While conscious consumption can be described as a global phenomenon, each country is developing unique solutions to its most pressing issues. In India, conscious consumption trends are evident in the areas of emission-friendly transportation, resource efficiency, replacement of non-bio degradables, fashion and luxury, wellness and nature conservation.
As we head into a new decade, the pace of innovation and technology adoption has never been higher. Consumer attitudes and interests are changing just as rapidly, owing to exposure to new ideas and technologies and a fast-changing mind-set that governs the way consumers have started to consider the broader impact of their purchases. While such ’conscious consumers’ might still want to avail of particular products and services, they are increasingly aware that these come to them through an ethical, environment friendly means and not just at any cost. According to Nielsen’s Q2 2017 Global Survey of Consumer Shopping Behaviour, Indonesians, Indians, Malaysians, Thais and Filipinos are most inclined to choose a product based on whether it is fair-trade labeled or environmentally friendly. Conversely, consumers from New Zealand and Australia are the least likely to do the same.
Part of the reason for this discrepancy could be that many people in emerging markets are experiencing the negative effects of rapid economic growth first hand, including urbanisation, pollution and rising inequality. This leads them to question the impact of production and consumption on society.
Spotlight on India
In the Indian context, the theme of conscious consumption takes on greater significance in the new decade. India houses the world’s largest millennial population that have unique consumption trends – eg. Are socially and ethically aware, community driven, being value conscious. For instance consumers today prefer the “sharing economy” such as hiring a car instead of buying it – a stark departure from the consumption behavior of the Gen X and baby boomers.
How do you want to live your life? It may seem a little ‘new age’ to ask but the millennials and Gen Z of today are recognizing that the planet cannot support continued rates of consumption, necessitating a shift in consumer attitude and mindset. Rising temperatures, loss of habitat and species, polluted oceans, dirty drinking water… the list goes on. There is an interconnectedness between what we buy and the damage that society as a whole may sustain.
This awareness is making consumers more mindful of how companies behave. Younger adults are quick to identify governance issues and seek more transparency on origin of goods. They are also aware of the power of collective action. Social media is a valuable tool that enables consumers to decry companies with ethical standards that compromise expectations.
Increasingly Indian consumers are adopting a ‘conscious spending’ attitude. Conscious consumption stresses the avoidance of needless waste or goods that provide no utility, as much as respecting the need for purchases that offer genuine value. Although this is an awakening born in the West, the conscious consumer is not confined there. It is just that the West has had a head start in industrializing and has had more time to legislate business and educate its consumers.
Conscious consumption stands in proximity to conspicuous consumption. It does not say that the latter is bad or irresponsible – capitalism itself is not a foe – but it does ask that we try harder.
Indian conscious consumption trends
In India, conscious consumption trends are evident in the areas of emission-friendly transportation, resource efficiency, replacement of non-bio degradables, fashion and luxury, wellness and nature conservation.
In industrial consumption, gas is replacing coal for firing kilns. With the government’s encouragement to the electric vehicles segment, OEMs and auto ancillary companies are gearing up towards larger EV manufacturing, while on the other hand, carpooling services have become a preferred mode of transport replacing car usage to a noticeable extent. This new consciousness is also affecting how we work and travel. Large corporates are adopting the more judicious mode of communication with the use of video conferencing across cities and countries reducing air travel time and costs. Even the UHNI segment has been observed to be adopting a more conscious approach, not preferring to hire private jets and yachts for single-use travel.
With India’s adoption of co-working spaces, consumers today prefer to utilise resources efficiently.
They offer work-life balance, cost effectiveness, greater efficiencies and convenience to employees, corporates and startups.
Within the luxury and fashion industries, UHNIs are now buying used or pre-loved luxury goods and the growing proclivity has spawned some organised platforms to facilitate the circular economy. Environment-consciousness and eco-friendliness of brands were ranked as the highest parameter influencing shoppers (67%), followed by natural and organic ingredients (66% and 65%, respectively), according to the International Lifestyles Survey 2019 by Euromonitor. Studies have revealed that increasingly consumers are looking to buy brands that offer great quality at the right price and fit with their values. Today, brands that address consumer needs and aspirations with a larger purpose at heart find greater brand loyalty. Some schools have discouraged and some banned packaged food within premises, while the growing online advocacies on healthy foods have increased awareness of healthy eating like gluten free diets and veganism.
A holistic approach
Conscious consumption is not just about what we wear. It is all encompassing: where we live, how we move, the food and drink we consume, how its ingredients have been grown, processed, and packaged, and what happens to the leftovers when we are done consuming. This thinking has caught on with fast-food behemoths as much as fine dining; as the award-winning chef Mauro Colagreco told us: “We must rethink the concept of expensive or cheap. Behind a cheap meal we can find a huge cost for the planet in terms of the resources needed for this product to arrive on our plate.” For him, the era of indulgence is over when it comes to unsustainable ingredients. He is a firm believer in the notion that chefs around the world should develop their kitchens in greater dialogue with the region and local producers.
Responsible investing is on the rise
After consumers have made strides in choosing goods and services that are less damaging to other humans and the environment, it is not surprising that this attitude extends to their financial investment, activities and focus on their investment portfolios. In an interconnected, global socio-economic environment, it is the role of the financial services industry to give their clients the means to invest in sustainability.
Rather than a moral stance, responsible investment is a rational and deliberate decision by companies, while allocating capital, to not just focus on the bottom line but also uphold best practices across a host of environmental, social and governmental (ESG) factors. The UN Principles of Responsible Investment has almost 2,500 signatories to date, representing over $70 trillion in assets under management. Their goal as financial investors should be to not only understand which corporate practices today can put future earnings at risk, but also to allocate capital where change towards more sustainability is visible.
Being a responsible investor or a conscious consumer does not decry capitalism, but is about making informed choices, i.e., impact and green investing. And as corporate citizens or participants in a connected, global and futuristic world, financial enterprises can create greater value by giving their customers the clarity and transparency needed to make those choices wisely and, well, consciously.
The Julius Baer Global Wealth and Lifestyle Report examines consumer behaviour and global price trends of premium goods and services in order to gain a better understanding of the world of luxury.
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