Linking social media with energy labels, China

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1 Linking social media with energy labels, China Energy Efficiency Information and Advice Context The total energy consumption of China accounted for 22% of global consumption in In 2014, household energy consumption in China was 693 TWh, 2.2% more than in 2013 and it s expected to keep increasing. [HUANG Luting, ZHAO Feiyan EEDAL paper] China is a fast-growing economy that has put tremendous pressure there is adequate energy supplies to meet services. Thus, improving energy efficiency is a high priority. As China has modernized, there has been a significant increase in the number of consumer appliances. While there are some subsidy schemes, increasing attention is given to an energy labeling scheme together with other complementary information support. Launched in 2005, the Chinese Energy Label is a mandatory labeling program that has helped transform the Chinese market towards highly efficient appliances. China has enacted and implemented the National Program on Climate Change. China has accelerated the adjustment of its industry and energy structures and invested great efforts in improving energy efficiency, lowering carbon emissions and enhancing the ecosystem. 1 Because electricity generation is growing at an extraordinarily high pace, there is a need to address consumer demand. By November 2014, the China Energy Label (CEL) (sometimes also known as the Energy Efficiency Label (EEL)) covered twenty-nine products in five categories, including household appliances, industrial products, office equipment & electronics, commercial equipment, and lighting products. The label was featured on products from over 9,000 manufacturers. The label is under several pieces of legislation: the energy conservation law, the product quality law, the certification and accreditation regulation and the administration regulation of energy efficiency label. A smart phone app together with a QR code 2 was added to the label. The reasons are: The internet is seen as a major driver in the country to enhance innovation and productivity in the real economy. 90.8% of population, billion people, use mobile phone and 470 million people surfed the internet via mobile network. Since energy labels are mandatory, combining the label with an on-line ability to access more information is considered a viable approach. This is confirmed because social media and sharing of customer feedback constitutes a core sales and marketing strategy (and is much more important in the Chinese market than in others). The QR code on the energy label is currently a voluntary measure, the QR code portion of the CEL is detachable, and can be removed from the CEL if a particular manufacturer does not use QR codes. From Jan 2015 to June 2015 there are six manufacturers and 514 models using QR codes and during that period there were 60,000 scans. 1 Source: China s submission to UNFCCC, Intended Nationally Determined Contributions, The QR code a machine-readable code consisting of an array of black and white squares is, typically used for storing URLs or other information for reading by the camera on a smartphone..

2 Figure: Example of CEL with QR Code The QR code for a specific product model contains a web link, pointing to a web page that displays all registered data and information about the model scanned. The webpage is structured in modules, in order to make key messages more obvious to consumers and market supervisors. Figure: Scanning Result Objective To support the mandatory energy labeling program. 2

3 To provide accurate and timely information to consumers about a product s efficiency level, in order to enable them to make purchasing decisions that favor higher efficiency products. To overcome many of the barriers related to consumers understanding the information on the label. The QR code also links energy efficiency information to broader qualities of the product, including functionality criteria, which also appeal to the customer. Programme description Main characteristics Organisation: The China National Institute of Standardization (CNIS) is implementing agency for the consumer energy label. The National Development and Reform Commission (NDRC), General Administration of Quality Supervision, Inspection and Quarantine of China (AQSIQ) and Certification and Accreditation Administration of China (CNCA) are the government authorities. Length of establishment: The energy label was introduced in The QR code and app were introduced in Target audience(s): All consumers of end-use appliances Scope: With the smart phone app, shoppers can scan a QR code (a twodimensional barcode) and the app will provide immediate and relevant additional information about the scanned product to inform their buying decisions. Funding/financing model: CLASP 3 has provided some development support Delivery model: An app for smart phones that reads QR codes. This in turn provides detailed information on the specific consumer appliance together with feedback from previous purchasers. Consumers can scan with their smart phones to gain more detailed information about a product s energy performance and compliance with applicable regulations Key expertise required (delivery organisation): CNIS developed specialized app to help consumers to get more knowledge of energy performance by scanning QR CEL. CLASP, based in Washington, helped in the development of the app. Demand creation model: The app and QR code were trialled with participating manufacturers. Part of the trial was to carry out a one-monthlong consumer communication activity with Suning (a famous household appliances dealer in China). Meanwhile, for one month CNIS also began collecting consumer opinion of the usefulness of the app and QR code. After the pilot phase, CNIS started communicating to consumers about the availability of the app and QR Code service during Sustainable Consumption Week (an activity organised by UNEP). Quality Assurance & Control: For the manufacturer/distributor: Enterprises determine the label information by themselves based on test results and related standard; Enterprises print the label by themselves according to the relevant 3 Collaborative Labeling and Appliance Standards Program based in Washington DC. 3

