Product information and Chinese consumers’ willingness-to-pay for fair trade coffee

Abstract

Purpose

The purpose of this paper is to investigate Chinese consumers’ willingness-to-pay (WTP) for fair trade coffee given different amount of product information. Although coffee is becoming more popular in China, the concept of fair trade is often found unfamiliar to most Chinese consumers.

Design/methodology/approach

A total of 564 consumers were interviewed in Hubei, China. The key survey question asked consumers’ willingness to purchase a cup of fair trade coffee compared to a traditional cup of coffee. A modified payment card approach was used to elicit WTP. Before answering the purchase question, respondents were randomly assigned to one of three different information scenarios: basic definition, impact on sustainability and the environment, and information including both environmental and social implications.

Findings

Results indicated that consumers were generally willing to pay additional amount for fair trade coffee. Information played an important role in determining what types of consumers were responsive to fair trade coffee. Furthermore, the amount of information provided and consumer WTP did not follow a linear relationship.

Practical implications

Results obtained in this study are useful for coffee marketers to better target their promotion strategies.

Originality/value

In contrast to China's fast growing coffee market, little is known about consumer preferences and far less on fair trade coffee. This study is the first of its kind to understand Chinese consumers’ preferences for coffee in general and for fair trade coffee in specific.

Citation

Yang, S.-H., Qing, P., Hu, W. and Liu, Y. (2014), "Product information and Chinese consumers’ willingness-to-pay for fair trade coffee", China Agricultural Economic Review, Vol. 6 No. 2, pp. 278-294. https://doi.org/10.1108/CAER-01-2013-0017