9805011857551_E1 by xiaohuicaicai


									         High Tech & High Tradition: Chinese Cultural Influences
                   on Poultry Channel Switching
                                                *1                             2                   3
                            Judy F. Chen Clyde A. Warden Jhen Chen
                                The Overseas Chinese Institute of Technology
                                      National Chung Hsing University
                                The Overseas Chinese Institute of Technology

      Modern retailing channels have expanded rapidly and are now widespread in Taiwan. While supermarkets and
hypermarkets appear to dominate Taiwan cityscapes, the combined revenue of all such retailers in 2002 was US$2.2
billion. On the other hand, a retailing channel that is more than six times larger than the widely observed modern
Western/Japanese formats of supermarkets exist in Taiwan. According to statistics from Taiwan’s Ministry of Economic
Affairs, wet markets and street stalls alone generated over US$13 billion in annual sales. Over half of the purchases in
wet markets are made up of meat, seafood, and fresh products. In the specific case of poultry, this combination of ritual
use, emphasis on freshness, and existing convenient retail channels (wet markets) gave consumers the preference for
traditional channels shopping option. Chinese culture may have made some consumption behaviors remain traditional.
Results also act as input to the growing field of cross-cultural consumption theory.

Keywords: Channel, Channel Switching, Grounded Theory, Wet Market, Poultry

      Global food retail giants, such as Wal-Mart, Carrefour, and Tesco are scrambling to reinforce their footholds in the
China food retail market. Credit Suisse research (Garner, 2006) predicts Chinese consumer spending will represent 37%
of US consumption spending by 2014, with annual increases far surpassing the US, making Chinese consumers the
drivers of global economic consumption growth. Shoppers have increased their patronage of Westernized retail formats
from 6% in 2001 to over 10% by 2006. The major players in this segment nearly all enter using the hypermarket format.
Yet global hypermarkets have experienced stiff competition in the neighboring major markets of Hong Kong and
Taiwan. After thirty years of competition, Western supermarket and hypermarket formats have yet to lay claim to
victory. Assumptions that consumers “modernize” may be costly optimism. Goldman (2001) implicated lack of
localization in the withdraw of Ahold and Park and Shop from China and Taiwan. Since then, Wal-Mart has withdrawn
from Korea and Tesco from Taiwan. Carrefour, the leading Western hypermarket in China, has been unable to obtain a
serious competitive position in the fresh food sector in Hong Kong or Taiwan (Ho, 1999; Ho, 2005). This challenge is
deeply based on habits and rituals surrounding food consumption analogous to language in their core cultural roles
(Mintz, 2002). Food purchasing is the vocabulary of that language and Chinese cultural settings presents a unique
opportunity to understand how culture influences channel selection.
      When viewing food retail in the Greater China region, assumptions of modernity have dominated research and
retail approaches, with Western models assumed to be future destinations for developing retail formats. The conclusion
often reached is that traditional wet markets cater to an older demographic and that future trends will lead to their
demise (Goldman, 2000; Lo, Yan, & Li, 1986; Mai & Zhao, 2004; Shiu & Dawson, 2001; Trappey, 1997; Veeck &
Burns, 2005; Yavas, Kaynak, & Borak, 1981). By examining the specific food category of poultry, the second most
consumed meat in the Chinese diet, we examine the powerful role of Chinese culture in channel choice.
                                               LITERATURE REVIEW
      Super/hypermarkets in 2002, including Wellcome, Auchan, Tesco, Costco, Makro, and Carrefour, reported sales of
US$2.2 billion in 2002 (Hsueh, 2003; Huang, 2004), while Taiwan’s Ministry of Economic Affairs reported wet markets
and street stalls alone generated over US$13 billion in annual sales. Fruit exports from the US took advantage of this
traditional retail channel in the mid 1980s by selling produce through wholesalers who supplied wet markets, where
over 55% of imported fruit was bought in 2002 (Hsueh, 2003). Over half of the purchases in wet markets are made up
of meat, seafood, and fresh produce. In the specific case of poultry, consumers have had both local and global shopping
      On Chinese lunar holidays, prayers to ancestors have been a requirement in Taoist tradition. These prayers (baibai
in Mandarin Chinese,«ô«      ) must be accompanied with food and drink, which is then used as the family meal. Baibai
ceremonies in Taiwan are most often carried on by the eldest surviving son, thus, younger age market segments would
have little reason to visit a wet market, as they aged, however, the likelihood of doing so greatly increases. Sutton (2003)
found that rather than shrinking, religion in Taiwan is widespread even in the midst of the ultra modern, “For every
Western-educated couple who acquired a god’s image as an art object there seemed to be a family who turned the top
floor of their house into a shrine for a particular god” (p.291). We observed that few shoppers bought exclusively from
one retail channel, but rather shopped in a number of locations, mixing retail channels. Consumers exhibited different
consumption behaviors based on their needs. As shown in Figure 3, in the wet markets, shoppers often bought chickens
in the morning where the stand owner would chop up the chicken to the consumer’s individual special needs.
Supermarkets echoed this by supplying whole chickens and parts. These observations lead to our first hypothesis:
            H1: Experienced Taiwan poultry consumers easily switch retail channels, buying from both wet markets and
      Wet markets in Chinese culture are associated with religious activities that can be traced back to the early 1600’s.
Wet markets are still found near or around temples. In 2003, there were over 11,000 temples in Taiwan, most of which
maintain some form of retail activities around them (Shiu & Dawson, 2001). Traditional customs of burning paper
(spirit) money to gods, ghosts, and ancestors, and offering fruit, drinks, chicken, fish, pork and sweet offerings is
commonly practiced today. Worshippers are inspired by the hope of rewards for good works, facing an examination,
entering military service, fear of retribution, vows to repay a request granted, or by the half believer’s momentary
thought of extra insurance or good luck (Sutton, 2003). Most common, however, is the practice of ancestor worship.
Generally, people included chicken as one of the principal offering in Taoist baibai rituals. This leads to our second
