How Korean Retailers Expand Private Label Markets Abroad: Evidence from the Chinese Fresh Food Market

Abstract

Purpose - The increasing share of Korean private label products (PLPs) in the domestic market helped generate lucrative revenue. In recent years, major South Korean retailers have begun to cast their sights on overseas markets and actively export their PLPs. In China, the proportion of private label fresh food (PLFF) is gradually expanding amid the development of the new retailing model. A profound understanding of the relationship between private label fresh produce and purchase intention may be the answer to helping Chinese retailer private labels expand supply chains in Korea. This study, taking Chinese retailers as an example, examines the impacts of selection factors of private label fresh food and perceived value on purchase intention. Apart from that, the relationship between the selection factors and purchase intention will be analyzed with perceived value as a mediator. Design/methodology - This work aims to empirically analyze the purchase intention of private label fresh food using statistical analysis. In this study, a hypothetical causal model consisting of 6 latent variables and 24 measured variables is developed based on the literature review. To validate the research hypotheses and the research model, SPSS23.0/AMOS23.0 is used to analyze factors such as validity and reliability, as well as structural equation modeling. Findings - The hypothetical model established in this study is of general applicability. In respect to PLFF, perceived value, while significantly influencing purchase intention in combination with four selection factors (perceived quality, perceived price, brand trust, and store image), mediates partially between the first three factors and purchase intention, which rules out the impact and mediating effect of store image on purchase intention. Originality/value - These research results, as helpful insights into the present circumstances of Chinese PLFF in the domestic market, provide useful information and guidance for Korean retailers and service providers to innovate production and service, as well as develop marketing and promotion strategies, so that they can shift private label goods with advantages from domestic demand to export, thus increasing overseas profitability. Further, this work will also contribute to relevant research.