The Promising Effect of a Green Food Label in the New Online Market

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.

Development and challenges of green food in China

“…With ongoing rapid growth of per capita earnings as well as awareness about safe and healthy food in China [19] , increasing numbers of people are choosing to purchase green foods. Now certification of green food in China is well established with certification of 4422 firms and 10093 green products in 2017 and a total of 10895 companies covering 25746 green food certified products prior to 2017 [3,4,8,10] . After more than two decades of the development of green food certification, it is important to conduct an assessment for the policy of extension of green food in China and the green food production sector needs special attention ( Fig.…”

“…Brazil, Russia, India, China and South Africa are large emerging economies with 70% of the world populations accounting for a huge share of food production and consumption. Sustainable food consumption behavior by consumers is a key factor affecting the food market [10] . Limited resources and climate fluctuations mean that the profit-driven agribusiness model is not a sustainable option [20] .…”

“…Green technologies can regulate excessive consumption and expenditure on water, energy and chemicals and ecologically restore soil quality, nutrient content and water holding capacity. Agri-biodiversity ensures conservation of genetic resources for new crop cultivars and animal breeds [10,22,30] .…”

“…Green food production system will ensure food security, rural development and skilled jobs, and diminish poverty over the long-term by improving livelihood of the producers and health of the consumers. Ecotourism, being the fastest growing tourism sector is a promising route for farmers and local community sustainability [10,22,30,31] .…”

“…Green food is usually assumed to be a high-quality food product in China [4] and a vital part of the rural economy that ensures farmer sustainability and survival. Development of green food can increase environmental sustainability of agriculture, reduce the foodborne diseases and increase farm incomes in China [5][6][7][8][9][10] . Green food has a longer certification history and greater popularity than organic food in China as evidenced by increased sales from 403 billion CNY (60 billion USD) in 2017 to 456 billion CNY (64 billion USD) in 2018 [8,11] , whereas the total amount of organic food is very limited due to its high prices.…”