 percent of consumers always or at least frequently pay attention to the ecological, economic or social sustainability of retailers and manufacturers. Among those under 35, the figure is even hugher with two-thirds, and among those over 55, one in two. These are the findings of a representative survey of 1,000 people in Germany commissioned by the auditing and consulting firm PwC Germany.

ESG aspects are most important to consumers when it comes to food and clothing. Young people in particular demand information and transparency: sustainability labels, certifications and reports ensure trust. For retailers and manufacturers, sustainability is becoming a must.

Under what conditions are the cows kept whose milk I drink? Does the manufacturer of my new T-shirt tolerate child labor? Does the retailer I trust deal fairly with employees and business partners? The majority of Germans ask themselves questions like these before making a purchasing decision. When shopping, 59 percent of consumers always or at least frequently pay attention to the ecological, economic or social sustainability of retailers and manufacturers. Among those under 35, the figure is even hugher with two-thirds, and among those over 55, one in two. These are the findings of a representative survey of 1,000 people in Germany commissioned by the auditing and consulting firm PwC Germany.

Sustainability is no longer a question of "if", but "how".
"Sustainability has become mainstream in recent years. For companies, paying attention to sustainability in their supply chains has already become a must," comments Dr. Christian Wulff. The Head of Retail and Consumer Goods at PwC Germany is convinced that companies will already have to give good reasons in the near future if they do not pay attention to the environment, social aspects and good corporate governance when producing a product. "The issue of sustainability is therefore no longer a question of whether, but of how," the retail expert continues.

Sustainability includes various aspects in the three areas of environment, social and sustainable governance (ESG). In the case of environmental sustainability, the focus is on issues relating to animal welfare - such as the conditions in which animals are kept or animal testing - and the use of recyclable materials. 40 percent of Germans would like to be informed about this before making a purchase. In the social sphere, the majority of respondents would like to know whether retailers and manufacturers comply with human rights (58 percent) - for example, whether they tolerate forced or child labor in their value chains. In terms of governance, one in two respondents would like to know about supply chains and be able to trace products before making a purchase.

Sustainability is particularly important for food
How closely consumers look at sustainability also depends on the product: For example, sustainability is particularly important to them when it comes to food. 81 percent of Germans pay attention to at least one of the three ESG criteria when buying food, i.e. environment, social issues or good corporate governance. But these criteria are also relevant when buying textiles: As many as 63 percent say they look at how sustainably the item was produced when buying clothing or shoes. While environmental aspects play the biggest role for food (62 percent), consumers are paying more attention to social aspects for clothing, shoes and accessories (52 percent).

Almost every second person has recently switched to sustainable products
The growing importance of ESG aspects in the purchasing behavior of German consumers is also evidenced by the shifts toward buying sustainable products. The trend toward sustainable products is clearest in the case of food: 45 percent of respondents state that they have consciously switched to more sustainable products within the past two years. By contrast, only 17 percent admit to switching (back) to less sustainable products, with one in three stating a lack of financial resources as the reason.

For just under half of those surveyed, a possible switch to more sustainable products would be supported by better availability in stationary retail. Legal regulations are also seen as helpful, both in terms of product labeling (38 percent) and for the production process (37 percent). More eye-catching product placement in stores would also help (37 percent).

Young people in particular demand transparency and education
Consumers' need for transparency in ESG matters is significant: According to the survey, almost three quarters of Germans obtain information about environmental sustainability issues at least occasionally. Two-thirds research aspects of social sustainability. A good half regularly find out about sustainable corporate governance.

Age has a major influence on how intensively people deal with the issue: While 80 percent of 16- to 24-year-olds find out about the environmental aspects of a product before buying it, only 59 percent of those over 65 do. "Younger people in particular are actively informing themselves and demanding transparency around ESG criteria," sums up Christian Wulff.

Consumers want information on packaging and online
To meet this need for information, the PwC expert advises manufacturers and retailers to provide detailed information about ESG aspects of products, especially online. "Keeping the associated, significantly increasing flood of data up to date at all times is increasingly becoming a challenge for companies that can only be solved by significant investments in new technologies."

Consumers agree on what companies can do to lend more credibility to their sustainability activities: A solid two-thirds consider recognized sustainability labels, certifications or independently audited sustainability reports to be suitable for credibly communicating activities in terms of ESG. "The results of our survey show that labels and independent certifications are very important in gaining the trust of customers. It is therefore worthwhile to have ESG measures confirmed by external organizations," says Christian Wulff.

Retailers and manufacturers should focus on transparency
"Manufacturers and retailers are faced with the task of ensuring a high level of transparency with regard to the sustainability of their products. This calls for honesty, but also creativity: In the case of fashion, for example, it is conceivable to trace the individual stages of the supply chain in detail and to show the costs incurred in the process. In this way, consumers can understand exactly how a price comes about," concludes Christian Wulff.

Source:

PwC / Textination

RETAIL IN HONG KONG EXPECTS STRONG UPTURN Photo: Pixabay
27.03.2018

RETAIL IN HONG KONG EXPECTS STRONG UPTURN

  • Sales increase of 4 to 6 per cent targeted for 2018
  • Population favors traditional shopping experience

Hong Kong (GTAI) - Hong Kong's favorite pastime is shopping. Chinese tourists also visit the city just for shopping quite often. The demand for jewelry, watches and cosmetics in particular is booming. The retail sales of the Special Administrative Region (SVR) is expected to rise to around USD 60 billion in 2018. The status-conscious consumers prefer Italian and French luxury goods. German providers can score in certain categories.

