Episode 12 - Sustainability and Marketing in China

We delve into the complex landscape of sustainability marketing in China for 2023. Drawing from expert insights presented at Cannes Lions, we dissect the Chinese consumer's growing affinity for sustainable practices and products. We examine the transformative role of technology—such as AI and big data—in driving sustainable initiatives. Case studies from Adidas and Alibaba shed light on how brands successfully blend business objectives with environmental responsibility. If you're intrigued by China's burgeoning green market, this episode is a must-listen. Available on all major platforms, subscribe now to stay abreast of the intersection of sustainability and marketing in China.

Transcript

[00:00:00] Hey, I'm Jimmy Robinson, and you're listening to Insight China, a China marketing podcast brought to you by Ping Pong Digital. In each episode of Insight China, we give you our deep dive insights into a different area of the Chinese market, followed by a quick lowdown on the biggest Chinese news stories you need to know.

[00:00:29] Catch new episodes on all major podcast platforms every month. In today's episode. We're going to unravel the mystery behind sustainable marketing in China in 2023. We recently gave a talk on this very topic at Cannes Lions, where we were joined by sustainability experts. And it became very apparent to us that China is still a mystery to most in the sustainability movement.

[00:01:00] To shed light on this, we'll be covering three key areas. Understanding the Chinese consumer. And their sustainability preferences, the role of technology in sustainability marketing, and case studies of successful sustainability marketing campaigns in China.

[00:01:23] Our business development manager, Jess Mun, Recently spoke about sustainability in China at CanLions and we'll be sharing some of her talk in today's episode. To kick things off, let's understand the Chinese consumer and their sustainability preferences. And who better to do this than Jess Men herself?

[00:01:45] And fortunately, we have a recording of her very talk from Cannes Lions. Hey, Future Jimmy here. We were also joined on our panel discussion by Aisling Conlon from UKAEG, who chaired the panel [00:02:00] discussion, and Claire Gleason Landry from Goodloop. So here's what Jess said in Cannes. According to all the conversations I've had at Cannes this year, I've realised no one knows what China's doing.

[00:02:12] Um, so I'm just going to throw out some stats and facts on what is the Chinese government trying to achieve. Um, so firstly, on the carbon neutral side, um, They're looking to buy carbon by 2060, and it's slightly slow compared to how it is in Europe, uh, we're applying. Um, and then when it comes to green technology, we've seen a surge for the past several years.

[00:02:38] China has always been the leader of any sort of technology, I have to say. Um, but we're expecting a, um, staggering value of the industry to become about 16. 7 billion US dollars by 2027. Um, and another stats I'll throw at you as well is that, um, over 800  large Chinese companies has made commendable commitment towards being carbon neutral by 2050.

[00:03:07] So, you can see the whole country is having a lot of targets, um, a lot of big movements on the sustainability. But when it comes to the consumer side, Like myself, um, the Gen Y and the Gen Z is very much leading the whole influence of sustainability because, um, a lot of them has been exposed, um, has lived overseas before for their study, for their work, like myself, I'm originally from China, I've lived in the UK for eight years now, um, and I know everything about protecting the planet, the impact of, um, climate change, so, um, the exposure of global, um, Perspectives really shape the, my awareness of how sustainability is, um, in the world.

[00:03:56] So, it does push me towards more sustainable practices, and I also want to share this and influence this on Chinese social platforms as well, like Nature Red Bull, WeChat, Weibo. Um, and I just came back from China last week after three years and a half not being back. Um, and, uh, you might be wondering why I'm wearing a dim sum t shirt today.

[00:04:22] Um, so this is actually the first sustainable fashion piece I've ever purchased from China. So the differences I've seen this year going back is that... Gen Z cares about sustainability. This is the purchase in Chengdu, the city of pandas. Um, and it's a Gen Z shopping center called Cosmo, and it's right in the middle of the shopping center, having a pop up stand just to promote the sustainable brand.

