Green Is the New Rainbow

Though the global village is still suffering from the economic crisis and seeking for innovative solutions to recover, an emerging trend is becoming more and more established and leveraged as opportunities for future growth. Green is not only the new black any more. It will be the rainbow when the sun arises after the storm.

2009-2010 will be critical years for green product development, and this represents a highly compelling opportunity for the leading companies in China who want to invest in Green/Sustainability.

Over the last few years, sustainability has been a popular topic in the media and a talking point of many companies that want to position themselves as responsible. However, it is only more recently that we're seeing it become a core component of how companies position their value. It is no longer just a product features, performance, and design that define the concept of quality for a consumer. Energy efficiency, responsible manufacturing, and lifecycle management are becoming equally important ingredients.

Wal-Mart famously said in October 2008 if suppliers did not comply with its new environmentally responsible policy: “we will move our business.”

Recently, Apple announced that their latest MacBook notebook line would be the first example of their new green product strategy. Apple is a trend-setter as a premium brand in several product categories. We fully expect this announcement to impact other premium brands in China that play in those same categories and in other categories with companies looking for differentiated brand position.

This is where we see an opportunity for leading Chinese companies, normally not perceived as premium brands (which requires significant time and investment), but as high-quality, environmentally responsible, value-for-money brands. Over the next 12 months, premium brands in many categories will be launching green product lines. Over the following 12 months, mid-tier brands will follow. This means there is a window in the 12-18 month timeframe to be a first-mover with green products that are also reasonably priced. We strongly believe this represents a significant opportunity for Chinese 1st tiers to capitalize on.