A consumer tsunami has started to roil Thai markets and businesses better be savvy if they want to ride the tide to the promised land of sustainable spreadsheets.
Fortunately, you don’t have to figure everything out yourself. Helping you do that is the mission of Mintel, world-leading market intelligence specialists in what consumers want and why. The venerable yet cutting-edge company’s analysis of consumers, markets, product innovation and competitive landscapes has for 50 years been providing precious perspectives into global and local economies. And its predictive analytics and penetrating recommendations that enable clients to make better business decisions faster and grow more steadily are in much demand.
Currently holding flagship status in its product portfolio, the Mintel Consulting Sustainability Barometer (MCSB) features trending data and insights into consumers’ sustainability attitudes and behaviours across 16 countries. In its executive summary (available for free download here) it notes that current tumult – caused by a disappointing COP26, conflict in Ukraine, broken supply chains, food shortages and record-breaking heat waves, among other things, makes transitioning to clean energy and resilient, responsibly-sourced resources more crucial than ever for delivering long-term return on investment, not to mention the stability, security and well-being of the planet.
“We’re doing a lot of research and work around this area now because there's tremendous demand for it,” explains Richard Cope, Senior Trends Consultant, Mintel Consulting, matter-of-factly. A graduate of the Cambridge Institute for Sustainability Leadership, he was instrumental in designing the survey.
“While in Thailand ‘woke’ consumers may still be in a minority, those who have had their eyes opened are having an impact that is growing sharply and businesses are taking it seriously,” he relays by Zoom from Winchester, England. “They’re either being compelled by regulation to act or realising that their competitors are moving in this space and that they’re potentially losing ground against them.”
Targeting what consumers want and why, the latest MCSB found that 43% of Thai consumers rate air quality a top three environmental concern, followed by climate change (42%) and deforestation (28%). 72% say local extreme weather events spur them into whatever action is available to them.
“Big proportions of Thai consumers think their country is not only vulnerable to climate change but also contributes to it,” Richard adds. Indeed, Thailand ranks around 10th for sending the most plastic into the ocean, as recorded in the World Bank’s market study for Thailand, “Plastics Circularity Opportunities and Barriers, 2020”. To be fair, though, the World Resources Institute says Thailand’s greenhouse gas emissions contribute a mere 0.88% to the global total. On that score, the land of smiles is indeed more victim than perpetrator but proceeding out of step with the near universal net zero drive is hardly in anybody’s interests.
This being the second MCSB including Thailand, dot plotting is throwing up some interesting additional insights. As environmental concerns escalate, consumer engagement in sustainability is evidently deepening.
“There’s an awareness that Thailand is a victim of emissions from massive industrial powers like the United States, Europe, China, Brazil. Nevertheless, 44%, up from 40%, say that this country is also contributing to climate change.” Paradoxically, he points out, only 39% of Americans admit that.
As environmental concerns escalate, the number of Thai consumers who believe we still have time to save the planet if we act now is declining according to the barometer, dropping from 62% to 58% from 2021 to 2022.
An overwhelming 72% of Thais agree that extreme weather events such as flooding and heatwaves encourage them to personally do more activities to protect the environment. And they do take it seriously: 45% say they have researched their annual carbon footprint with an online calculator or app. Moreover, 76% say doing things that benefit the environment makes them happier.
Simple and frugal actions dominate the sustainable behaviours: 66% of respondents cite simply recycling packaging and mitigating waste among their top contributions. They also buy fewer new clothes (49%) and products certified as less harmful to the environment (33%), and bicycle more (40%).
Asked which solutions they perceive to have a significant positive impact on the environment, Thai consumers are supportive of forestation, conservation and renewable energy projects. 41% think that consumers themselves are most responsible for boosting renewable energy while only 28% associate it with the government. 64% indicated that they have energy-efficient certified appliances such as washing machines, refrigerators and air conditioners in the home.
“The radical changes we’re seeing have given consumers a jarring reality check, hurting their health and wallets and activating them in the sustainability process. And as it becomes a reality for them, so it becomes important for businesses.”