[00:04:52] Um, and then I've also seen a huge trend and popularity on second hand purchase, um, vintage stores, especially second hand luxury stores. I should probably be aware that China is the biggest pursued market for luxury goods. Um, so yeah, we young people are very, obviously, to be sustainable, to purchase, um, second hand ethical products now.

[00:05:18] Um, so, I'm really happy that this has all changed since last time I went back into filming nightly. And just, if I take it, thinking about Bud Light, for example, it's like, what? I mean, the fact that marketing studies are still easy in China, and to extend the same as... to encourage you to buy a birthday new T shirt.

[00:05:36] Yeah, so, um, we've actually uncovered some really interesting findings when it comes to what would actually influence, what kind of marketing strategy would actually influence Chinese audience. Um, sustainability, the keyboard itself, it's not the key drive. You need to relate it to their well being, their physical health, um, about themselves, and their families, [00:06:00] and their future generations.

[00:06:02] Because... The impact of climate change of, um, all the industrial, everything is being produced in China. It's visible, the pollution is visible in Chinese people's everyday life. It's in the air, in the water they drink, it's in the soil that make their food. So, um, it's really about creating an environment, and then forging that emotional communication and connection with the Chinese audience.

[00:06:30] Um, you need to also think about the fact that, Each generation, each age group in China is very different. Uh, like my parents, they have no idea about sustainability. They're about 55. Um, and here I am talking about sustainability. You can see here the pan. So, um, the strategy needs to be really targeted in which you understand the differences between each generation as well.

[00:06:54] Um, and then China is a really large, diverse, consumer landscape. Um, everyone, everyone is a bit confused when it comes to who is this and things. The change group, how many tiers, you know, million tiers of cities in China. So, um, that's why you need to understand when it comes to sustainability and consumption, you need to understand their behavior.

[00:07:17] Um, so we actually, um, launched our oldest social listening tool called People Analytics. Um, so that helps you to scrape data of Chinese social platforms explicitly, um, and we can understand what the, the actions and the thoughts of Chinese audience when it comes to sustainable consumption. Um, this has really helped us with, uh, with shaking our strategy and upgrading our offering for our clients as well when it comes to sending out sustainable messaging.

[00:07:47] I decided to listen to both of you, um, which you say the U. S. would be for China. He's doing it for now for me.

[00:07:58] It's a risky E. Well, you know what? Because I would have come to this talk thinking that the U. S. is further ahead. But actually, it sounds like to me that you're further ahead. I guess it depends on what lens you're looking at things through, right? Yeah. Yeah. I think, um, I think U. S. brands are probably, like, my knowledge of China is absolutely nil.

[00:08:23] Like, uh, Sadly, one of the few Asian countries that I haven't been to. I think possibly because I'm just overwhelmed by the scale, um, of it all. You should go check out Panda's. Yeah, well, everyone should go do that. Um, I think, uh, I think it's really hard to call, right? I think the difficulty for China is, and everyone whacks them with sticks, like, you're a massive pollutant.

[00:08:47] It's because all of our Western countries have exported everything and then outsourced. Industries that sustained our countries. Like, you only have to, I promise I wasn't going to talk about the miners, but for some reason I quite often come back to the 1980s. Um, we stopped, we shut down, like, we got rid of a huge industry in the UK that employed a huge amount of people, right?

[00:09:12] The government recently has been trying to resurrect that and it's got quiet again, thank God. But, um, because why would you start investing back in old fossil fuel technology? There's so much more innovation in the UK around the penguin tea, so that's weird. But, China gets so much stick and yet it's, we've just exported our public.

[00:09:31] Every single Western country has just exported them. Um, and in the same way that we, you know, when we recycle things quite often and just get sent in shipping containers over to China, like it's insane. So I feel bad for China having not ever been there. Um, I feel bad that that's the, the, the everyday reality for people where they're chunking on the very physical effects of what's happening, right?

