Korea’s agricultural industry has been facing various threats in terms of production and consumption. Imported items have diversified and their import volumes have continuously increased due to, in particular, the acceleration of market opening and growing number of FTAs. This trend causes problems such as intensifying competition in agricultural product markets, declining self-sufficiency rates, shrinking production bases, and stagnant incomes of farm households. On the other hand, the increased inflow of imported agricultural products leads to wider consumer choice, and changes in consumption trends as well as consumers’ varying needs, such as premium quality and variety-seeking, have been further accelerating the expansion of imports.
In response to this situation, many studies on agricultural production and policy have been conducted, but there is a limited body of research on consumption. It is concerning that when facing future imports and market opening, the lack of consumer research on imported agricultural products may fail to provide enough evidence to immediately response to arising problems or steer policy directions, growing awareness on the importance and necessity of research on consumers. It is needed to conduct in-depth studies on consumers related to the purchase of imported agricultural products in order to improve agricultural competitiveness in a situation where imported agricultural products are becoming more diversified.
Accordingly, the first objective of this study is to suggest implications for reviving consumption of domestic agricultural products and improving agricultural competitiveness. Second, it is to present the results and implications on the structural relationship of the determinants of consumer purchasing decisions, such as satisfaction with imported agricultural products and purchase intention, with the aim to contribute to the advancement of consumer research on purchase of imported agricultural products.
In order to achieve the above objectives, this study carried out literature review, consumer survey, and empirical analysis. The design of the study was based on a theoretical foundation established through an in-depth literature review, from which a set of variables were derived with respect to the determinants of purchase of imported agricultural products. The online surveys were conducted from August 26 to September 2, 2020, targeting a total of 1,058 respondents. As the analysis method, Partial Least Squares Structural Equation Model(PLS-SEM) was employed since the model is suitable for a range of causal relationship analysis. The empirical analysis was done through the R statistical program using the plspm package.
The results of the analysis are as follows: First, the factors affecting the satisfaction with imported agricultural products are quality, price, absence of substitutes, and negative psychological response. Second, the factors affecting the purchase intention towards imported agricultural products are quality, price, absence of substitutes, negative perception, and negative psychological response. On the other hand, sales and demographic characteristics (age, income level, educational level) does not have any effect. The results can be further interpreted as below by categorizing the factors into purchase-related, positive, negative, and demographic factor groups, respectively.
It is found that consumers have a positive perception of satisfaction with the purchase of imported agricultural products and purchase intention. Although positive and negative factors are shown together, the study reveals that positive factors have a greater influence when comparing the degrees of affecting factors. The main reasons behind are considered to be consumers’ greater experiences with imported agricultural products through travels to various foreign countries, or increased access to them via broadcasters and SNSs. It is shown that trust and defense mechanisms have been significantly weakened.
On the other hand, taking into account that sales do not affect satisfaction or purchase intention, imported agricultural products are now a normal part of consumption. This shows that consumers’ perceptions are high enough and not affected by sales promotions or advertisements. And the fact that demographic factors have no effect means all consumers are potential consumers of imported agricultural products. As the inflow of imported agricultural products increases, potential consumers can become a key consumer group, and unlike the past behaviors, there is a high likelihood of buying the imported item when choosing between domestic and imported agricultural products.
Therefore, the study developed a set of suggestions as follows for reviving consumption of domestic agricultural products and improving Korea’s agricultural competitiveness. In the future, research on consumption of domestic agricultural products should see a product-specific market as a single market, rather than dividing it into import and domestic, and the strategy should be set to increase market share. In particular, it is necessary to secure and bolster the consumption bases for domestic agricultural products, and efforts should be made to establish a flexible and holistic cooperative system among the governmental bodies, research, related associations as well as producers. To do so, the following suggestions are made in terms of production and distribution and enhancing market competitiveness. First, with respect to strengthening market competitiveness, it is important to form and maintain good quality and reasonable prices of domestic agricultural products rather than focusing on sales (publicity) in order to increase consumer satisfaction and purchase intention. In addition, it is necessary to develop noble varieties and upscale domestic cultivation of foreign varieties that meet consumers’ needs and satisfaction, and consumption trends. Since it is forecast that Korea will transit into a subtropical climate zone due to global warming and extreme weather events, if technologies for growing subtropical crops are developed, synergistic effects can be expected. Second, when steering policy direction, it is necessary to consider not only consumption part but also production and distribution. In response to the inflow of imported agricultural products, it is necessary to engage in activities such as government purchase to maintain a reasonable price; and to help develop policy linkages between related organizations, including the revision of laws and regulations, so that new varieties and related technologies can be widely disseminated. In addition, it is important to ensure consumers’ satisfaction and increase purchase intention by controlling the safety of agricultural products. This can be done by systematically managing the risk factors of not only imported but also domestic products to prevent negative effects in advance.
There is a limited body of consumer research related to imported agricultural products, where this research has its significance by empirically analyzing the preceding qualitative research. The shape of competition between domestic and imported agricultural products has become very diverse, and the markets for imported agricultural products have significantly matured to an extent that comparison between imported and domestic products is meaningless for buying. Yet, it is meaningful to predict social phenomena, even relationships that are commonly sensible in circumstances where consumers’ needs and perceptions can change. In addition, it is expected that the identified determinants of purchase of imported agricultural products from the point of view of consumers can be used as basic data by a range of stakeholders. including distributors, policy makers, and producers. Agricultural products have different standards as consumers’ perception, satisfaction, and purchase intention vary depending on the import country, item, crop, and variety. Future research can identify specific relationships in imported agricultural products by item, country, and item, and present various implications on the results.