Critical Factors Affecting Consumer Buying Behaviour of Organic Vegetables in Vietnam

Abstract

In Vietnam, the desire to consume organic vegetables is increasing as people become increasingly concerned about foods that contain several chemicals and toxins that are hazardous to their health. However, numerous subjective and objective factors continue to influence customers' purchase intention and behavior, indicating that this market has not yet reached its full potential. The study analyzes the impacts of trust, price, and convenience on consumers' consumption behavior and frequency of using organic vegetables in Northern Vietnam. We surveyed 312 consumers in the region. After classifying the data, 178 participants have used or regularly used organic vegetables selected for further study. Next, the author applied SmartPLS software with version 3.3 to test the hypotheses and analyze the effects of the observations. The result shows that three main factors affect customers' organic vegetable consumption behavior, especially perceived convenience. This study contributes to the development of comprehensive policy mechanisms and regulations on product traceability. Furthermore, market management authorities must have a strategy in place to inspect the product quality of organic vegetable store chains regularly to build customer trust and support the growth of organic vegetable production and supply chains in Vietnam's northern region.

1. Introduction

Modern life with increasing income makes consumers pay more attention to their health and to change a global environmental crisis, which resulted from years of irresponsible production and consumption without regard for its long-term effects (Bengtsson et al., 2018). Therefore, the trend of using purely natural origin foods is gaining popularity, making the market vibrant. Over the past few decades, more consumers have changed the way consuming food and use organic products regularly in their daily lives for their health and the environment (Ditlevsen et al., 2019; Apaolaza et al., 2018; Stranieri et al., 2017; Nguyen & Truong, 2021). Those who frequently consume organic food are green consumers (Watanabe et al., 2020). Especially in 2020, under the influence of the COVID-19 pandemic, while a series of businesses faced difficulties and slow consumption, agricultural products, and organic food exploded. The demand for organic products has grown stronger because consumers are more and more conscious of using organic foods to increase the body’s resistance and fight against diseases (Ali et al., 2021). As a result, the global organic food market reached $201.77 billion in 2020, expecting to reach $221.37 billion by 2021. Organic food refers to a product with an organic label, tested by a reputable organization, and produced under a method with a low impact on the environment. Several studies show encouraging results on the effectiveness of organic agriculture in reducing greenhouse gas and carbon emissions (Squalli & Adamkiewicz, 2018), biodiversity, and animal welfare (Sirisupluxana & Bunyasiri 2017). Other studies show that organic foods reduce pesticide levels and cancer risk in humans (Baudry et al., 2018). Therefore, although the growth of the organic food market is about 9.7%/year, organic farming land is still modest.

Many countries want to develop organic agricultural production because of health benefits, economic growth, soil improvement, and living environment (Squalli & Adamkiewicz, 2018). The organic food sector is not achieving its full potential for a variety of reasons. According to consumer studies, the vast majority of people want to buy organic food. However, the number of buyers and regular consumers is still limited. Many other factors influence the transition from purchasing intent to purchase behavior. The majority of customers are suspicious of organic product labels because they distrust the manufacturing and labeling processe (Truong et al., 2021). Because there have been numerous industrial and hygienic scandals, they only trust the players in the organic food chain and the government, emphasizing the need to create confidence and openness in the regulatory process to assure product traceability and safeguard consumer health (Ladwein & Sánchez Romero, 2021). A closed process from the organic production to the hands of consumers must ensure suitable standards.

Scandals in the food industry, changes in food production technology, and increasing obesity in many developed countries lead to the fact that consumers want to know the origin and composition of products (Montecchi et al., 2019). As a result, they are demanding more transparency from manufacturers, retailers, and governments. Consumers’ trust is a decisive factor in purchasing organic food products (Hobbs & Goddard, 2015), which cannot be verified easily (Janssen & Hamm, 2012). Aside from trust, customers are now concerned about the high cost of organic products, which are on average 40% more expensive than conventional items, with prices ranging from 200 percent to 600 percent more in Brazil (Watanabe et al., 2020; Adawiyah et al., 2021). Unavailable goods or inconvenient organic food supply chains will affect the buying behavior of consumers. They have to choose an equivalent product, even though they can afford organic food (Watanabe et al., 2020; Jose et al., 2020; Tandon et al., 2020).