            H2: Experienced Taiwan poultry consumers purchase chicken more from wet markets than supermarkets
       when involved in religious rituals.
      Wet markets date back to Han Dynasty (202 BCE-220 CE), reaching their current form as early as Tang (618-907
CE), occupy one or more floors and are located in the open air or under a roof, ranging from several hundred pings (1
ping = 3.3 square meters) to a few thousand pings, containing numerous independent sellers at stalls of various sizes
(Shiu & Dawson, 2001). These markets are located within a short distance of nearly any residential area. For consumers,
buying directly from wet markets was interpreted as a healthier, cheaper, more diverse source of food (Mueller &
Edmondson, 1988).
      Compared to wet markets, supermarkets have attempted to create a shopping environments to fulfill the total
shopping needs of customers (Hsu & Chang, 2002). Our explorations of these two retail channels found both locations
offered numerous non-food items. Wet markets offered clothing, shoes, fortune telling services, blemish removal (skin
treatment) services, religious paraphernalia, and numerous other goods that could be used throughout the day, while
Supermarkets and hypermarkets have adapted by catering to religious holidays and offering complete packages of food
and paper spirit money used in baibai rituals. These offerings can include whole chickens in a complete, ready to go,
ritual package sealed in plastic and chilled. Thus, wet markets and supermarkets may have some similarity in attempting
to satisfy local needs, however, there still were fundamental differences, leading to our last hypothesis:
            H3: When shopping for poultry, Taiwan consumers perceived wet markets and supermarkets as having
       different advantages.
      Taiwan presents an excellent sample frame when studying retail development within a Chinese cultural setting.
Consumers in Taiwan exhibit highly similar lifestyle and culinary habits to their PRC counterparts. While China’s retail
landscape is rapidly developing, held back for political reasons, Taiwan’s has reached maturity and can present a case
study for the future of China’s retailers. Taiwan consumers continue shopping in wet markets, rather than supermarkets,
for daily food consumption as do Beijing (Mai & Zhao, 2004) and Shanghai shoppers (Goldman, 2000). Hypermarket
leader, Carrefour has used Taiwan (currently over xxx stores) as a learning platform for their China operations, often
moving experienced managers from Taiwan to China.
      A survey instrument was developed out of existing literature and field observation that grounded questions in local
consumer behavior and retailing context. Purchase location frequency and correlation analysis were used in
understanding switching behavior and the relationship to religious rituals. The more complex question of what
consumers found different in the two channels was answered by first defining expectations of shopping attributes and
then measuring actual experiences in both channels. Canonical correlation was used to reveal the strongest relationships
between numerous expectations and perceptions of actual shopping experiences.
      Twenty questions were included covering retail features related to servicescape, asked once for the
super/hypermarket setting and once for the wet market setting. Given the context of the study, the local Chinese cultural
emphasis on an exciting and busy servicescape, locally referred to as renao (Warden, Huang, Liu, & Wu, 2007), was
included. In-store design research has emphasized helping customers relax with such devices as music, low crowding,
convenient floor, sanitation (Bruner, 1990; Corstjens & Doyle, 1983; Curhan, 1973; Doyle & Gidengil, 1977; Eroglu &
Machleit, 1990; McGrath, 1989; Milliman, 1982, 1986; Yalch & Spangenberg, 1990). Also included were questions
related to moisture (wetness), odors, and temperature (nine questions in total). The remaining eleven questions, in this
section, targeted specific differences between the two poultry shopping channels consumers expressed during initial
field interviews. These questions included bargaining opportunities, food packaging, retailer familiarity, personal
service, non-food items (conveniently located nearby), ordinary and special meal supplies, and poultry availability
suitable for ritual use.
      A total of nineteen questions were include to measure demographics consistent with the household production
approach (Betancourt & Gautschi, 1986; Hoch, Kim, Montogomery, & Rossi, 1995), including opportunity cost of time,
the ability to transport, and store food.
     The online survey was conducted for one week in December 2004. Participants were drawn through online
advertisements placed on two portals in Taiwan: Yam, Goolu.com (a cooking site). These portals were known to attract
high rates of female viewers with families, especially the cooking site, matching the target demographic of experienced
poultry buyers. Visitors to the website totaled 438. Responses were screened for accuracy and consistency in answering
the 8 knowledge questions as well as checking for time spent online completing the survey and response pattern.
Anyone unable to correctly answer 4 out of 8 knowledge questions, who completed the survey in less than 5 minutes, or
who answered all questions the same or with missing or incomplete data, was eliminated. Total remaining responses
numbered 324. The mean age of respondents was 30 years old while 71% were females. The marriage status of
respondents was 39% married. In the sample, 80% of respondents had over a junior high school education, with 52% of
respondents having a job, and 10% full time home keepers. This response rate confirmed the intended bias toward those
actually buying and cooking poultry was successful, as females perform the majority of cooking in Taiwan. In 1987,
women in Taiwan spent an average of 3 hours more than men on housework, with over 72% of women doing
housework, while only 30% of men do their share (R.O.C. Directorate General, 2003).
     Reliability for the overall survey questions exhibited a Cronbach’s alpha of .9 and a Guttman split-half alpha of .71.
Overall, t-tests showed respondents considered wet market poultry to be better quality (t = 15, p < .001), lower price (t
= 10.28, p < .001), fresher (t = 17.69, p < .001), and a better value (t = 14.11, p < .001). This did not, however, bias
purchases toward the wet market. The monthly mean number of wet market purchase ( X = 2.37, SD = 2.86) and
supermarket purchases ( X = 2.39, SD = 3.97) of chicken parts was not statistically significantly different using a
paired t-test. However, a significant difference was found (t = 3.73, p < .001) when comparing whole chicken wet
market purchases ( X = 1.28, SD = 1.66) to supermarket purchases ( X = .93, SD = 1.33). Thus, Hypothesis H1
(Experienced Taiwan poultry consumers easily switched retail channels, buying from both wet markets and

