Market Competition of Fresh Vegetables between Supermarket and Wet Market in China based on the Difference of Quality and Price

Abstract

Supermarkets have already been in China for more than 20 years. Though boasting many advantages, they have not replaced wet markets to become major retail sites for fresh food. Both of them co-exist while competing today. Based on the perspective of differences between quality and price, this paper investigates supermarkets and wet markets in Nanjing, and uses Hedonic models to analyze the competitive relationships between supermarkets and wet markets on managing fresh vegetables. The main conclusions are as follows: (1) Supermarkets holds quality as its advantage, while wet markets prevail with low price. (2) Differences in quality can partly explain price differences, prices in wet markets fluctuate more widely over time. (3) In terms of the sale of fresh vegetables, supermarkets do not compete directly with wet markets, but highly concentrate on the high quality and high price of its goods. (4) After controlling quality differences, some vegetables’ prices in supermarkets are still significantly higher than those in wet markets. It shows that except quality differences, supermarkets have other differentiating advantages, such as variety, convenience, environment and characteristic service, etc.