Retailers urged to heed Gen Z sustainability call

KPMG says 79% of Zoomers will buy into brands whose values are aligned with theirs.

More than eight of nine (86%) Generation Z consumers in the Asia-Pacific region will pay a premium for brands that are socially responsible, according to KPMG International Ltd.

About half of them (49%) want companies to cut their waste through recycling, whilst 31% think they should use sustainable raw materials, Guillaume Sachet, a partner at KPMG in Singapore, told the recent Retail Asia Summit 2024, citing their August 2024 report.

Another 30% of Zoomers said brands should use eco-friendly packaging, Sachet said, adding that 79% will buy into brands whose values are aligned with theirs.

He added that having a climate action plan was important to 28% of Gen Zs, whilst 22% were concerned about the ethical treatment of workers and fair labour practices.

Sachet said 55% of Gen Zs — people born from 1997 to 2012 — ask “very interesting questions” about what they see online, and they make conclusions based on the very short insights they read on social media.

He added that Filipinos are the most likely of any markets in the region to support retailers and brands with sustainability commitments at 98%, with 56% willing to pay a 20% premium for such products.

“As generative artificial intelligence (genAI) gains traction, Gen Zs are looking for a more empathy-driven technology,” Sachet said.

The genAI market is projected to grow 48% annually to $1t by 2031, according to Stocklytics.

Sachet noted that whilst companies could incorporate a bit of emotional intelligence into AI, it would be hard for AI to become as empathetic as humans.

Moreover, 30% of Gen Zs in the region cited privacy as their primary concern about genAI. “The next one is the lack of accuracy or what we call AI hallucination, which leads to bias and discrimination.”

Sachet said companies should first define what business process they want to transform using genAI before deploying the system. “Technology is not always the answer to everything, but if companies utilise it responsibly, it will just give them a bit of a jumpstart.”

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