4 requirements; Enterprises paste the label by themselves; Enterprises are responsible for the accuracy of the label information and are supervised. There is product registration and announcement at government website According to CNIS that oversees the CEL, QR codes have improved the management of the CEL by relevant administrative bodies, provided manufacturers with a useful channel for marketing their products, and lowered the cost of market supervision. Impact/evaluation Monitoring/evaluation schedule There has been no formal evaluation, although there were consumer surveys during the pilot phase. It is also difficult to monitor and evaluate. 4 As it is challenging to identify the causal link to energy efficiency benefits, given that the QR code goes beyond communicating just energy efficiency labels and information. The entire process has been monitored closely. As stated above, CNIS believes that the QR code has lowered the cost of market supervision, even though it is still only voluntary. There were detailed consumer surveys to better understand consumer habits and how well they understood the parameters on the existing labels. Market supervision: Annual inspection by AQSIQ; Inspection of EEL implementation by local authorities; Market special inspection of EEL by NDRC etc. competent departments; Social supervision by the public and industry organization. Market transformation The appliance market in China is very large, given the population, increased urbanization and modernization. CEL now covers 33 products, including 20 categories of household appliances and electronic equipment. Energy savings CNIS estimates that since the beginning of the program more than 400 TWh of electricity has been saved. 4 Perhaps one interesting comparison could be, whether products with QR codes are more popular than products without (controlling for both compared products to have the same level of EE). This could become strong evidence for the kind of awareness/info, sales and marketing strategies that are necessary to promote energy efficiency. 4

5 Lessons Learned (Problems/ adaptations) The use of QR codes in China began in 2006, allowing the technology time to evolve and mature. Consumers were often confused by the information only on the label itself. The energy label together with the QR code effectively acts as is a one-stop advice centre, bringing together all the parameters (including consumer feedback) to help a consumer make a decision. There are not the consumer advice websites that are quite common in OECD countries. From a CLASP study, the lessons learned were: Need to simplify the comprehensibility of parameters on energy labels because consumers value technical information, but they don t understand it. It was found that consumers may not understand that a large tier 1 refrigerator may consume more energy than a smaller tier 2 refrigerator. There is a need to revise savings estimates based on actual data According to EEDAL report by Lu Ye, Ai Xin, Li Jiayang and Tian Jianwei, based on China s experience to date, QR codes have improved the management of the CEL by relevant administrative bodies, provided manufacturers with a useful channel for marketing their products, and lowered the cost of market supervision. Accompanying measures In February 2013, Top10 China started to design Top10 energy saving stickers. The aim of the sticker is to be a useful complement of Energy Label and it should be: easy to read, focus on best efficient products, cover life-cycle cost and update along with market change. In each category, Top10 selected around 20 products and in total around 100 product stickers. Those stickers were applied in 300 Gome stores in Beijing, Shanghai, Guangzhou and Shenzhen (4 biggest cities in China) with the support of the Gome headquarter. Top10 has been testing different stickers and recently added a QR Code. The scan takes the consumer directly to the Top10 website. According to Top10, in its paper to EEDAL, the Top10 sticker contains two important messages: sufficiency and efficiency. It advises consumers to buy energy efficient appliances that are sufficient their household needs. It calculates the total energy saving while using a certain product, to counterbalance a relatively higher buying price. Perspectives The interest in using smart phones has grown exponentially. Consumers have shown great interest in being in control of managing the information that is available through scanning the QR code. Many other countries are now considering the use of QR codes for energy labelling programmes. References Yang Yu, Jayond Li and Lei Zeng, CLASP, Consumer Comprehension of the China Energy Label and Household Appliance-using Habits in China, Paper presented to EEDAL 2015 Lu Ye, Ai Xin, Li Jiayang and Tian Jianwei, Appliance Labeling for the 21st Century: Introducing QR code for the China Energy Label, paper presented to EEDAL

6 HUANG Luting and ZHAO Feiyan, Top10 Sticker: A Sufficiency and Efficiency Purchase Guide in China, paper presented at EEDAL 2015 T. Lock and S. Arditi, A new digital switchover? Delivering a digital energy label for Europe, eceee Summer Study paper, June 2015 Second National Communication to UNFCCC on Climate Change of The People s Republic of China, November 2012 People s Republic of China, Enhanced Actions on Climate Change: China s Intended Nationally Determined Contributions (INDC), to UNFCCC