Abstract
Although public interest in sustainable and safer products have steadily risen worldwide, research has shown a difference between consumer’s willingness to purchase, and actual purchasing behavior, for which two main explanations exist, including a lack of accessibility and a poor knowledge of related attributes. Fortunately, the emergence of online food markets may improve this situation through convenient accessibility to sustainable food and detailed description about sustainability labels. This research uses a hedonic price analysis to compare the price premiums for the sustainability attribute in Chinese online and offline markets, using edible oil as a case. The specific objective is to test the different values of a sustainable attribute, a green food label, in two types of markets. Results show that the green food attribute could gain a price premium in the online market but not in the offline market, indicating the importance of the online channel for sustainable food sale in China. A big price mechanism difference between online and offline markets is also found, with regard to attributes of production method, variety, place of origin, packaging, and discount. These results provide a guide for firms’ pricing strategies in online and offline markets.
Highlights
Concerns about the environmental damage caused by conventional agricultural and food production have piqued the interests of consumers and industry for food produced in alternative ways, such as green and organic systems which are relatively less damaging to the ecosystem and are more sustainable
The four columns in the left panel of the table are the coefficient estimates for the offline market, and those in the right panel are for the interaction with online market
The online market is different from the offline market in many aspects
Summary
Concerns about the environmental damage caused by conventional agricultural and food production have piqued the interests of consumers and industry for food produced in alternative ways, such as green and organic systems which are relatively less damaging to the ecosystem and are more sustainable. Such sustainable food system promotion has been popular among stakeholders in developed countries in the last century but has been controversial among policymakers in developing countries whose primary goal is feeding their population [1]. Among all business to consumer e-retailers in China, Alibaba’s Tmall owns the biggest market share, 65.2%; followed by Jingdong with the percentage of 23.2, the third giant is Suning, taking account of 5.3% [32]
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