1 Consumer Attitudes toward the Purchase of Organic Products in China Christopher Gan 1 Chang Zhiyou 2 , Minh Chau Tran 3 , David A. Cohen 4 Abstract This study investigates Chinese consumers’ levels of awareness of and attitudes towards organically produced food products. We focussed specifically on the characteristics of safety, health value, environmental degradation, and taste and price. We then tested how these co-variates contribute to purchase decisions for organic foods. JEL Classifications: D11, D12 Keywords: organic products, food safety, environment, price 1 Corresponding Author, Professor, Department of Business and Finance, Faculty of Agribusiness and Commerce, PO Box 85084, Lincoln University, Christchurch, New Zealand, Tel: 64-3-423-0337, Email: [email protected]. 2 Vice Dean, School of Economics and Management, Yunnan Normal University, Cheng Gong, Kunming, Yunnan, P.R China, Tel: 86-871-65911896, Email: [email protected]3 Lecturer, Faculty of Economics and Development Studies, College of Economics, Hue University, 100 - Phung Hung, Hue City, Vietnam, Tel: 84-987-934-944; Fax: 84-54-3529-491; Email: [email protected]4 Associate Professor, Department of Agribusiness and Markets, Faculty of Agribusiness and Commerce, PO Box 85084, Lincoln University, Christchurch, New Zealand, Tel: 64-3- 423-0249, Email: [email protected]Acknowledgements We would like to thank Miss Wang Xiangxiang and the postgraduate students in marketing in the School of Economics and Management, Yunnan Normal University, Cheng Gong, Kunming, Yunnan, P.R China, for administering the survey questionnaire in Kunming city.
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Consumer Attitudes toward the Purchase of Organic Products in China
Christopher Gan1 Chang Zhiyou2, Minh Chau Tran3, David A. Cohen4
Abstract This study investigates Chinese consumers’ levels of awareness of and attitudes towards organically produced food products. We focussed specifically on the characteristics of safety, health value, environmental degradation, and taste and price. We then tested how these co-variates contribute to purchase decisions for organic foods. JEL Classifications: D11, D12 Keywords: organic products, food safety, environment, price 1Corresponding Author, Professor, Department of Business and Finance, Faculty of Agribusiness and Commerce, PO Box 85084, Lincoln University, Christchurch, New Zealand, Tel: 64-3-423-0337, Email: [email protected]. 2Vice Dean, School of Economics and Management, Yunnan Normal University, Cheng Gong, Kunming, Yunnan, P.R China, Tel: 86-871-65911896, Email: [email protected] 3Lecturer, Faculty of Economics and Development Studies, College of Economics, Hue University, 100 - Phung Hung, Hue City, Vietnam, Tel: 84-987-934-944; Fax: 84-54-3529-491; Email: [email protected] 4Associate Professor, Department of Agribusiness and Markets, Faculty of Agribusiness and Commerce, PO Box 85084, Lincoln University, Christchurch, New Zealand, Tel: 64-3- 423-0249, Email: [email protected] Acknowledgements We would like to thank Miss Wang Xiangxiang and the postgraduate students in marketing in the School of Economics and Management, Yunnan Normal University, Cheng Gong, Kunming, Yunnan, P.R China, for administering the survey questionnaire in Kunming city.
concern and lifestyle appear to have less or little impact on the decision to purchase organic
products. We thus suggest that organic product purchase decisions in Kunming City are not
necessarily affected by environmental values relating to organic food products, food safety concern
and lifestyle. Further, because our sample was relatively large, these results may be generalisable to
other large Chinese cities.
Though the organic foods category is a one, our Chinese sample reacted in a similar manner to those
in other countries. For example, Giannakas (2002) and Groves (1998) reported that many potential
organic consumers in Western industrialised countries mistrust organic product labels and believe
that conventionally produced foods are often misrepresented as organic. Thus, although Chinese
consumers are concerned about food safety and they intend to purchase organic products,
incomplete or inadequate understanding of the word “organic” may be a barrier to organic food
consumption.
Furthermore, our results show that demographic characteristics have weak influence on the
purchase of organic products. Only income substantially influences respondents’ decisions to
purchase organic products, since these products are more expensive than conventional products.
Our results also document that households with monthly incomes higher than RMB4001 are more
likely to buy organic products. This further supports the findings of Gracia and Magistris (2007), who
reported that consumers with high incomes often buy organic food, perhaps indicating their
awareness of these products and the status associated with purchasing them. However, like
consumers everywhere, the Chinese in general appear to be price sensitive and look for value for
money when buying food products.
