Indian consumers willing to pay more for ethically produced goods, OpenText Survey

New research from OpenText has revealed that consumers place such value on buying from ethical brands that 94% are willing to pay more if they can be sure a product has been ethically sourced or produced. Almost two thirds (65%) are willing to pay a premium of more than 25% for that product while 35% are happy to pay 50% more. The survey also shows that close to a third (29%) of Indian consumers would never buy from a brand again if it was accused of working with unethical suppliers. Instead, they would look to find an alternative brand that engages in responsible sourcing.

The new data – from a survey of 6,000 Indian respondents – highlights the importance for brands in proactively ensuring all suppliers in their supply chain operate ethically. The poll considered the extent to which environmentally sustainable and socially responsible business practices matter to the Indian public and influence their purchasing behaviour.

The business case for ethical supply chains
Purchasing ethically sourced or produced items matters to 93% of Indian consumers while half (51%) judge a brand based on not just its actions but the actions of its suppliers as well. In fact, the pandemic has made consumers more mindful of the impact of their purchases: post-pandemic, 95% of consumers plan to prioritise buying from companies that make it clear that they have ethical sourcing strategies in place. This compares with 91% who said that pre-pandemic, they prioritised buying from companies with such strategies in place.

The survey findings also reveal that an overwhelming proportion (92%) of Indian consumers are even willing to compromise convenience, such as accepting a slower delivery, if they can be sure that an item has been ethically sourced or produced. A little less than half (45%) agree they would only opt for this sometimes or for certain items, but almost half (47%) are always willing to make this compromise.

“Creating an ethical supply chain requires having visibility into every supplier,” said Lou Blatt, senior vice president and CMO at OpenText. “The ethically minded consumer is exercising more control over their buying power. Brands can no longer claim they act responsibly if they have no visibility into their operations or those of their suppliers.”

Rising demand for ethical business principles
When shopping online, 76% of Indian consumers now make a conscious effort to purchase locally sourced or produced items to support local businesses and reduce their carbon footprint.

Almost four fifths (79%) of Indian consumers agree businesses have a responsibility to ensure their suppliers abide by an ethical code. Nearly three quarters (74%) believe that businesses that cannot monitor where their goods have come from and don’t know if suppliers are sourcing goods ethically, now need to rethink their supply chain.

Increased focus on transparency and accountability
A majority (80%) of Indian consumers agree that government should introduce regulation that holds businesses more accountable for responsible sourcing. An even bigger majority (90%) also think online retailers should clearly mark whether or not products are ethically sourced where they can.

Nine in ten (91%) respondents admit that knowing where a product has originated from or where parts are sourced is important to their buying decision. For 46%, this information always impacts their buying decision.

“To build an ethical supply chain, an organisation must have access to information that it can trust,” commented George Harb, Regional Vice President, Business Ecosystems, APAC, OpenText. “Having insight into every part of the supply chain not only helps companies live up to customer expectations on ethical business processes, but also allows them to demonstrate how they are doing so. By deploying a single, unified, cloud-based integration platform, organisations can digitise the flow of data and transactions between everyone in the supply chain for complete visibility and transparency.”

“Ultimately, organisations also need to ensure that once they have visibility into their suppliers, they only work with those which can demonstrate their ethical qualifications, performance and compliance,” Harb concluded. “This is vital to meeting rising customer demand for ethical and responsible sourcing strategies.”