Recent Changes in Food Consumption Behavior in China:Focusing on the Rice Retail Market

Abstract

　　In recent China, with the progress of globalization, there has been a move towards a shift to a sustainable food system in addition to a shift to a modern one.　While sales of food and beverages have remained almost flat, the new trend is that more than half of Chinese consumers are interested in healthy and nutritious foods, and twenty five percent of consumers want to buy upgraded rice （McKinsey, China Consumer Report 2016）.　Since structural changes in food consumption and in the retail market are the driving forces of the dynamism of food system, it is significant to understand the current situation and clarify the issues of food system transition for policy making.

　　The purpose of this study is to capture the dynamic changes in food consumption in China by focusing on the rice retail market.　Specifically, we introduce hedonic approach to analyze the factors of price formation using the information on e-commerce of rice for verifying our two hypotheses.　These are “China’s rice retail market is in a monopolistic competition characterized by product differentiation” （H1） and “The Meaning-based brands related to the formation of sustainable food market are developing in the rice retail market in China” （H2）.　In addition, we conduct the survey at retail stores in Shanghai to reinforce our analytical results.　Based on the above-mentioned analytical results, it is clarified that Chinese food system is in the phase of the transition from a modernization to a food system with both modernization and sustainability.　Finally, we draw policy implication on the strategy for Japanese rice marketing in China as follows.

　　In order to continuously sell a certain lot of Japanese rice in the Chinese market in the future, it is necessary for Japanese rice producers and distributors to work together to develop a marketing strategy based on appropriate market segmentation and targeting under such circumstances.　Specifically, instead of the traditional method of pushing out Japanese rice entirely by the government, firms should actively cooperate with each other to grasp the needs of consumers and build the required brands for Japanese rice through sharing the image and interacting with Chinese consumers.

JEL Classification:D12