[00:10:00] You can get even deeper this with regards to advertising. Advertising is designed to drive more consumerism, right? And, and, and it gets quite philosophical in that space. Um, but if you're encouraging people to make more meaningful purchases that they don't have to purchase as often because they're really good quality, then that's only just going to be a whiz, right?

[00:10:19] But if you take, so you mentioned advertising and you've had a set that when we are new, people sort of look and they think, is it really advertising's problem? But I guess Maybe just like what role do you see the industry based in this, Adam, to like, like it's to help it at all. Yeah, I think for China specifically, it's at this stage, it's really about race with awareness and about education.

[00:10:44] Because even though a lot of the younger generation is aware of the sustainability term and the climate change issues, um, there is... Still, my parents generation that needs to be educated, and they are constantly on social media, like the speaker earlier was saying, TikTok, Chinese version TikTok in China is massive.

[00:11:06] It's five, I would say three to five years old developed, reach to a lot wider audience compared to how it is in the West. Um, so how, what was the way to influence my parents generation? It's advertised as a new buoyancy on the Chinese TikTok. Surprisingly. Um, and then I think for companies and their marketers, um, you really should start implementing a sustainability, um, message in your day to day organic presence on Chinese platforms.

[00:11:40] So there's also in your campaigns, your, um, key message and, um, just really time to express yourself that, um, you know, I care about you, your family, your health. So, um. Um, I mean, probably anywhere in the world, really, there's still a gap between the intention about sustainability and the actual behavior. So, for, for China, um, when it comes to marketing, you should really try to address the disparity of that.

[00:12:11] Um, as a marketer, you know, run the effective marketing campaigns that's particular to the Chinese audience. Um, and then... There's loads of different channels that you can do as well, um, on social media, influencer marketing, which is what we call key LPME leaders, the KOLs, if you've heard of the term. Um, they are the leading roles of, um, educating people, um, and pushing up sustainability messages.

[00:12:39] So, um, yeah, there's many stuff that you can do, um, everything that is about advertising. Educating people about sustainability. To add to that, I think a really good example of this, and bear with me, um, Remember when cigarette advertising was all over everything, all of the time? So, Formula One, uh, magazines, I vividly remember Silk Cut adverts in magazines when I was younger.

[00:13:05] When that, when that was outlawed, when crackdown happened on smoking advertising, cigarette advertising, Surprisingly, not. The volume of people dying from lung cancer dropped. Um, and that's the influence that the advertising industry has. There's an opportunity here to demonstrate best practice for how to produce really good quality creatives.

[00:13:31] There's an organization called Ad Green. Uh, they have a carbon calculator for when you're on set and you're producing that content. Um, and then there are organizations that will help you measure, um, what you then do with those assets that you've, you know, and will say, oh, you want to do a nice swimwear sheet?

[00:13:50] Gods sure nearest desert. You don't need to go to South Africa. Um, employ the local crews right's. You not bringing these equipment with you. That's one area, and that could be taken care of over there. And I think a lot of agencies doing a really good job in that space have asked to do an incredible job around there.

[00:14:06] They're a big corporation, they have these guiding principles, saying that's a good loop, where you balance profit and purpose. And it's a way of showing that you can still make money by doing the right thing, right, and doing good. Doing good equals more profit. Then you have organizations such as us, and there are quite a few players in this market as well, that are offering that insight.

[00:14:27] And then how to do something about it. And so when you layer the levels of creativity with the incredible innovation in terms of advertising distribution, that's what we forget about all the time, right? And everyone's like, why are there so many tech companies here? And like, it's the, like, when my friends asked that, they're like, I thought Canlines was all about good adverts.

[00:14:45] And we're like, yeah, it's about good adverts. But it's also about how those adverts get seen. So, final question. Um, because we've kind of, I'm keen to know, a lot of people say there's a danger to our market, and I'd love to get. So I'm really keen to know what brands in the market are doing it well. Who's, who's, who's, who's capturing your parents attention on TikTok?

