CONSUMER’S BEHAVIOR TOWARD ORGANIC VEGETABLES IN HO CHI MINH CITY

Abstract

Together with the development of economics, food safety becomes a hot topic in Vietnam, especially in urban cities like Ho Chi Minh City. Vegetables are essential and the main part of the family meal and more shoppers are interested in organic vegetables. Many producers and convenience shops invested in organic vegetables, but many also left this industry because of low business.

This research will help to understand consumers’ behavior and intention on buying organic vegetables, which factor is really impacting their buying action, and how much they are willing to pay for this premium price product.

The study is based on Theory Planned of Behavior with add-in the Trust scale which is a significant impact on buying behavior on organic food when the premium price was charged. The questionnaire was developed by an in-depth interview with people working in the organic food industry. More than 150 data were collected which focused on medium and high-income employee offices and they usually shop for food.

We found out that belief in health and environmental benefit, Perceived behavior control, and Trust are a significant impact on organic vegetables’ buying intention and behaviors. And more than 80% with medium and high income are just willing to pay <20% premium price for organic vegetables, important data for organic food producers.

Main findings

This study confirmed that extended TPB as a research model is useful for explaining consumers’ organic vegetables purchase intentions and validates the claim that attitude and perceived behavioral control and Trust be a positive impact on purchase intentions for organic vegetables. Of these TPB variables, belief in environment and health benefits was found to be the strongest predictor of intention to purchase green products followed by perceived behavioral control and Trust. Consumers in Ho Chi Minh who have highly concerned about the environment and health should be the first target to sell green products as they held a positive attitude towards organic vegetable purchasing.

Another significant finding from our study is whether or not a significant relationship exists between Ho Chi Minh consumers’ perceived behavioral control and organic vegetable purchase intention. Responding to this question is of a great relationship in the green marketing field since perceived behavioral control has been considered a good predictor of individuals’ intentions to buy green products. Intentions were positively influenced by perceived behavioral control, as consistent with the previous studies.

To reduce the perceived difficulty, organic food marketers must focus on communicating the availability of products, mode of acquisitions, and variety of green products with a view to enhancing the perceived availability beliefs and consumers’ convenience by stressing its logistic efficiency. Furthermore, we found subjective norm a non-significant predictor of purchase intention identified as the weakest link in intention models. Consumers feel that approval of “significant others” is not that important a factor for buying green products, their friends/family members/peer group failed to provide any positive thrust concerning a reason for buying organic vegetables.
It seems obvious from the definition of organic vegetables that consumer trust is a key prerequisite for building a market for such products, including green and more specifically organic food products. Based on a validated, comprehensive consumer behavior model and a reliably measured multi-dimensional conception of trust, this study gives new insights into how and how much consumer trust influences the establishment of a market for organic vegetables. The consumer confusion and especially the lack of trust in Vietnam organic certification and control documented in this and other studies are indeed an additional barrier for Vietnam consumers and consequently for the development of a Vietnam market for organic vegetables. For example, in the survey, 67 % disagreed with the statement, “I have confidence in Vietnam Government controlled organic vegetables’’ and more than 62% of consumers trust the oversea product. This is really a big problem for the Vietnam government and producers.

Implications for practice

From the model examined we can see the key factor impact to buying intention is belief in the environment and the health benefit of organic vegetable. To increase buying intention of organic vegetables producers must enhance the benefit of health and environment of the product than other elements. In their marketing strategy, they should focus on these factors and try to explain how their product is healthy and free from chemicals and how is the benefit of using organic products. They need to emphasize how their product plants how can help to protect the environment and need to let customers know all the process of planting and make it public so customers can clear about the benefit together with marketing plan also to explain how good for the environment and health the product is.

The second impact is Perceived Behavior Control it shows that with the income of Ho chi Minh consumer up to now they need to reduce their cost of product and the premium price need to be below 20% to increase capacity but together with getting all organic ready in convenient store for customer easy to reach to the product, it helps a lot to improve customer buying intention.

Trust plays an important role in enhancing buying intention and behavior, especially Ho Chi Minh consumer trust in producers rather than the certification system. This make producer should invest in customer relationship rather than applying certification.

And last but not least more than 67% do not trust Government control and 62% just trust an oversea product is a challenge for Vietnam’s government and producers when they want to improve Ho Chi Minh organic vegetable market.

