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Impact of COVID-19 on offline • Impact on consumption traced over
consumption. 12 weeks.
According to this research, daily offline On average, the sampled cities experienced
consumption — via bank card and mobile QR accelerated decline in consumption for the first
code transactions — fell, on average, by 18.57 4 weeks and gradual recovery starting in the
million RMB per city during the post-outbreak second month. More specifically, a city’s offline
period relative to the baseline period in 2019. The consumption fell by 6.6% on average during the
214 cities in the sample witnessed a statistically immediate week after Wuhan’s lockdown before
significant 32% decline, or 329.84 billion RMB reaching the largest decline (59–66%) in the next
decrease, in offline consumption during the 12- 3 weeks after the outbreak. Starting from the
week period compared to 2019. fifth week, the pandemic curve showed signs
of flattening, and by the end of March (week 9),
UnionPay captures 30% of China’s offline consumption had fully rebounded. However,
consumption, and the 214 cities cover 90% consumption fell again, to 20% and 16% below
of China’s urban population. From this, the the baseline level, in the first 2 weeks of April
researchers further deduced that China’s offline (weeks 10–11). This retreat, researchers suggest,
consumption declined by 1.22 trillion RMB during echoed the rising concerns over a potential
the entire 12-week period. The country’s total second wave of infections.
GDP in 2019 was 99.1 trillion RMB. As such, they
infer a loss of approximately 1.2% of China’s 2019 • A severe hit.
GDP from declining offline consumption during The raw data from this research demonstrates
this post-outbreak period. that China’s offline consumption took a severe
hit due to the pandemic outbreak, resulting in
• Online consumption. a loss of approximately 1.2% of China’s 2019
To account for the possibility that consumers GDP in the 12-week post-outbreak period. This
may have substituted online shopping for offline research further suggests that during the first
consumption, the research team also analyzed few months of the outbreak, the drop in offline
the online spending data captured by ChinaPay consumption was highly sensitive to day-to-day
(held by UnionPay). They provide a coarse pandemic severity relative to the less frequent
estimate of 13% decline in online spending in changes introduced by disease control measures,
response to the COVID-19 outbreak during the income shocks, or supply disruptions. The unease
12-week period. Given that offline consumption provoked by the pandemic during the first few
constitutes 76% of China’s total consumption, the months directly impacted people’s willingness
researchers further infer that total consumption to consume, rendering a significantly negative
(both offline and online) in China declined by 27% impact on China’s economy.
in the 12 weeks after the outbreak.
Impact of COVID-19 on offline consumption Daily offline consumption since Wuhan lockdown
SOUTH CHINA BUSINESS JOURNAL 22
consumption. 12 weeks.
According to this research, daily offline On average, the sampled cities experienced
consumption — via bank card and mobile QR accelerated decline in consumption for the first
code transactions — fell, on average, by 18.57 4 weeks and gradual recovery starting in the
million RMB per city during the post-outbreak second month. More specifically, a city’s offline
period relative to the baseline period in 2019. The consumption fell by 6.6% on average during the
214 cities in the sample witnessed a statistically immediate week after Wuhan’s lockdown before
significant 32% decline, or 329.84 billion RMB reaching the largest decline (59–66%) in the next
decrease, in offline consumption during the 12- 3 weeks after the outbreak. Starting from the
week period compared to 2019. fifth week, the pandemic curve showed signs
of flattening, and by the end of March (week 9),
UnionPay captures 30% of China’s offline consumption had fully rebounded. However,
consumption, and the 214 cities cover 90% consumption fell again, to 20% and 16% below
of China’s urban population. From this, the the baseline level, in the first 2 weeks of April
researchers further deduced that China’s offline (weeks 10–11). This retreat, researchers suggest,
consumption declined by 1.22 trillion RMB during echoed the rising concerns over a potential
the entire 12-week period. The country’s total second wave of infections.
GDP in 2019 was 99.1 trillion RMB. As such, they
infer a loss of approximately 1.2% of China’s 2019 • A severe hit.
GDP from declining offline consumption during The raw data from this research demonstrates
this post-outbreak period. that China’s offline consumption took a severe
hit due to the pandemic outbreak, resulting in
• Online consumption. a loss of approximately 1.2% of China’s 2019
To account for the possibility that consumers GDP in the 12-week post-outbreak period. This
may have substituted online shopping for offline research further suggests that during the first
consumption, the research team also analyzed few months of the outbreak, the drop in offline
the online spending data captured by ChinaPay consumption was highly sensitive to day-to-day
(held by UnionPay). They provide a coarse pandemic severity relative to the less frequent
estimate of 13% decline in online spending in changes introduced by disease control measures,
response to the COVID-19 outbreak during the income shocks, or supply disruptions. The unease
12-week period. Given that offline consumption provoked by the pandemic during the first few
constitutes 76% of China’s total consumption, the months directly impacted people’s willingness
researchers further infer that total consumption to consume, rendering a significantly negative
(both offline and online) in China declined by 27% impact on China’s economy.
in the 12 weeks after the outbreak.
Impact of COVID-19 on offline consumption Daily offline consumption since Wuhan lockdown
SOUTH CHINA BUSINESS JOURNAL 22
