Interviews on China’s journey towards sustainability with experts on the ground.
艾佩雯 Pippa Ebel
Strategist @ Hot Pot China
I first arrived in China in 2014 and was immediately drawn in by the rapid pace of life and the challenges it offered linguistically and culturally.
Since 2017, I have worked in Shanghai, Beijing and Chengdu. It is my goal to be able to utilise my on-the-ground China experience and language skills to serve as an enabler for companies looking to launch in China.
樊倩 Emma Phan
Co-Founder @ Zero Waste Chengdu
Emma is a TRUE (Total Resources Usage and Efficiency) Zero Waste Advisor certified by GBCI (Green Businesses Certification Inc.). She graduated from Lund University, Sweden with a degree in Sustainable Urban Development. Since founding Zero Waste Chengdu in 2020, she has been organising educational and consultancy programmes for local businesses, brands and organisations.
Alizée Ccm
CEO & Founder @ Zero Waste Shanghai
Alizée’s background is deeply rooted in sustainability and the circular economy. She founded Zero Waste Shanghai in 2016 and has since been a consultant for global enterprises across China. She is one of the leading voices of sustainability in China.
This year saw an explosion of sustainability initiatives pioneered by China’s industry leaders. In June, Meituan launched its Green Tech Fund, allocating an initial 500m RMB to drive low-carbon emissions. This month, Baidu announced plans to deliver $1 billion in bonds towards environmental, social and governance initiatives, focusing on green buildings, renewable energy and pollution reduction. Meanwhile in the ecommerce sector, Alibaba and JD.com compete for the most ambitious 2030 goals. JD.com aspires to create the world’s largest ecosystem of rooftop photovoltaic (solar cell) power generation, while Alibaba’s affiliate Ant Group promises to reach carbon “net-zero” in carbon output by 2030.
For sustainability in China, all the signals seem to be pointing in the same direction. With China’s central government promising carbon neutrality by 2060, and major conglomerates dishing out sustainability initiatives like candy, environmentalism certainly seems a China-wide priority. That said, despite flashy headlines and impressive milestones, how deeply are issues around the environment understood and discussed in China? How sustainably-minded are Chinese consumers?
Hot Pot Strategist Pippa Ebel connects with China-based experts, to hear their thoughts on sustainability in China today.
Location of sustainably minded consumers surveyed on WeChat. Source: Vogue Business
How much understanding is there around sustainability?
“There is still limited understanding. Chinese consumers know the general word environment (“huanbao”), but they have no idea about resource scarcity. ”
According to sustainability experts based in China, there is still a lack of awareness and education around environmental issues. Although Covid-19 and governmental initiatives such as waste sorting and traffic control have increased awareness, there is still a long way to go. Emma Phan, the co-founder of ZeroWasteChengdu speaks of a “big gap of knowledge” around environmentalism, and the role that individuals can play as consumers.
Despite measures taken by the Central Government since the early 2000s, it has really been since 2018 that there has been a marked change. Emma relates how Covid-19 has served as a “wake up call” across many areas, but particularly for issues of sustainability.
What issues are most relevant to the Chinese public?
“I don’t talk to them about the forest and trees. For our Chinese listeners, what matters to them is the water they drink and the air they breathe. ”
According to Zero Waste Shanghai Founder, Alizée CCM, understanding around the environment is very different in China. Unlike in Europe or North America where many children grow up interacting with nature, for many Chinese people, childhood experiences offered little engagement with nature. Emma reflects with some sadness, that for children growing up in China today, nature is even further removed from their everyday lives.
As such, connections to one’s environment simply don’t exist. Alizée and Emma were aligned when speaking about what matters to their Chinese clients. They care about “the air they breathe and the water they drink”, as well as the quality of the consumables they are purchasing. As such, when engaging new audiences in Shanghai and Chengdu, both founders adapt their language to focus directly on their listeners' day-to-day concerns.
Alizée CCM running an education workshop in Shanghai. Source: Zero Waste Shanghai.
What has changed over the past few years?
“More and more consumers are aware… you can see milk alternatives in all the new coffee shops and small supermarkets. ”
Dairy free milk alternative Oatly collaboration with HeyTea.
