China Insights: Product-related health and safety as top CSR focus in China

Early February 2010, Tsinghua University and Ruder Finn Asia released some insightful data on CSR within the China market sphere by looking at Chinese consumers’ expectations and perceptions of CSR performance as well as the influence of CSR on consumer behavior.

3000 respondents were polled and two industries were covered for the first annual edition of this ‘CSR Index’, Fast Moving Consumer Goods (FMCG) and the automobile industry. These were not only obviously examined because of the traffic and volume each sector currently encompasses, but mostly because these two sectors came under very close scrutiny in China over the past few years: recent product safety and quality scandals (i.e. the melamine in milk scandal in 2008) sparked public outrage and profoundly affected China’s FMCG industry, while China’s auto industry became the leading automobile market in the world.

Here is a snapshot of the most interesting findings from the CSR Index:

• Product quality is the primary concern of Chinese consumers, followed by environmental protection (2^nd), management integrity (3^rd), philanthropy (4^th), and also intellectual property issues, fair competition, and least of all, employee rights and interests.

Given the recent food safety scandals in China, consumers are demanding healthy and safe products, first and foremost. While the presence of environmental protection in second position denotes greater environmental awareness, it also shows that Chinese consumers value products’ green credentials as guarantee of good quality and safety, the same way that management integrity appears obviously as a sub-set of quality, safety, and environmental concern. Overall, the weaker position of philanthropy or other non-product related issues such as employee rights, demonstrates the importance of the ‘me’ factor (consumers will mostly care about what can directly affect themselves and their own families), and that donations are clearly not enough, companies are expected to offer products that can be trusted.

• As Chinese consumers are calling for a trustable market environment, there is growing connection between the perceived CSR performance of companies and the purchase decisions of consumers, while the Index also confirms that the more educated a target market segment is, the more concern there is for CSR.

• Chinese corporations are widely seen as faring less well than foreign enterprises, which is according to Prof. Zhao Shuguang, head of the Tsinghua Media Survey Lab, due to foreign companies perceived advantages over domestic companies in terms of management, technology, capital and resource allocation. This again demonstrates that CSR in China should be incorporated into core  business practices in order to win consumers’ trust, rather than used as simple add-ons or donations/marketing campaigns.

Overall, some interesting findings, which show again that addressing local stakeholder concerns is of paramount importance when fine-tuning the local implementation of global CSR policies and strategies.

* I have been very quiet over the past month or so, due to a very busy workload, recent changes to my professional life, and in between, some nice holidays back home. I am now slowly getting back to blogging, and micro-blogging. I have missed it! Stay tuned.