Offline Versus Mobile Commerce: Implications for Inequality of Accessing Local Retail Infrastructure in Emerging Markets

Abstract

There exists large geographic variation in the distribution of local retail establishments in emerging markets. With the rapid development of the mobile internet in recent years, consumers in underdeveloped markets have gained access to mobile shopping. This paper examines whether the usage of mobile commerce apps is affected by the accessibility of local offline retailers. Using a unique dataset of individual-level mobile apps adoption and usage behavior, and real-time location information across 1679 counties in China, the authors find that the consumers with lower access to retail outlets spend more time and make more purchases through mobile commerce apps. Such substitution effect between mobile commerce and local retailers is stronger for consumers with (1) lower mobility and (2) higher digital literacy. The findings suggest that in an emerging market with large variation in accessibility of local services, the mobile service has the potential to mitigate the inequality of accessing physical retail infrastructure. The results provide important implications for policy makers and mobile marketing managers.

Keywords: mobile internet, emerging market, mobile commerce, digital divide

JEL Classification: M15, M31