What makes consumers buy from the informal rather than formal retail market? A consumption value perspective

Abstract

Purpose

This paper aims to understand consumption values buying from informal retail markets (i.e., street vendor retailing). It also explores why consumers prefer daily necessary goods from the informal compared to the formal retail market (such as supermarkets, retail chain outlets and e-commerce).

Design/methodology/approach

Employing the qualitative research approach, this study collected data from nine respondents in two areas in Malaysia. Data were collected using semi-structured interviews and analysed using the thematic analysis technique. Only representative verbatim codes were presented under five themes of consumption value theory.

Findings

Consumers are triggered by the convenience, ease, and exclusive products (conditional value), friendly and known relationship with informal sellers, as well as the availability of some particular food items (emotional value) and lower price and freshness of groceries (functional value) while buying from informal compared to formal retail vendor.

Research limitations/implications

This study provides knowledge implications to the consumption value theory. Functional, emotional, and conditional values are the dominant components of purchase behaviour in informal compared to formal retail channels. Social values are common, whereas epistemic value is more substantial in formal retailing.

Practical implications

Findings are helpful for informal retail businesses to understand consumers' buying behaviour. Informal retail owners should ensure that commodities are fresh, highly affordable and available in the local communities. Building a friendly relationship with consumers would be a key to the success of this retail sector.

Social implications

Authorities should support informal sellers to set up mobile retail stores in residential areas. This effort would offer greater convenience to both parties in informal businesses and ensure informal sellers' financial and social well-being.

Originality/value

Despite the widespread acceptance of buying goods from informal retail vendors, research on consumption value in informal retailing is largely overlooked. Previous research primarily deals with formal market phenomena due to their size and economic contribution. Consequently, current literature lacks an understanding of why consumers prefer to buy from informal retail vendors for their daily groceries when the formal retail channel could fulfil similar needs. Using a qualitative research design, this research uncovers consumers' buying motives from informal compared to formal vendors.

Citation

Sarker, M., Munerah, S., Yinyi, A.T., Kasem, N. and Hoque, I. (2024), "What makes consumers buy from the informal rather than formal retail market? A consumption value perspective", The Bottom Line, Vol. 37 No. 3, pp. 309-331. https://doi.org/10.1108/BL-07-2023-0225