Citizen consumers in emerging markets care more about social responsibility and ethical business than those in developed countries. Why the good gap?
Despite—or perhaps because of—the relative immaturity of their economies, people in China, Brazil, and India expect companies to do more good than people in the United States and Europe.
A new survey from Edelman Public Relations, a global communications agency, examines how consumers relate to companies and brands around social purpose, and how those relationships affect their decisions to purchase products and services.
The most interesting finding in the survey is that consumers in emerging markets—which it calls Rapid Growth Economies—are much more likely than their counterparts in Europe and the United States to trust socially responsible brands, switch their business to support them, and agree that social purpose and profit can go hand in hand.
To explain the purpose gap between emerging and established economies, I called up Carol Cone, who heads Edelman’s Business and Social purpose practice, and Robin Bruce, one of the practice’s supervisors. Both worked on the study and have a few hypotheses.
Older people aren’t as purposeful.
“The U.S. and Europe are aging rapidly,” Bruce says. An older workforce grew up at a time when business and social good weren’t seen as partners—indeed, social good and business often found themselves at loggerheads. Older people with fixed incomes may be less likely to “invest” in products or services that include social good and cost more as a result.
Consumers in emerging markets are closer to many of the problems that socially conscious companies tackle.
“A lot of the consumers who are entering the middle class in those economies… want to use that extra margin in their lives to benefit those causes that they’re more familiar with,” Cone says. “In Brazil, they’ve come out of the favelas, they know that education is a means to a better quality of life.”
Consumers in developed countries expect all companies to meet—and governments to enforce—high standards.
In emerging markets, these expectations are just setting in, giving purposeful companies an advantage among knowledgeable consumers. “The brand loyalty numbers have really plummeted in China, there have been a lot of really bad actors with companies treating their employees poorly or they’ve got ingredients in food that are just cutting corners,” Cone says; this state of affairs forces consumers to be extra conscious of purpose. “We’re not calling them consumers, we’re calling them citizen consumers, they’re utilizing social media and they’re really investigating what the company stands for.”
In developing countries, disillusionment with institutions is at an all-time high.
Maybe citizens in developed countries are looking more to themselves than companies for purpose. “In the U.S., for the first time ever, ‘people like me’ surpassed ‘government’ and ‘business’ [as sources of solutions] to address social issues,” Bruce says. It’s possible that people have lower expectations of business because they have lower expectations of most organizations. Instead, they are looking to themselves and their fellow citizens to make a difference.
Recessions make us selfish.
"The two numbers that were down were volunteering and donating, and we absolutely correlate them to the recession," Cone says. “People are still concerned, rightly so, about either getting a job or staying in a job, they just have less time and they have less money to give.” While the United States remains one of the wealthiest economies in the world, compared to pre-recession life or the current growth rates in the emerging market economies, some American consumers feel like their opportunities are diminishing more than they are expanding.
Some of these hypotheses reflect temporary conditions, others demographic reality, still others cultural influence. It’s reassuring to see that rising economies are equating social impact with good business, but disappointing to see countries that are trying to figure out the next step forward losing faith in business’ ability to affect change. One bright spot? The main factors influencing developed economies’ attitude toward purposeful business—the recession and an aging population—are expected to change in coming years. The bigger problem—the mistrust of major institutions in developed countries—remains a challenge to be solved.