Impact of COVID-19 pandemic on online consumption share: Evidence from China's mobile payment data

Yanyan Xiong, Xue Cui and Liuming Yu

Journal of Retailing and Consumer Services, 2024, vol. 81, issue C

Abstract: This study investigates the impact of the COVID-19 pandemic on the online retail market in China and explores the mechanisms underlying this relationship. By developing a theoretical model based on utility theory and consumer risk perception theory and utilizing monthly mobile payment consumption data along with the number of people diagnosed with COVID-19 at the city level in 2020, this study finds that the COVID-19 pandemic has driven an increase in the share of online consumption, thereby changing the structure of the retail market. The primary mechanism is that the pandemic boosts e-commerce activity while concurrently reducing the service quality for consumers shopping offline. Furthermore, this study confirms that online consumption has mitigated the negative impact of the pandemic on overall consumption expenditure. Heterogeneity analyses suggest that the COVID-19 pandemic has significantly increased the online share of necessity and upgraded consumption. For city heterogeneity, the effects of the pandemic on online and offline consumption structures are more pronounced in regions with larger consumption scales and lower urbanization rates. Thus, the pandemic has accelerated the development of the online retail market and strengthened consumer inertia for online channels. According to consumer inertia theory, this trend may continue even as the pandemic gradually weakens. The applicability and effectiveness of this study's conclusions and methods provide a new perspective for future research on online retail and e-commerce markets.

Keywords: COVID-19; Online consumption; Mobile payment; E-Commerce; Retail market; Consumer inertia (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0969698924002728
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:81:y:2024:i:c:s0969698924002728

DOI: 10.1016/j.jretconser.2024.103976

Access Statistics for this article

Journal of Retailing and Consumer Services is currently edited by Harry Timmermans

More articles in Journal of Retailing and Consumer Services from Elsevier
Bibliographic data for series maintained by Catherine Liu ().