Vietnam is a country with a tradition of agricultural production. However, the area of organic farming is less than 1% of the total agricultural land. Organic vegetables account for most of the farming land to supply daily consumption, resulting in rapid development and high demand in this industry. However, vegetables labeled as organic are tough to control. Being lost in the matrix, consumers cannot distinguish between real and fake organic products (Le et al., 2020a, 2020b; Ngo et al., 2020; Pham, 2020) since they are often 20% to 40% more expensive than conventional ones. Due to the “perturbation” of information on the label about the ingredients and product features, consumers are increasingly confused and suspicious of organic vegetables. The simple issue of standard certifications has also led to confusion in the organic vegetable industry. The inspection policies and sanctions have not been put in place, making this industry grow slower than expected. According to the survey, the main reasons why consumers are not ready to buy organic products include:

• Many organic vegetable products do not possess a legitimate origin, making customers lack confidence in the certification of organic vegetables.

• Lack of convenience when buying organic food.

• The price is too high compared to conventional vegetables.

The northern region of Vietnam has borders with Laos and China, a border gate for trade development with China, especially agricultural products. This study analyzes the market in this area for developing organic vegetable production according to the Organic agriculture development scheme approved by the Government of Vietnam for 2020–2030. Therefore, the authors surveyed consumers in the area on the level of regular consumption of organic vegetables. The survey was conducted for 238 participants with demographic information and filtered out the consumers who had used organic vegetables to assess their perception of price, quality, and trust after consuming. Then, the frequency of organic vegetable consumption and the willingness to pay for the products are evaluated based on their monthly income due to their vital role in developing organic vegetable production in the area. The following hypotheses are tested with the SEM model and simulated with SmartPLS software.

The rest of the paper is structured as follows: Section 2 presents previous studies on organic vegetable consumption and the factors influencing the regular use of organic vegetables. Section 3 introduces the methodology. Section 4 is Data and descriptive statistics. The results will be indicated in section 5 and finally discussion and conclusion in section 6.

2. Literature Review

2.1. The Role of Trust for Organic Food

Food beliefs resulted from the ongoing interaction between various actors, including the production, distribution, monitoring, and consumption (Ladwein & Sánchez Romero, 2021). Scandals in the food industry, changes in food production technology, and increasing obesity in many developed countries make consumers want to know the origin and composition of the products (Montecchi et al., 2019). Consequently, they request more transparency from manufacturers, retailers, and governments (Hamzaoui-Essoussi et al., 2013). Consumers’ trust is a decisive factor in purchasing organic food products (Hobbs & Goddard, 2015; Pham, 2020), which cannot be verified easily (Janssen & Hamm, 2012). Although many people are willing to spend money, they are unsure about whether their products are of the right quality or not (Ha et al., 2019). Purchaser’s trust has an immense impact on the organic market, especially when it is impossible to verify the origin of the product (Ladwein & Sánchez Romero, 2021). Organic certification helps consumers verify the origin of the products and guarantees their quality; However, they can also fake organic certifications.

Therefore, there are problems that require strict management in the organic vegetable market today (Ha et al., 2019). Unlike other products, which mainly provide practical benefits, organic food fulfills the desire to stay healthy. Recent research shows that the most influential drivers of purchase intent and behavior of organic food products are ‘health’ and ‘naturalness’ (Prada et al., 2017; Yazdanpanah et al., 2015). Accordingly, they believe that using organic products ensures their health. The nutritional and mineral content in organic foods is also higher than the conventional, most importantly, choosing the product is to care about the environment. Ensuring customers’ confidence is a critical factor for their continued use of organic foods. (Zagata, 2012; Zhang et al., 2018). Thus, this theory reproduced in the following hypothesis:

H1: Trust in organic vegetables will make customers continue to use the product regularly.

