Brands Ignoring Ethical Consumerism Face Sales Risk, Says GlobalData

By Steve Wynne-Jones
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Brands Ignoring Ethical Consumerism Face Sales Risk, Says GlobalData

With firms being held to an ever-higher level of accountability when it comes to positions on social issues such as human and animal welfare, fair trade, and health, brands that fail to take proactive measures to address these may risk losing sales, according to GlobalData.

Given increased focus around activism, brands that don't embrace ethical consumerism risk being boycotted, Meenakshi Haran, lead consumer analyst at GlobalData, says, noting that consumers are "increasingly making decisions based on responsibility towards ethical and social issues, driving the need for companies and brands to continually set measures to create and develop genuinely responsible products and services.

"As many as 31% of Middle East & African consumers and 29% of Asian consumers admitted that they find it essential for products to be ethical or support social causes.”

Israel-Palestine Conflict

The current Israel-Palestine conflict, for example, has led to pushback on certain brands in Muslim-majority nations in Southeast Asia as well as across West Asia, GlobalData research has shown.

Unilever, for example, reported a 15% decrease in sales in Indonesia in its fourth quarter, while McDonald's has held back on expanding in the Middle East.


Consumer Priorities

“By being heavily influenced to buy a product and its attributes, consumers are sending a clear message to manufacturers and producers about what they are looking for and what their priorities look like," added Isha Varma, Middle East business development manager at GlobalData.

Varma added that the Middle East, given its high spending ability, and Asia, with its 'surging' population represent huge growth opportunities for brands – however those that operate in these markets need to send a "clear and transparent message about their commitment to ethical and social responsibility to mitigate any loss of reputation and revenues.

“Amid the evolving geopolitical landscape, brands are faced with tough market conditions, especially around nuanced social and economic issues, which threaten their ability to do business if left unaddressed."

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