Research On The Welfare Effect Of Retailers' Premium Private Labels Based On Minimum Quality Standards

Along with the rise of domestic consumer income level and consumption upgrade,consumers improve their taste for product quality.Some high reputation retailers provide high quality products,such as premium private labels,to meet the market demand and improve their own profit level at the same time.In addition,information asymmetry is one of the main reason of market failure.The degree of market information asymmetry in China's food,online retail and other industries is stronger.Because the number of theses manufacturers is big,and their scale is small,so theses industries have to face the reality of the lack of well-known manufacturers brand,or national brand.For example,in recent years,the cadmium rice,poison ginger and other food safety incidents,as well as the network retail industry product quality substandard events emerge in an endless stream,reflecting China's product quality standards are not strict implemented,product quality is difficult to meet the minimum quality standards.In this paper,we take minimum quality standards and premium private labels into a unified analysis framework to study the interaction between minimum quality standards and premium private labels on easing market information asymmetry so as to improve social welfare.Our research find that,firstly,the level of the minimum quality standard will affect the decision of retailers to launch premium private labels.When the minimum quality standard is low,retailers are more inclined to launch premium private labels.Second,when the minimum quality standard is low,premium private labels can improve social welfare.With the improvement of the minimum quality standard,the effect of premium private labels on the improvement of social welfare is reduced.In addition,when there are more upstream manufacturers,premium private labels may reduce social welfare.Thirdly,the minimum quality standard has an inverted u-shaped influence on social welfare,and the existence of premium private labels make the threshold value of the minimum quality standard slightly lower than the situation of non-premium private labels.The conclusion of this paper has certain reference significance for the development of premium private labels and the formulation of regulation policies.