2.2. Perceived Convenience When Buying Organic Food

There is an increasing need to use organic food regularly in family meals. However, the inconvenience in buying is a factor hindering consumers from buying behavior (Baudry et al., 2017). Many consumers are interested in the perceived convenience of organic food since they must choose non-organic food if the product is not accessible in their neighborhood. The present studies have indicated that convenience and price are the main factors influencing consumers’ intention to buy organic food (Chakrabarti, 2010). The study in India found that consumers hesitate to purchase organic food due to price factors and poor accessibility. A Danish case study suggests that it is necessary for the government to actively reform and promote activities that make organic products a convenient option for consumers to encourage the share of organic products in the market (Hjelmar, 2011; Kantamaturapoj & Marshall, 2020; Duong et al., 2021). Basha et al. (2021) indicated that upgrading accessibility to organic food in the supply chains for a majority population increases the products extend beyond supermarkets to smaller grocery stores and boutiques. Three factors, including food quality, convenience, and price, are hypothesized to influence consumer buying behavior (Rana & Paul, 20171). The study of Lee et al. (2020a) mentioned the quality of services that make customers in Korea satisfied and the intention to continue using the online food market. The majority of studies suggested that consumer convenience is a critical factor in determining customer purchasing behavior.

H2: The convenience of buying organic food will make customers consume more often.

2.3. Perceived Price of Organic Food

Consumers’ concerns about organic vegetable production bring environmental friendliness and awareness of its significance to their health. Simultaneously, it creates a positive effect on the willingness to pay for organic products with a higher price than the conventional. (Ha et al., 2019). In Thailand, levels of pesticides and chemical fertilizers exceed the thresholds found in products. Therefore, urban consumers, especially in Bangkok, are willing to pay high prices for certified organic vegetables (Sirisupluxana & Bunyasiri, 2017). Perceived value is a significant factor to promote consumer buying behavior, not related to cost (Watanabe et al., 2020; Adawiyah et al., 2021). It is not only limited to the organic production process but also distributors and retailers (Ladwein & Sánchez Romero, 2021).

H3: Believing in organic vegetables, customers will pay a large amount of income on organic vegetables.

H4: Reasonable prices will make customers consume more often.

3. Methodology

The study carried out survey research on the last five years articles and data on the global organic food market. From there, the author presents a theoretical model. The paper proposes three factors that affect consumer buying behavior, including trust, price, and convenience, to test the proposed hypotheses (Figure 1). The survey was conducted with consumers in northern Vietnam, where the government approved a scheme to develop organic vegetable production, within two months through a questionnaire on Google Survey.

SmartPLS is one of the featured software applications for Partial Least Squares Structural Equation Modeling (PLS-SEM). SmartPLS has gained popularity since its launch in 2005 for its user-friendly interface and advanced reporting features. It is the leading in applying the PLS approach in SEM model estimation (PLS-SEM). Thanks to its intuitiveness and ease of use, the application of the PLS- SEM method contributes to the success of the research.

Figure 1: Theoretical Framework and Research Hypotheses

3.1. Data Collection

The total number of samples taking the survey was 312. After filtering the incorrect questionnaires and incomplete information, the study collected 297 complete surveys to conduct the research. Since this study only focuses on customer buying behavior, it excluded those who have never used organic vegetables from the list. Then, the questionnaires are reviewed to collect 178 surveys who have used and or regularly consumed organic vegetables. The study uses 178 surveys to test the hypothesis of frequent consumption behavior for organic vegetables. Variables to measure include convenience, trust in the origin of organic vegetables, and price. The author used variables for gender, age, education, and the number of family members to understand respondents’ profiles. Eating habits are used to determine whether a family is a vegetarian. The number of family members will affect the spending on organic vegetables because their price is usually 20–40% higher than conventional vegetables.

Table 1: Coding of Question Variables

3.2. Data Analysis

Demographic information, taken during sampling, including data about the name, marital status, age, gender, education level, monthly income, the number of people in the family, the type of food used, has a significant impact on the intention and demand to consume organic vegetables. The variables in question are encoded after collecting, cleaning the data, and removing empty fields. The study then encodes survey questions into variables to assess, which are organized into 04 scales, with 03 scales serving as factors and 01 serving as influence outcomes. The scale of factors includes the perceived trust in organic vegetables (TRUST), the perceived price of vegetables affecting the consumption of organic vegetables (PRICE), and convenience when searching and buying organic vegetables (CONVENIENT), and the resulting scale is people’s consumption behavior (BEHAVIOR). Table 1 below describes the scale and the variables coded from the survey question.

4. Results

4.1. Reliability of The Scale

The study applied the PLS Algorithm function to test the Reliability and Validity parameters of the proposed model. The results are presented in Table 2 below.