Despite there still being a long way to go, things have gained momentum over the past two years. Alizée describes the impact of governmental initiatives, accelerated since 2018, which sparked much greater awareness in local people, particularly those living in the most developed cities. Effective organisation and incentives have led Shanghai, Beijing and Shenzhen to emerge as exemplar cities in China’s changing sustainability landscape.
Although Chengdu is relatively behind, Emma spoke positively about how the city has adopted similar measures, with communities being rewarded for hosting smart recycling bins and the “Chengdu e-travel” platform giving generous rewards to energy conscious drivers.
This mindset has reached individuals too. This is evident in the change of products available and the purchasing habits of individual consumers.
Over the past few years, the growing presence of major plant-based alternative producers such as Beyond Meat, Oatly and Minor Figures has impacted consumer behaviour across China. During the pandemic, oat milk sales shot up by 212% contributing to the growing milk alternative market, valued at 55billion RMB last year. This change in buying habits is not just limited to Tier 1 cities, as according to Emma in Chengdu, you can see milk alternatives in “all the new coffee shops and supermarkets”.
What do businesses entering China need to think about?
“You have to meet the consumer where they are, and bring them to where you would like them to be ”
Chinese consumers will not become environmentally-conscious overnight. It is important to register that for now, change is visible in a growing awareness rather than a national movement. When making purchasing decisions, sustainability is considered an attractive bonus rather than a must-have. Emma recognises that branding plays a key role in the success of sustainability-conscious brands. “Make your product pretty”, she laughs, “when you have people’s attention it is easier to make people think, and change their behaviour.”
Emma reflects how “you have to meet the consumer where they are, and bring them to where you would like them to be”. She emphasises the importance of understanding the knowledge base of your customers and meeting them at their level.
What opportunities are there going forward?
“Over 90% of luxury consumers are aware of sustainability labels and certification. ”
In a recent survey Hot Pot conducted for an electronics brand, we discovered that out of our 150 respondents, over 90% claimed to be able to recognise sustainable labels. More importantly, 93% claimed to actively look for sustainable products. It’s worth noting that this report focused on the most wealthy and educated consumers in China, however, it nonetheless gestures a shift towards more eco-friendly buyers.
Nudepeche - China's own sustainable clothing brand - uses recycled plastic bottles as its primary material.
During my discussions with Emma and Alizée, as well as sustainability reports produced by e-commerce platforms Tmall and JD.com, it is clear that the appetite for sustainable goods is growing rapidly throughout China.
As mentioned, milk alternatives and other plant based products are growing in appeal, availability and variety. Alizée describes some of the successful collaborative campaigns and product releases she has observed, noting how meat and milk alternatives are “really becoming a thing”.
It is not just in consumables that there are significant developments. Within cosmetics, bigger international brands are looking to partner with small, local brands with a strong sustainability identity. Emma speaks of the attention surrounding “safe cosmetic products”, reinforced by Alizée, who speaks of the “huge awareness around the products they are putting on their skin” amongst Chinese consumers.
Hot Pot’s Takeaway: The Revolution is Coming...
...But it’s not here yet. It is clear that in terms of environmental awareness in China, things really are beginning to change. For those like Alizée, who have been engaging in issues of environmentalism in China for almost a decade, there is no time like the present. However, there are still major obstacles.
Awareness and education is limited, and very few consumers have an in-depth knowledge of sustainability issues. As such, any company looking to promote sustainable products in China needs to first research consumer education levels, and adapt their products and brand message accordingly. For now, producing high-quality, environmentally conscious goods is not enough to guarantee commercial success.
No matter how good you are, you also require deep consumer knowledge and a clear, informed marketing approach that looks original and attracts attention.
Although there are particularly visible opportunities within F&B and cosmetics, as well as luxury retail, it is still essential to understand the mindset of your target consumer. In China, trends change rapidly and are affected by regional differences. As brands such as Oatly have shown - success is dependent on careful consumer profiling, investment into local partnerships and original, dynamic campaign ideation.
If you are interested to find out more about sustainability in China, or would like to conduct more in depth research around your brand positioning in China, get in touch! Hot Pot’s Strategy and Operations Team are keen to support your business.