  • Sales increase of 4 to 6 per cent targeted for 2018
  • Population favors traditional shopping experience

Hong Kong (GTAI) - Hong Kong's favorite pastime is shopping. Chinese tourists also visit the city just for shopping quite often. The demand for jewelry, watches and cosmetics in particular is booming. The retail sales of the Special Administrative Region (SVR) is expected to rise to around USD 60 billion in 2018. The status-conscious consumers prefer Italian and French luxury goods. German providers can score in certain categories.

The Hong Kong Special Administrative Region (SAR) retail sector experienced one of its worst years of recent history in 2016. According to the statistics office, sales shrank nominally by 8 percent compared to the previous year. On the one hand, domestic consumers showed themselves buttoned-up side in the face of a rather sluggish economy. Private consumption rose in real terms by just under 2 percent.
 
On the other hand, the number of foreign visitors decreased. The tourism authority counted around 57 million arrivals in 2016 only, which was almost 5 percent less than in 2015. Three quarters of the tourists traditionally come from the neighboring Chinese mainland and are particularly eager to buy. But in 2016, they restricted their purchases.

Domestic consumption rose in real terms by nearly 7 percent in the third quarter of 2017
However, the second half of 2017 brought the turnaround. The overall economy of SVR revived noticeably. Consumer spending in the third quarter increased by nearly 7 percent in real terms compared to the same period of the previous year. The number of tourists also rose again. From January to December, the authorities registered a growth of more than 3 percent.

Foreign visitor arrivals in Hong Kong (in millions)
Year Visitors
2014 60.8
2015 59.3
2016 56.7
2017 58.5
2018 *) 60.0

*) Forecast
Source: Hong Kong Tourism Board

Retail sales rose in 2017 as a result by just over 2 percent to more than USD 57 billion. Especially at the end of the year, business had developed very briskly. In the fourth quarter, revenues increased by nearly 6 percent compared to the same quarter of the previous year. That leaves the economic researchers hoping for 2018. The auditing company PWC, for example, expects a market growth of 4 to 6 percent. As a result, the total revenues should rise to around USD 60 billion. It would thus be on about the same level as in 2014, but only in nominal terms.

Hong Kong retail sales (in USD bn, change on year to year in %)
Year Value Change
2015 60.9 -3.7
2016 56.0 -8.1
2017 57.2 2.2
2018 *) about 60,0 4.0 to 6.0

*) Forecast
Source: 2014 til 2017: Hong Kong Statistical Office; 2018: PwC

The individual sectors of the retail trade developed very differently in 2017. The demand for electronic articles was weakening. But the business with jewelry, watches and cosmetics flourished. These are small and light goods, that Chinese tourists usually can take across the border without customs clearance. The equally lively sales of food and beverages as well as motor vehicles is mainly due to the greater spending pleasure of domestic consumers.

Retail sales in 2017, by product group
(in USD bn, year-on-year change in %)
Product group Value Change
Jewelry and Watches 9.6 3.4
Textiles 7.7 0.2
Medicine and Cosmetics 5.6 5.5
Food and Beverages 5.4 3.2
Electronic Articles 3.1 -9.0
Automotive, incl. parts 2.0 3.1
Furniture 0.9 2.2
Books and Stationery 0.9 1.0

Source: Hong Kong Statistical Office
 
For German providers of consumer goods, the former British colony is a not unattractive market. Although the population of 7.4 million is quite small, it has a gross domestic product (GDP) per capita that is at the level of Germany. Since there is virtually no manufacturing industry, almost all goods need to be imported. The Chinese tourists increase the volume of demand. In 2017 45 million visitors from the People's Republic came to Hong Kong. Many of them came just for one day, whose only goal was shopping.

German consumer goods are quite popular with both domestic consumers and Chinese tourists. However, there are big differences between the different sectors. Apparel, leather goods and cosmetics are dominated by French and Italian brands in the upper market segment. For furniture (especially kitchens) or stationery German suppliers however play a significant role. Also body care and food "Made in Germany" enjoy a great popularity.

Big chains dominate the market
The retail sector is predominantly in the hands of large corporations. In the food sector the chains Wellcome and ParknShop dominate, in the drugstore area Watsons and Mannings as well as in the electronics division Fortress and Broadway. The e-commerce however has undermined its dominant position a bit.
However - the population still prefers the traditional shopping experience. Purchasing via the Internet does not yet play a major role for the end customer as in other countries around the world. But it has changed the business in the B2B area. In the meantime restaurants and hotels mostly shop online.

Internet addresses
Name Internet address
Census and Statistics Department http://www.censtatd.gov.hk/home/index.jsp (Homepage); http://www.censtatd.gov.hk/hkstat/sub/sp320.jsp?tableID=089&ID=0&productType=8
(Overview of retail sales);
http://gia.info.gov.hk/general/201802/01/P2018020100410_277399_1_1517469181773.pdf
(Detailed retail sales statistics)
Hong Kong Tourism Board http://partnernet.hktb.com/filemanager/intranet/pm/VisitorArrivalStatistics/ViS_Stat_E/VisE_2017/Tourism%20Statistics%2012%202017.pdf
(Visitor Information and arrivals)  


   

 

More information:
Hong Kong Retail
Source:

Roland Rhode, Germany Trade & Invest www.gtai.de