The reliability of the scale is assessed by the internal consistency method through Cronbach’s Alpha coefficient. Cronbach’s alpha is a measure of internal consistency, that is, how closely related a set of items are as a group. However, it does not indicate which variables should be removed or kept. The scale is selected when Alpha reliability is greater than 0, 6. Because the Cronbach’s Alpha coefficient of the three variables PRICE, CONVENIENT, and TRUST are all greater than 0.7, it indicates that these three variables are all significant for the hypothetical model. Composite Reliability (CR) ≥ 0.7 is calculated for each unidirectional factor. In this model, CR > 0.8, showing that the model has high reliability. The average variance extracted (AVE), used to measure the convergence between a set of items representing a hidden concept, is a measure of the amount of variance that is captured by a construct in relation to the amount of variance due to measurement error. The AVE of the model is all greater than 0.6, which shows the fit of the variables in the model. R² = 0.578 and χ² = 510, 920, acceptable model. 

Table 2: Reliability and Validity

The outer loading value of the variables is applied to calculate the loading to see whether it fits the model. When evaluating the Outer Loadings measure, if the model’s variables are greater than 0.7, the model is good. If the outer loading is between 0.5 and 0.7, the model is acceptable. In Table 3, the author can remove or accept variable PRICE 1 since the value of variable PRICE1 = 0.675.

Table 3: Outer Loading of Variables

4.2. Collinearity and Multi-Collinearity

The variance inflation factor (VIF) measures how closely one predictor is related to the other predictors in a model. The study used it for diagnosing collinearity and multi-collinearity.

The evaluation of multi-collinearity between variables includes the evaluation of hidden variables and indicators. The assessment of multi-collinearity of indicators is shown in Table 4 below.

Table 4: Outer Variance Inflation Factor of Indicators

Next, the study evaluates the phenomenon of collinearity and multi-collinearity between latent variables. The inner VIF coefficient is used to assess the phenomenon of collinearity and multicollinearity between latent variables. The inner VIF reports a minimum VIF of 1.622 for the inner or structural model, indicating that all VIF values are acceptable.

4.3. Evaluation of Hypotheses

After evaluating the reliability of the hypothetical model, the study evaluates the fit of the model with the hypothesis T-value and P-value, which are used to measure and assess the proposed hypotheses: The values of T-value > 1 and P-value < 0.05 are both acceptable. The evaluation of the model indicated the appropriateness of the hypothesis (Table 5).

Table 5: Measurement of T-value and P-value

5. Conclusion

Several studies have looked at the intention of people to buy organic foods to develop the organic vegetable business (De Canio & Martinelli, 2021; Jäger & Weber, 2020). Many factors influence the process, from the intention to buy organic vegetables to purchasing behavior, including price, which is frequently mentioned in market surveys (Lee et al., 2020b; Basha et al., 2021; Rana & Paul, 2017). However, for those who need to use organic vegetables, the price factor is not a big problem. Instead, it is mainly the convenience of buying and the trust in the origin of the product.

However, the massive development of industrial zones without proper planning and waste disposal has polluted the land, water, and air. This affects the living environment of people, causing many incurable diseases, especially cancer. Hence, the improvement of the living environment and health is presently a top priority. When the development of organic vegetable production and consumption solves both of these major concerns, it creates a win-win situation.

Statistical survey results on consumers in the North of Vietnam indicate that up to 97% of the participants intend to consume organic vegetables in the future. They have not yet used the product because the price is too expensive, or because they do not know where to get it, and they are not convinced by the origin of organic vegetables. The problem of counterfeiting certification stamps, and the accessibility of information about organic vegetables, as well as the sanctions and policies in place to counter counterfeiting organic products, have not been thoroughly investigated and made public.

This study plays a significant role in contributing to the development of organic vegetable production as the demand in the North of Vietnam for organic vegetables accounts for a high proportion. In addition, convenience is the factor that has the most impact on customers’ frequent consumption behavior of organic vegetables. Therefore, it is necessary to develop the supply chains for organic vegetables in the current context. Propaganda and distribution of the health benefits of organic vegetables should also be increased through regional government television channels, as well as the expansion of local chain stores rather than relying solely on supermarkets.