An Investigation into the Viability of the Chinese Organic Baby Food Market from a New Zealand Exporter Perspective

Abstract

The organic food market in the People’s Republic of China (PRC) is developing at a rapid pace. In particular, sales of organic baby food are predicted to see growth in the coming years. Factors such as increased purchasing power among Chinese consumers and a heightened awareness of the health and safety of baby food products presents a window of opportunity to examine the viability of the market for a New Zealand based company, Fruit Solutions. The Chinese organic market is still in the early phases of development and has therefore received a low level of academic interest. Due to the high risk nature of the proposed business venture, Fruit Solutions commissioned research into Chinese consumer perceptions of organic baby food.

The purpose of this research study was to assess the viability and potential for success of organic baby food in Qingdao, a city situated in the northern province of the PRC. More specifically, the study sought to identify the influential product attributes and motivations that affect consumers’ baby food purchase decisions. In addition, the influence of country of origin in this product category was explored. Qualitative, semi-structured in-depth interviews with 14 parents were conducted in Qingdao. These interviews were analysed using the theory of planned behaviour as a guiding conceptual framework. Overall, the findings demonstrated that the core motivations for purchasing the product were food safety assurance and to ensure the child’s wellbeing. Consumers responded favourably to the concept of New Zealand organic baby food, as the product was perceived to contain desirable attributes - quality, healthiness, and a positive country of origin. However, findings from this research indicated that the level of awareness of the organic concept and New Zealand as a product country of origin were not high and that the lack of accessibility to the product and consumers’ price sensitivity could hinder the commercial success of the product. Therefore, Fruit Solutions is recommended not proceed with the export of organic baby food to the Qingdao market. For the opportunity to be viable Fruit Solutions would be required to invest significant capital into developing consumer awareness, an investment that could limit the overall profitability of the business venture. It is suggested that Fruit Solutions continue to monitor the market for changes in regulations and food safety controls, these may create a better environment to enter the market.