KOTRA "Companies Entering European Consumer Market Must Focus on 'Value Consumption'"

Publication of 'Guide to Entering the European Consumer Goods Distribution Market'
Focus on Ethical Companies and Eco-Friendly Products Amid Changing Consumption Patterns

[Asia Economy Reporter Lee Hyeyoung] KOTRA announced on the 26th that it has recently published the ‘Guide to Entering the European Consumer Goods Distribution Market’ to help domestic companies reflect changing trends and carry out marketing as value consumption spreads in Europe.

Value consumption refers to a consumption pattern where consumers purchase products based on their own value judgments rather than corporate advertisements, brands, or prices. Recently, value consumption has become a hot topic in Europe, with ethical companies and eco-friendly products gaining attention.

KOTRA analyzed that European consumers tend to boldly purchase products made by socially responsible or eco-friendly companies even if the prices are high.

In particular, since the COVID-19 pandemic, awareness of climate change has heightened, and in Europe, ‘Greensumers’ who prioritize environmental protection have emerged as a major consumer group. Greensumer is a combination of ‘Green,’ symbolizing the environment, and ‘Consumer,’ referring to consumers who prefer eco-friendly products.

According to a survey conducted by global consulting firm Ernst & Young in May last year targeting 2,500 German consumers, 67% of respondents said they are willing to pay more for sustainable consumption. Reflecting this trend, products using solid shampoo without plastic packaging or containers made of glass, wood, or paper are gaining popularity in Europe.

Companies are also responding quickly to the spread of eco-friendly consumption. Global consumer goods companies such as Unilever, Henkel, and L’Or?al have announced plans to replace 25-50% of their product packaging with eco-friendly materials by 2025. French food companies plan to introduce the ‘Eco-Score’ system to label products with environmental scores. The Eco-Score system evaluates the environmental impact of the entire process from production to disposal of products.

The recent surge in online consumption is also one of the major changes in the European market. According to market research firm Euromonitor, although sales in the European consumer goods distribution market decreased by 1.4% last year compared to the previous year, online sales increased by 28%. The proportion of online sales in total sales also rose from 7% in 2016 to 12.8% last year.

As the online market rapidly grows, payment and delivery methods are diversifying. ‘Buy now, pay later’ services such as Klarna and Afterpay are gaining popularity in the Netherlands.

New delivery methods such as ‘Click and Collect,’ where customers pick up products at designated locations after online purchase, and ‘Curbside Pickup,’ where customers pick up online orders while sitting in their cars, are becoming established. Cooperation methods between online retailers and logistics companies are also evolving.

KOTRA advised Korean companies wishing to enter the European consumer goods distribution market to actively consider △ developing products targeting changes in local consumer behavior △ discovering omni-channel distribution networks that have both online malls and offline stores △ digital marketing using influencers and social media.

Lee Gilbeom, head of KOTRA’s Europe Regional Headquarters, said, “We hope the Guide to Entering the European Consumer Goods Distribution Market will serve as a guide for our companies entering the European market,” and added, “Next year, we will continue to support our companies’ entry into the European market through various support projects such as entering European distribution networks.”

The ‘Guide to Entering the European Consumer Goods Distribution Market’ published by KOTRA can be downloaded from the KOTRA Overseas Economic Information Dream website.

This content was produced with the assistance of AI translation services.