Chinese consumers’ willingness to pay for rice

Abstract

PurposeChina’s expanded rice imports offer a profitable business opportunity for both domestic and international grain marketers. The purpose of this paper is to analyze the impact of select variables on Chinese consumers’ rice choices, specifically focusing on country-of-origin, price, organic, brand, freshness, and taste. The study concludes with suggestions for domestic and international rice marketers to help them develop more efficient rice marketing plans.Design/methodology/approachThis study developed a conditional logit model to analyze survey data gathered from Chongqing and Chengdu, two of China’s largest rice consumption cities.FindingsChinese consumers are price sensitive in their rice choices. Country-of-origin is the most imperative factor affecting rice selection for lower food expense consumers but branded rice attracts the attention of higher food expense consumers. Furthermore, these higher food expense consumers are willing to pay a small premium of $0.22 for a pound of organic rice.Research limitations/implicationsA general trend in demand for organic rice from higher food expense consumers was identified, and this trend predicts a profitable market for organic rice sellers. However, these research findings are geographically limited and may only represent a consumption trend from the two sampled cities rather than all of China.Originality/valueThe study concludes with meaningful recommendations to rice marketers to aid in developing profitable market entrance strategies to China.