supermarkets) is supported in the case of chicken parts but not for whole chickens, where there was a clear preference
for the wet market. Chicken purchased for use in BaiBai ceremonies was more frequently purchased from wet markets
( X = 3.76, SD = 1.43) than supermarkets ( X = 2.63, SD = 1.43), statistically significantly different (t = 12.51, p
< .001), supporting Hypothesis H2 (Experienced Taiwan poultry consumers purchase chicken more from wet markets
than supermarkets when involved in religious rituals).
      Canonical Correlation
      In order to better understand the relationships between the shopping attribute importance and the actual
experiences of wet markets and supermarkets, canonical correlation analysis was undertaken. This procedure assesses
the relationship between multiple independent variables and multiple dependent variables (Hair, Anderson, Tatham, &
William, 1995). Unlike multiple regression techniques, which measured the predictive ability of a single dependent
variable from a set of multiple independent variables, canonical correlation assessed the predictive power of numerous
dependent variables from multiple independent variables. In the analysis, we examined the relationship between
self-reported importance factors (predictor set) and the reported perception factors (criterion set) (see Figure 1).
                                                                                       Attribute perceptions

                                                                       (purchase from the same person, purchase from the

                                                                                                                             Wet market
                   Attribute importance                                  same stand, and talk a stand owner like a friend)

                        Cleanliness                                        Cleanliness (cleanliness, and sanitation)
                                                            . 94
                   (cleanliness, sanitation,                    9
                     and food packaging)       .16            .1                       Non-food items
                                                              .21        (background music, and variety for non-food)
                           Social                           .44
                                               .99                             Point-of-purchase promotion

                  (purchase from the same                                 (provide culinary information to consumers,
                    person, and purchase
                                                            .3 1

                                                                       bargain with stand owner, and talk to stand owner
                    from the same stand)                                                  like a friend)
                                                                           Cleanliness (cleanliness, and sanitation)

