Hedonic valuation of country of origin in the Chinese dairy market

Abstract

The implicit value to Chinese consumers of the country-of-origin (COO) characteristic of dairy products is of great importance to estimate. This study adopted the hedonic price model to evaluate the shadow price of the COO attribute of both UHT fluid milk and infant formula collected from the five leading e-commerce platforms (Alibaba’s Tmall Supermarket, Jingdong, Suning Purchase, COFCO I buy nets, and Yihaodian) in China. The target countries were Germany, France, the Netherlands, and Spain from the EU, and Australia and New Zealand from Oceania. The results show that the implicit values of the COO of UHT fluid milk and infant formula are reversed. Having a COO of Spain and Germany decreased the price of UHT fluid milk compared with China, while Germany, New Zealand, France, the Netherlands, and Spain all earned a price premium on infant formula. The B2C platforms Yihaodian, Jingdong, Alibaba’s Tmall Supermarket and Suning Purchase all earned a price premium above COFCO I buy nets. These findings have important implications for dairy industry of EU countries, Australia, New Zealand, and China in terms of the promotion of domestic dairy products. Moreover, this study contributes to the existing body of literature by innovating in employing sales data from e-commerce scanners to study the implicit value of food attributes.