[00:15:05] I think they're nine. Um, L'Oreal has done a really good job in China for way too sustainability. Um, yeah, as far as I'm concerned. How about L'Oreal look? But isn't that interesting that you're gonna both get the same brand. And so she, L'Oreal must be making these all around the world. Yeah, yeah, I'll be sure.

[00:15:23] Um, yeah, so they've done loads of, um, activations in China, online, offline, Um, there was one campaign last year. It was about makeup for the planet. So they collaborated with nine other large companies, globally, um, that have a huge presence in China, like McDonald's, Spill It, um, Penn's, just to name a few. Um, so they all joined together for this initiative.

[00:15:47] Um, and they collaborated with, um, Um, 20 huge celebrities plus large influencers, um, the power of working with those, um, bigger celebrities and influencers is that they already have a trust, um, and a connection with their fans and their followers. Um, so they're kind of sharing this in the personal commitment way, um, to amplify the campaign message at the same time reach out to a wider audience.

[00:16:19] Um, and the response to this campaign was super positive. No one was asking anything about why I'm talking about biodiversity and the beauty industry and sustainability. And, and, and then people instead, um, have bigger conversations on social media to hear about, Oh, this is a new idea. I'm very interested.

[00:16:38] And they involve, um, elements like, um, engine, um, uh, plant as well, which is very, to make the whole campaign really interactive. Uh, which builds a community, um, in a way, and then makes all the audience feel like they really participated in Builder's Campaign. So they did really well, and they did lots of offline activations, pop ups,  uh, VR stuff, and the time, like, the interesting thing with L'Oreal as well is that they're doing it in every element.

[00:17:10] To engage effectively with the Chinese market in this space, it is essential to understand its unique consumer behavior towards sustainability. And that when we talk about Chinese consumers in this space, we once again can't say that one communications model or strategy will work for all audiences in China.

[00:17:33] The younger generation is showing an increased interest in sustainable products and also in sustainable practices. A recent report revealed that more than 60% of Chinese Millennials are willing to pay more for sustainable products. And another study conducted by Nielsen found that 9 out of 10 Chinese Millennials are willing to pay more for sustainable [00:18:00] products.

[00:18:00] Both of these highlight a trend that sustainability now forms a part of the decision making process of Chinese consumers. The rise of ethical consumerism in China is primarily driven by concerns about health and safety, environmental issues, and the desire for quality and longevity in products. To cater to this demand, businesses need to communicate the sustainability benefits of their products in a way that aligns with these consumer values.

[00:18:33] It's not just about being green, it's about delivering value to consumers in a responsible way, on a platform that they will resonate with. But what about the role of technology in sustainability marketing? That's coming up.

[00:18:59]  Technology plays a vital role in driving sustainability marketing in China. Advanced technologies such as AI, Big data and 5G are transforming how businesses can connect with consumers and promote and use their sustainable products and platforms. We've mentioned previously about our own in house AI tools for social listening and analysing.

[00:19:23] A tool that has grown from strength to strength over the past few months. Big data is allowing companies to gain insights into the effectiveness of their sustainability initiatives and adjust their strategies accordingly. Furthermore, digital platforms are a popular choice for sustainability marketing in China.

[00:19:44] Social media channels such as WeChat and Douyin have become avenues for businesses to connect directly with their consumers and share their sustainability stories. And it's these larger tech companies that have begun to recognize their own roles in sustainability. Douyin just recently launched several campaigns, including the hashtag green challenge, which encourages users to share videos of themselves doing environmentally friendly activities, such as recycling.

[00:20:18] using reusable bags and conserving energy and implemented energy efficient servers and data centers themselves. And anybody who embarked on this hashtag green challenge started to see a bump in their numbers as well. So influencers in particular were being rewarded for participating in this green challenge.

[00:20:40] You may very well be saying to yourself, Jimmy, this sounds fantastic, but are there any successful case studies of sustainability marketing campaigns in China? Well, let me tell you about a few in just a moment.