                       Figure 1. Canonical correlation of attribute importance and attribute perceptions
     As shown in Table 1, the attribute importance of social exhibited the strongest loading (.99) while the attribute
perception the wet market’s social attribute showed the highest loading (.94).
                        Table 1. Attribute Importance and Attribute Perceptions Canonical Correlation
                                                                      Canonical Correlation Function 1
                        Attribute                    Raw. Coeff.      Stand. Coeff.     Loading Cross Loading
      Attribute importance
      The cleanliness factor                              .16              .16                .16        .09
      The social factor                                   .99              .99                .99        .55
      Attribute perceptions
      The social factor in wet market                     .93              .93                .94        .52
      The cleanliness factor in wet market                .16              .16                .19        .11
      The non-food items factor in wet market             .04              .04                .21        .12
      The social factor in supermarket                    .24              .24                .44        .25
      The cleanliness factor in supermarket               -.07             -.07               .31        .17
      Chi-squared                                         159.2
      p                                                   < .001
      Canonical correlation                               .55
     Perception of the supermarket’s social attributes did show a positive loading (.44). Field observations found the
common use of POP displays, often explaining product benefits, along with DM. Another common practice in Taiwan
supermarkets is samples supplied by product representatives who have knowledge about the product and are often older
females, matching shopper demographics. This is even carried to the point of independent stands that give the
appearance of the wet market.
     Respondents clearly pointed out the lack of reciprocity in the supermarket setting and the lack of
one-stop-shopping in the wet market, rather than simply classifying each location as the mirror of the other, i.e., while
super markets were perceived as clean, wet markets were not unclean, and while wet markets offered more reciprocity,
supermarkets were not perceived as cold and inhuman. Ho and Lau (1988) observed these differences in Hong Kong,
during the 1980s. Since then, both channels have attempted to adapt by providing complimentary services. Outside of
the hardcore dedicated shoppers, our respondents exhibited an openness to shop at both locations, and the specific case
of poultry may be a good indicator of when and how such a choice is made.
     In Chinese culturally influenced societies, consumers prefer shopping at the wet market for fresh food (Hsu &
Chang, 2002). Even in Taiwan’s highly populated and dense metropolitan areas, wet markets still exist within a short
distance of residential area. Although supermarkets and hypermarkets have attempted to satisfy consumers’ demands for
freshness, shoppers still perceive the wet market as superior in some ways (Ho & Lau, 1988; Veeck & Burns, 2005).
This has presented a serious competitive challenge to supermarkets and hypermarkets (Hsu & Chang, 2002).
      Based on our field observations and statistical results, we propose an explanatory framework for poultry channel
switching in a Chinese cultural setting that is based on a hierarchy of social consumption meaning (see Figure 2). Social
importance represents ritual meaning. Higher social importance implies higher ritual importance and/or familial related
consumption (keep in mind that any poultry used in baibai ritual will also be consumed—normally in family gatherings).
Frequency of purchasing fresh chicken might also be lower as such Taoist baibai requirements are based on the lunar
calendar (on average 2 times a month) in addition to social occasions, such as family gatherings or extended family
visits, occurring infrequently but regularly. Thus, the hierarchy narrows at the top representing a potential for smaller
purchase frequency, while there is little room for deviation (fresh, whole chickens are a requirement for such occasions).
Fresh chicken parts may be bought easily at the wet market, but also at the super market, depending on the situation.
      When using chicken in ordinary daily consumption, or in non-social settings, shoppers tend to buy chilled/frozen
whole chicken or chilled/frozen chicken parts (not obtainable in the wet market). Such poultry addresses normal daily
needs that can include storage. Supermarkets cater to this higher processed poultry demand by offering popular chicken
nuggets, for example.
      Social importance thus infers purchasing location choice. At times of ritual, social, or traditional consumption,
there is a tendency to buy from low processing purchasing location (wet market) because the social and ritual emphasis
is on freshness. Shoppers visiting the wet market during this time can also obtain poultry that fits their exact needs, as
well as obtain advice on culinary preparation (the social aspect of wet market shopping). Daily or non-social
consumption, such as eating alone or making a quick meal, opens the opportunity to purchase more processed poultry
that is offered at the supermarket and hypermarket. Such a purchase can ease preparation time as well as combine other
household shopping needs.
                                                   Ritual Consumption                  Low Processing
                                                                                         (Wet Market)

              Social                                  Fresh Parts                                Retail Channel
            Importance                                                                            Preference

                                                Chilled/Frozen Parts

                                               Personal Consumption              High Processing
                                     Figure 2. Pyramid of Chinese Chicken Consumption
      Efforts to standardize and sanitize wet markets in Taiwan have met with great resistance. The current data shows
that shoppers have a relative perception of cleanliness, which is applied depending on the shopping context. When in
search of the all important fresh whole chicken, a hot, open, and crowded wet market is not perceived as unclean. Thus,
wet markets may attempt to improve their offerings of non-food items, while building on their competitive advantage in
the social area—able to be consistently available for customers, offer advice, and even bargain. In Hong Kong, Ho and
Tang (2006) note the success of superstores in co-opting wet markets by incorporating them into stores through direct
employment or leasing stall space. Clearly, within the cultural context, it is vital to understand key factors of specific
channel choices.
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