From data to direction
Mintel’s expert marketscapers translate all the consumers’ sustainability attitudes, behaviours and purchase preference insights into recommendations for “best-in-class corporate and brand innovations, communications and campaigns.”
“It tells us that companies need to assert and clearly communicate the truly impactful actions they are taking to reduce emissions rather than just dipping their toes into populist plastic-free campaigns and greenwashing.”
“The more information we get, the more we can really help businesses trying to be more responsible in their product or services positioning so that they closely match what consumers’ priorities are and communicate in a way people trust and buy into.”
“We're over-consuming and we're consuming unsustainably. Yes, governments have the power to regulate and legislate so companies take action but to a great degree it really hinges on consumers.”
Richard cites the International Energy Association’s finding that 59% of all the emissions reductions the world needs to make are related to what consumers choose to do and buy. “For them, it’s not how sustainable the packaging is but how well it does its job.”
Mintel’s market research closely tracks what consumer-facing businesses such as fast-moving consumer goods companies (FMCG) are putting into the market, the claims they make and how they perform. A subscription service provides access to a data and content platform arranged along sector-specific lines. Meanwhile, bespoke consulting projects are based on existing research, new research and pilot projects.
“Our insights and data help ensure that a more responsible version of a product really lands with consumers, competes with other products and succeeds.”
“Responsible products and services need to be positioned as being better for your health for consumers and cheaper to create for producers. If you don't make sure your supply chain is sustainable and reuse waste, you're just throwing away money. Moreover, you're increasingly likely to face regulatory costs.”
Sticks and carrots
“For people to embrace more responsible behaviours, there needs to be a reason to do more than just helping the environment or society. When the environment becomes a public health issue for consumers and a finance issue for businesses, that’s when the reality of everyone’s predicament kicks in.”
Thais are very conscious of the extreme weather events they're facing: 72% say they’re encouraging them to do more activities that benefit the environment. Only 38% think their behaviour can make a positive difference and they know we’re running out of time. Asked if they agree that we can still save the planet, there are fewer affirmatives this time around, though they’re still in a majority (58%).
Other indications of Thailand’s emerging sustainability consciousness include 29% of Thai consumers having bought a used or repurposed technology product instead of a new one and 49% buying fewer new clothes. A third have bought products certified as benefiting the environment or being responsibly sourced by the Rainforest Alliance or Forest Stewardship Council and so on.
Trying to fool them is doomed to backfire. “There've been so many greenwashing campaigns that consumers don't necessarily trust believe companies when they say something is more responsible. They want simple, digestible data about the actual benefit of buying that product. Does it save five litres of water compared to the standard product? How much less CO2 does it actually use?”
Labelling and colour coding are becoming popular and 42% of Thais say they would welcome the help in making informed purchase decisions. QR codes can be used to get across more information that can be browsed while shopping.
“Consumers in Thailand are increasingly expecting supermarkets and food manufacturers to be responsible because they’re seeing the climate problems, rising sea levels, poor air quality, municipal waste pollution. So, consumer-facing businesses need to be more responsible and partner with their customers on improving the situation.”
Can the companies still turn a nice profit? “We’re often asked ‘Can I make money on this? Can I charge a premium?’ Clearly you can create a boutique or niche brand if you do a good job but the financial argument for doing this is really that if you don't, you can very quickly fall behind your competitors. In the long term, consumers may not necessarily spend more on your products but they’ll be more loyal to you.”
“Supermarkets should do this to ensure a secure supply line so you’re not facing snags in your key input acquisitions due to drought or a power shortage because you’re over-reliant on a fossil fuel.”
“There’s also the spectre of legislation, more taxes and penalties, less access to capital and the evidence that if you don't act this way, your partners won’t work with you.”
To ease the transition, based on its extensive data, Mintel conducts customer-specific workshops to brainstorm ideas for new products and services. Energy providers get help to understand consumers’ energy use and attitudes. Corporates can find out how carbon offsetting can work for them and how consumers can be brought on board with financial inducements such as give-backs and relaxed instalment plans.
The challenges to businesses are daunting indeed but soundly researched help is at hand.