[00:20:58] Let's look at some success stories of sustainability marketing in China. First, we have Adidas. The brand launched a successful campaign promoting its line of shoes that were made from ocean plastic. The campaign involved a mix of influencer marketing, social media engagement, and of course, creative storytelling that highlighted both the product's style and, importantly, its positive environmental impact that received a huge amount of praise and sales boosts in China.

[00:21:32] Another great example is Alibaba's Green Box initiative. Alibaba implemented a reusable packaging program that resulted in 10 million green boxes used for delivery in 2020, saving a substantial amount of packaging waste. They promoted this initiative across their platforms, educating consumers about the importance of reducing waste.

[00:21:59] Not only that, but Alibaba recently partnered with L'Oreal to launch a green store on Timor and signed a deal that is focused on establishing green and low carbon standards. Alibaba's CEO said sustainability development has become a consensus and commitment across national borders. It is also the common pursuit of every company with a sense of social responsibility.

[00:22:28] And we're seeing this even with local Chinese brands as well who are ditching their unnecessary plastic waste. There are still ways to go here, but brands such as Xichar, a super popular bubble tea brand in China, started to get rid and phase out their plastic straws in favour of more environmentally friendly options.

[00:22:51] These cases illustrate how brands are effectively combining sustainability and marketing to create a positive impact on both the environment and their bottom line. And customers are going to increasingly demand this in China. 83% of Chinese consumers shared that the pandemic had influenced them to make greener purchases versus just 64% globally.

[00:23:18] There are, of course, challenges that companies can face when trying to be greener in China. Donations are not commonplace in China, and usually when donations do happen, they're more event specific, meaning it's not an everyday practice that consumers are used to. So you can't just ask consumers to round up their purchase to save the oceans.

[00:23:43] Not only this, But even if you do find a partner in China to implement such a scheme, well, some green and sustainable charities have come under fire for not exactly practicing what they preach. And such associations with these kinds of  NGOs, or maybe we should say not so legit NGOs, can reflect pretty badly on brands.

[00:24:08] There isn't an easy solution to just tag on a green initiative in China. It's something that brands need to implement themselves into their products and logistics and the way in which they just operate in China. And then they need to take on the responsibility to educate consumers. about these green sustainable practices.

[00:24:37] Time to share a quick company update and it's great news. Our team is now able to scrape data from RED, a social media platform in China. This will give us even more valuable insights into consumer behavior and market trends in this important market. We're excited to see the impact that this will have on our business.

[00:25:02] And how our clients will be able to use these additional insights to better their offering to Chinese customers. Next up, some Chinese news stories that you need to know about.

[00:25:22] Tech giant Baidu on Wednesday received approval by Chinese authorities to launch its artificial intelligence, Ernie Bot, to the general public, starting August 31st. first. Now, you may have remembered that we spoke about this a couple of episodes ago. So if you've not had a chance to listen to our episode on AI, I would highly recommend that you go back and listen to that episode.

[00:25:48] As investment has poured into China's generative AI scene and it's firms such as Baidu and Alibaba that have launched dozens of different AI models. but had to  delay the rollout of these chatbots to the public until Beijing had finalized the rules for the technology and approved their products. But it looks like this is now happening.

[00:26:12] China has also retaliated against Japan's decision to release treated nuclear water from the Fukushima plant into the Pacific Ocean by banning all imports of Japanese seafood. China's claimed the move was based on safety concerns but this is having a ripple effect on how Chinese consumers are viewing other Japanese brands right now.

[00:26:44] That brings us to the end of this episode. We have seen sustainability marketing in China requires a deep understanding of how Chinese consumers want this to be communicated to them and what their expectations are when it [comes to how brands will implement these practices into their everyday workings.

[00:27:05] The intelligent use of technology and the power of compelling storytelling will be vital in this area going forward. Don't forget to like and subscribe so that you can keep up to date with the latest happenings that's going on in China. Until then, stay green! Thank you for tuning in to our podcast today.

[00:27:29] A special thanks to zhun for his music, and of course to Jess Men for her contributed audio to this podcast.[00:28:00]