Is China’s deteriorating air quality driving increasing online retail sales?
Retail industry leaders gathered at the pre-Congress China focus day at World Retail Congress Asia Pacific 2014 argue the exponential growth could well be driven by China’s notorious air pollution.
In 2013, China overtook US in e-commerce and with more than 500 million mobile users expected to come online this year, 2014 is set to be the year of exponential growth in e-commerce in China.
Increased monitoring of air quality has led to a sharp uptake on awareness about air pollution and its side effects amongst Chinese. This has shaped consumer behaviours in fundamental ways, with a growing trend of consumers choosing to shop online to escape the pollution.
A clear example of this relation is demonstrated by Alibaba, the leading online retail platform in China. The company recorded gross merchandise value worth US$1 trillion in 2012 – this is the highest the company has hit since the platform was launched in 2003 which coincided with one of highest pollution readings in China in that year.
“Consumers are staying home a lot more than going out but that is not to say that consumers are completely focused on shopping online. Shopping in brick and mortar stores continues to be a key past time. Physical retail still makes 60 per cent of all retail sales in China,” said James Roy, senior research analyst, China Market Research Group.
