BEIJING: Corporate social responsibility is increasingly shaping the purchase decisions of wealthy consumers in China, according to a new study.
Ruder Finn Asia partnered with Albatross Global Solutions to survey 1,100 high net worth individuals with an average income of 250,000 yuan ($37k; €29k; £24k).
Some 68% of respondents said a brand's CSR credentials had an influence on whether they would consider buying it, a trend particularly pronounced among the most well-educated and richest shoppers.
By contrast, only 10% of those polled asserted that this issue had no impact on their habits, and 22% had no opinion either way.
"We expected CSR to be in the findings, but not that high," said Jean-Michel Dumont, chairman of Ruder Finn Asia.
However, while an interest in this area was widespread, Dumont reported that, unlike elsewhere, sustainability was far from a primary concern.
"Consumers of luxury goods do not expect the shops to be 100% carbon free, or have packaging made out of 100% recycled material," he said.
"It is a luxury good, and they expect the best. The focus for luxury goods is how you help the communities you do business with."
In fact, perceptions and values have been redefined by the earthquake in Sichuan two years ago, an event Dumont argued marked a “turning point for CSR in China, whichever sector you are in”.
Several domestic corporations gave millions of dollars to assist in the rescue and recovery efforts following on from the natural disaster, stimulating a change in preferences.
“Consumers are looking at what companies do beyond donations. They want to know how companies are getting the society involved,” Dumont said.
"In the aftermath of the earthquake, companies, especially luxury companies, were not seen as doing enough. This will have huge consequences for luxury brands over the next few years."
Despite this, multinationals have largely retained a pre-eminent status in the minds of Chinese customers, with 14 of the 15 best-regarded operators being based in Europe.
Louis Vuitton, Chanel and Gucci were perceived to be the most attractive labels, with Estee Lauder the sole US manufacturer held in a similarly high esteem.
“When you talk about luxury in China, you are talking about European brands,” said Dumont.
Some 40% of the panel intended to maintain expenditure levels in this category when compared with 2009, and a further 38% were planning to boost their outlay.
Nearly half of contributors said they would be willing to acquire high-end goods on the web, a figure that stood at 54% in Beijing and 47% in Shanghai.
Women proved more enthusiastic than men about embracing e-commerce, with total for these groups standing at 48% and 40% respectively.
Official websites were viewed as a useful source of information by 68% of participants, a better score than was recorded by print media.
Specialist fashion portals were also gaining ground, both as they provided access to trustworthy content and as they typically contained user-generated reviews.
"It is pleasing to see continued, healthy growth of the luxury market in terms of strong purchasing power, more mature consumer behaviour and consumers' greater in-depth understanding about the brands," said Christophe Caïs, executive director of Albatross Global Solutions.
Data sourced from Financial Times/Campaign China; additional content by Warc staff