Private label drugs in China: the consumer perspective

Abstract

PurposeThis paper's aim is to investigate how Chinese consumers' purchase intention of private label drugs is associated with price advantage, appearance, store trust, manufacturer trust, and drug quality.Design/methodology/approachA survey study was conducted in two large cities in China. Subjects were asked to decide whether they would purchase a private label drug over a national brand drug and to evaluate a set of related factors. Data were collected from 230 consumers.FindingsA total of 45 percent of the variance in private label drug purchase intention is explained by the five predictors. Price advantage, store trust, manufacturer trust, and drug quality are all significantly related to purchase intention, whereas appearance is not. None of the control variables (age, gender, health literacy, and income) has a significant relationship with purchase intention. Product quality and service quality are significant predictors of store trust, accounting for 44 percent of its variance.Practical implicationsThe private label drug market has great potential in China, yet little is known about what factors influence Chinese consumers' intention to purchase private label drugs.Originality/valueThis paper is one of the first attempts to achieve an in‐depth understanding in this area. The findings of this research will benefit drug retailers and manufacturers who are interested in the Chinese market.