This study of attitudes and purchase behaviour is not without limitations. For example, there may
have been interviewer effects such as inaccuracies in the recording of answers to open ended
questions. As with any questionnaire-based effort, respondents might not have been accurate nor
consistent in their reports of behaviours. There might also have been some degree of misreporting
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as a consequence of social desirability bias. This form of bias may be more problematic in our
research, as data collection was carried out in a society with a highly communal orientation. In
addition, though we varied our data collection locations to include the widest range of market types,
our reliance on the intercept technique may not have sampled equally from all socio-economic
status groups. Our robust sample size, however, is likely to mitigate the combined effects of these
potential distortions.
6. Implications
Females and households with children are more likely to consume organic products. Since the recent
high-profile scandals involving tainted food products in China, there has been an increase in demand
for information about the possible benefits of organic products. These two groups are thus likely to
develop into a major consumption group for organic products. Marketing strategy could be designed
to specifically target them. For example, when designing advertising and packaging of products,
words such as “safe”, “healthy” and “environmental friendly “ could be emphasised, presenting a
positive image for organic products .
Clearly, health and safety are factors key motivators for purchasing organic products. These should
therefore be the foundation for programmes designed to increase organic consumption in China.
This conclusion is further strengthened by the fact that when asked about what would persuade
them to buy more organic products, consumers identified stringent, consistently enforced
regulations and trustworthy quality assurance for purchasers of organic products. Given that people
with higher incomes are more likely to be organic products consumers, it is surprising that price does
not appear to be a major factor influencing either purchasers or non-purchasers of organic products.
A major reason for non-purchasers avoiding organic products is the lack of sufficient information
about them. Our survey reveals that those who do not purchase organic products may have general
knowledge about these products, but do not have enough detailed information to clearly
differentiate the unique attributes of organic from conventional alternatives. This supports the
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results reported by Xu and Wu (2009), who concluded that consumers’ knowledge of the food safety
problem is limited, though this may have changed in the six years since that study. There still
appears to be limited media coverage focussed on food safety in China. Therefore, the government
can cooperate with public and private organizations to produce brochures, campaigns and TV
programmes on the benefits of organic products to attract non-buyers. Meaningful minimum
certification standards can be put in place. Such standards and the organisations responsible for
enforcing them can then be communicated to the public. In addition, schools can educate students
about nutrition and the benefits of healthy food choices.
Recent food security failures have increased Chinese consumers' concern for the safety of the foods
they purchase and consume. This, coupled with the immature development of the organic product
market, presents an opportunity for the marketplace. Promotion of the attributes of organic
products and building trust in this product category would likely increase consumption of organic
products. Emphasising the positive health benefits of organically produced products, the
environmental advantages they provide, and above all, the enhanced safety of certified and
enforced standards, may help provide solutions to Chinese consumers’ search for food products that
are both trustworthy and have positive benefits.
We suggest that future research efforts include longitudinal studies, so that changes in attitudes and
purchase behaviours can be documented and more fully explored. Research should also focus on
influences over purchase decisions that might emerge as the availability, variety, and volume of
organic products increase. Government efforts to improve production and encourage consumption
of organic products will likely exert downward pressure on prices, further enhancing their
attractiveness to consumers. The impact of such changes should be incorporated into future
projects. Finally, the outcomes of these processes, for example, an improvement in public health as
a result of increased consumption of organic foods, should be recognised and included in future
research efforts.
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Table 1. Rotated Component Matrix for the Respondents’ Attitudes towards Price, Health, Environmental benefit, Convenience, Label, Health concern, Ethical concern, Environmental concern, Lifestyle and Food safety Factors
VARIMAX Rotated Loading Commonalties
F1 F2 F3 F4
Factor 1: Price
Organic products are more expensive than conventional products.
0.654 0.577
Price of organic products is a barrier to decision to buy
0.767 0.632
Factor 2: Health benefit
There are no preservatives in organic foods.
0.801 0.724
Organic production does not use chemical pesticides or fertilizers
0.748 0.696
Factor 3: Environmental benefit
Organic products are more ecologically sound than conventional products
0.739 0.690
Products grown “organic” are obtained from sustainable resources and less polluted discharges into air, water and soil than grown conventionally.
0.789 0.741
I believe organic food consumption contributes to protect environment
0.786 0.718
Factor 4: Convenience
Organic products are not easily found in grocery stores compared with conventional products.
0.689 0.643
There is a small variety of organic products compared with conventional products
0.732 0.659
Eigenvalues 1.090 1.312 2.933 1.446
Variance explained (%) 1.730 2.083 4.656 2.296
Cumulative variance (%) 1.730 3.813 8.469 10.765
Number of items 2 2 3 2
Cronbach’s Alpha 0.514 0.724 0.862 0.713
Inter-item correlation 0.348 0.568 0.676 0.555
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Table 1. Rotated Component Matrix (cont.)
