Tianjin, China’s fifth largest city, suffers from severe environmental problems due to a high prevalence of plastic bag usage. This problem occurs in China’s other major cities as well. On June 1, 2008, a law requiring large retail stores in China to charge for bags was enacted in an attempt to curtail plastic bag consumption. As a result, many plastic bag manufacturing plants were closed. However, because of the wide-spread usage of plastic bags, they are still being manufactured and consumed. It is possible that the current plastic bag cost of 0.3 CNY is too low to change customers’ consumptive behavior. The purpose of this study is to explore people’s attitudes regarding the substitution of plastic bags with bags made from alternative materials, and their willingness to pay for such substitutes. This study used a conjoint choice experiment to measure Tianjin residents’ preferences for degradable and non-plastic materials bags. The results show that most people do not like non-degradable plastic bags and would use bags made of other materials if they were sold at a reasonable price. Based on the latent class and socio-demographic segmentation results, there are preference distinctions among age groups. Also, there are niche markets for paper, cloth, and degradable plastic bags where costs are of a lesser concern in consumer decisions. Manufacturers can use this information to more efficiently manufacture appropriate bags for different markets. This will help maximize revenue while continuing to meet demands.