The research also shows that the target group for marketers is buyers, not their significant others. They are the ones to make decisions when buying organic vegetables than influenced by others. They should improve the ease and capability of purchasers through the availability and cost of the product to improve the intention of buying. The research also indicates that just 27% of consumers are willing to pay 20% more and 10% agreed to pay 40% more for organic vegetables. This is really an important finding and a big challenge for producers.

Quoc Trung Pham, Thanh Thu Thuy Nguyen
School of Industrial Management, Bach Khoa University (VNU-HCM)

Demand for Vietnamese fruits and vegetables skyrockets overseas

As fruit and vegetable exports to China face difficulties, many Vietnamese enterprises have spent hundreds of millions of dollars to invest in systems and processing plants to sell their products in Europe and the US.

Nguyen Lam Vien, General Director of Vinamit Joint Stock Company, said: “China is becoming more and more strict in quality control, traceability, packaging. Their ‘Zero COVID-19’ policy makes it difficult for many fruit and vegetable exporters.”

“For Vinamit, with more than 20 years of experience in doing business in the market, with carefully prepared planting area and standard processing and packaging, the strict disease control affects the fulfillment progress. The European and American markets currently have great demand, creating opportunities for businesses to push into these markets.”

Nguyen Van Thu, General Director of GC Food Joint Stock Company (GC Food), said: “We are determined to invest methodically from the raw material area to the processing stage to enter new markets.”

Thu added that the company invested in building a fruit and vegetable freezing factory in Dak Lak province with a total capital of about 100 billion VND as the province is an area for many fruit materials such as avocado, mango, and durian, which are suitable for the increasing consumption demand on the local and world markets.

According to Thu’s company, although some traditional markets face difficulties during the recovery process, other markets have great demand for agricultural products. The amount of exported processed products has doubled from 2021.

As an enterprise with many years of exporting goods to the EU, Nguyen Dinh Tung, General Director of Vina T&T Joint Stock Company, said: “Vietnamese vegetables and fruits have many opportunities in the market because Vietnam is the only country in the Asia-Pacific region to have a free trade agreement with the EU.”

“Once the Vietnam – EU Free Trade Agreement took effect, the tax rate of some Vietnamese vegetables and fruits entering the EU was reduced to 0 percent, creating a substantial competitive advantage compared to other countries in the region.”

Tung said the EU has rigorous standards but capturing market share was not too difficult if enterprises could meet them. In the EU, Vina T&T does not face many competitors because the company has full certifications such as Global GAP, HACCP, and SMETA, and sales negotiations go smoothly.

Since the beginning of the year, the company’s fruit and vegetable exports to the EU have increased sharply, especially grapefruit, coconut, and dragon fruit. The company is planning to expand more products into EU supermarkets.

Nguyen Thanh Binh, Chairman of the Vietnam Fruit and Vegetable Association, said that the local fruit and vegetable export market is shifting, adding that for many years China has always been Viet Nam’s largest fruit and vegetable export market, accounting for 65-80 percent of the total turnover of the industry.

However, in the first two months of the year, exports to China decreased by nearly 19 percent from the same period last year, only reaching 260 million USD.

Meanwhile, vegetable and fruit exports to the US increased by almost 70 percent, reaching 46 million USD; the Republic of Korea increased by nearly 32 percent, reaching 25 million USD; and Japan increased by 12 percent, reaching 23 million USD. Vegetable and fruit exports to Australia increased by 45.7 percent, while the Netherlands increased by 51.5 percent.

Binh said the market shift positively affected the fruit and vegetable industry. The US, EU, Australia, the UK, Japan, and Canada were among the markets evaluated with great potential.

Minister of Agriculture and Rural Development Le Minh Hoan said that Vietnam’s advantage in free trade agreements would help fruit and vegetable exporters quickly access world markets in rapidly recovering demand. 

The minister said the EU was the largest fruit and vegetable import market globally, but the number of vegetables and fruits imported from Vietnam only accounted for a minimal amount, less than 1 percent.

According to MARD, the US has just officially licensed the import of many Vietnamese fruits, creating favorable conditions for enterprises to expand their exports./.

(Source: Vietnamplus.vn)