VARIMAX Rotated Loading Commonalties
F5 F6 F7
Factor 5: Label
Organic food labels are confusing 0.767 0.618
Organic food labels can easily be imitated
0.626 0.539
I don’t know how organic food labels look like
0.485 0.433
Factor 6: Health Concern
I worry that there are harmful chemicals in my food.
0.397 0.505
I do not eat foods with additives and preservatives.
0.383 0.511
I am concerned about drinking water quality.
0.471 0.501
I usually read the ingredients labels on the foods I consider purchasing.
0.727 0.617
I read health-related articles in newspaper, magazines and books
0.693 0.598
Factor 7: Ethical Concern
Buying organic food product shows that I believe in the fair treatment of animals
0.789 0.698
I buy meat and eggs produced in a way that does not cause the animals pain or suffering.
0.706 0.567
Eigenvalues 1.645 1.702 2.365
Variance explained (%) 2.611 2.701 3.755
Cumulative variance (%) 13.376 16.077 19.832
Number of items 3 5 2
Cronbach’s Alpha 0.594 0.692 0.661
Inter-item correlation 0.333 0.318 0.495
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Table 1. Rotated Component Matrix (cont.)
VARIMAX Rotated Loading Commonalties
F8 F9 F10
Factor 8: Environmental concern
Saving energy is an important goal for me.
0.578 0.540
I recycle (e.g., plastic bottles, newspapers).
0.544 0.505
I take my own shopping bag when I go to the market.
0.504 0.515
Climate change is a serious issue to me.
0.630 0.573
Factor 9: Lifestyle
I avoid eating snacks. 0.559 0.518
I exercise regularly. 0.758 0.664
I am generally in good health. 0.602 0.636
Factor 10: Food safety
All restaurants should be inspected for cleanliness.
0.655 0.545
I don't think the government is doing enough to prevent food contamination.
0.778 0.666
I always carefully wash my hands before I prepare something to eat.
0.421 0.448
Food manufacturers are not doing enough to prevent food contamination.
0.674 0.620
Pesticide residues in food cause illnesses in humans.
0.621 0.638
Eigenvalues 3.486 1.584 10.996
Variance explained (%) 5.533 2.514 17.454
Cumulative variance (%) 25.365 27.879 45.333
Number of items 4 3 5
Cronbach’s Alpha 0.652 0.590 0.801
Inter-item correlation 0.325 0.331 0.449
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Table 2. Model Variable Definitions
Variable Name Description Priori Sign
B_HEALTH Perceived benefit to health +
B_ENVIRONMENT Perceived impact on the environment +
CONVENIENCE Convenience in purchasing and preparing -
LABEL Presence of informative label -
C_HEALTH Degree of concern for health +
C_ETHICS Degree of concern over ethics of production +
C_ENVIRONMENT Degree of concern for environmental impact +
LIFESTYLE Type of consumer's lifestyle +
SAFETY Degreer of concern for product safety +
PRICE Perception of price of organic products -
HH_SIZE Number of members of household +
TASTE 1 if respondent perceives organic products taste better than conventional products, 0 = otherwise
+
INCOME 1 if respondent has income higher than RMB60001, 0 = otherwise
+
KNOWLEDGE 1 if respondent has some knowledge of organic products, 0 = otherwise
+
GENDER 1 if respondent is female, 0 = male +
AGE (Dummy) 1 if respondent is younger than 36 years of age2, 0 = otherwise
+/-
HH_STRUCTURE (Dummy) 1 if respondent has no child, 0 = otherwise -
MARITAL (Dummy) 1 if respondent is married/engaged/in De facto relationship, 0 = otherwise
+
EDU (Dummy) 1 if respondent has completed bachelor degree or higher
+
ε Error term 1 Previous studies have utilised this figure. 2 Thirty-six years of age is the median value for the sample.
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Table 3. Profile of the Survey Respondents
1 Eighteen is the age of majority in China.
Organic Product Purchasers
(n = 446)
Organic Product Non-Purchasers
(n = 229)
Total: Purchasers + Non-Purchasers
(nΣ = 675)
Gender
Male 32.81 36.77 34.13
Female 67.19 63.23 65.87
Age
181 - 25 36.26 39.01 37.18
26 - 35 31.53 36.32 33.13
36 - 45 21.62 14.35 19.19
46 - 55 6.98 8.97 7.65
Older than 55 3.60 1.35 2.85
Marital status
Single 40.22 47.09 42.51
Married/De facto/Engaged 58.66 50.22 55.84
Divorced/Separate/Widowed 1.12 2.69 1.65
Education
No formal education 1.12 0.90 1.05
Primary school 3.60 3.59 3.59
Middle school 10.11 6.73 8.98
Some high school 7.19 4.93 6.44
High school graduate 13.71 14.35 13.92
Three year college diploma 20.67 26.01 22.46
Bachelor 37.30 35.87 36.83
Postgraduate 6.29 7.62 6.74
Occupation
Business employee 21.90 20.27 21.35
Civil Servant 4.51 4.95 4.66
Company Manager 5.42 5.41 5.41
Normal company staff 16.70 15.77 16.39
Owner of private business 5.87 4.05 5.26
Professional 12.64 10.36 11.88
Self-employed 14.00 14.86 14.29
Retired 2.93 3.15 3.01
Unemployed 4.06 4.95 4.36
Other(s) 11.96 16.22 13.38
Household structure
Single adult 18.92 24.89 20.90
Couple without children 5.41 9.05 6.62
Couple with a child/children 47.30 37.56 44.06
Single parent with a child/children
1.80 2.71 2.11
Extended family 25.23 24.43 24.96
Other 1.35 1.36 1.35
Household income
RMB 2,000 or less 7.67 12.16 9.17
RMB 2,001 to RMB 4,000 18.74 24.77 20.75
RMB 4,001 to RMB 6,000 23.70 27.03 24.81
RMB 6,001 to RMB 8,000 21.22 18.02 20.15
RMB 8,001 to RMB 10,000 14.90 10.36 13.38
More than 10,000 RMB 13.77 7.66 11.73
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Table 4. Organic Product Purchasers and Non-Purchasers’ Perception of Organic Products
Purchasers Non-purchasers
Total Significance of differenceb
Meana SD Meana SD Meana SD
Factor 1: Price
Organic products are more expensive than conventional products.
3.80 1.20 3.95 1.21 3.85 1.21 -1.37NS
Price of organic products is a barrier to decision to buy
3.44 1.32 3.65 1.27 3.50 1.31 -1.91*
Factor 2: Health Benefit
There are no preservatives in organic foods.
3.57 1.25 3.32 1.28 3.49 1.26 2.19**
Organic production does not use chemical pesticides or fertilizers
3.53 1.27 3.40 1.34 3.49 1.29 1.19NS
Factor 3: Environmental benefit
Organic products are more ecologically sound than conventional products
4.15 1.05 3.92 1.13 4.08 1.08 2.57***
Products grown “organic” are obtained from sustainable resources and less polluted discharges into air, water and soil than grown conventionally.
4.22 1.05 3.97 1.15 4.14 1.09 2.80***
I believe organic food consumption contributes to protect environment
4.20 1.05 4.03 1.05 4.14 1.05 1.81*
Factor 4: Convenience
Organic products are not easily found in grocery stores compared with conventional products.
3.80 1.25 3.97 1.28 3.86 1.26 -1.65*
There is a small variety of organic products compared with conventional products
Reasons for not purchasing organic products Confused (about terminology, certification bodies, etc) Do not see any benefits in organic products Do not taste any different from conventional products High price Insufficient information about the products Lack of variety Not available where I shop Organic products are not high enough quality Other(s) (Please specify)
Factors which would persuade to buy organic products Cheaper prices Easier to find (better distribution) Greater variety of products Increase in my income More information on the labels Trustworthy organic certification on packages
44.84 61.43 49.33 35.87 36.32 48.88
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Table 7. Logit Result (Consumers’ Purchase Decisions towards Organic Products)
Variable Logit Coefficient
T-statistic Marginal Effect
HH_SIZE 0.053 0.640 0.011
TASTE 0.884*** 4.074 0.187
INCOME 0.506** 2.285 0.105
KNOWLEDGE 1.696*** 4.949 0.397
GENDER 0.148 0.653 0.031
AGE (Dummy) -0.458 -1.624 -0.093
HH_STRUCTURE (Dummy) -0.046 -0.184 -0.010
MARRIED (Dummy) 0.005 0.020 0.001
EDU (Dummy) 0.091 0.388 0.019
PRICE -0.133 -1.205 -0.028
B_HEALTH 0.034 0.315 0.007
B_ENVIRONMENT 0.133 0.996 0.028
CONVENIENCE -0.216* -1.783 -0.045
LABEL -0.095 -0.845 -0.020
C_HEALTH 0.400** 2.128 0.084
C_ETHICS 0.238** 2.326 0.050
C_ENVIRONMENT 0.125 0.774 0.026
LIFESTYLE 0.176 1.262 0.037
SAFETY 0.066 0.331 0.014
CONSTANT -3.815*** -2.873
Number of observations 5311
Likelihood ratio 111.31*** Pseudo R2 0.17 PCP 74.39% EPCP 64.87% VIF 1.34 Hosmer-Lemeshow’s goodness of fit: p = 0.42
1 Questionnaires missing one or more essential data points were excluded from the analysis.