Spatial Diffusion of E-Commerce in China’s Counties: Based on the Perspective of Regional Inequality

Abstract

In recent decades, China has been on a new journey toward a digital economy of which e-commerce accounts for a substantial proportion. Despite some controversy, the innovation diffusion hypothesis and efficiency hypothesis of online shopping have been tested in research on the urban–rural dual structure. However, research on the spatial diffusion model of online business is sparse. Based on the online business and online shopping index released by the Ali Research Institute, this article compares the spatial diffusion model of online shopping and online business in the core–periphery structure based on the inequality between the eastern and western regions of China. Our study suggests that online business trends are in line only with the innovation diffusion hypothesis, with marginal counties having lower levels of online business. Online shopping, on the other hand, is in line with the innovation diffusion hypothesis and partially with the efficiency hypothesis, with a higher index of online shopping in the core regions and some peripheral counties. The discrepancy in the spatial diffusion mode is due to the differences in aims and supporting elements between online business and online shopping. Apart from infrastructure, the diffusion of online business is largely constrained by the regional industrial base, while online shopping is influenced by income and savings levels, which is the main reason for the differences in the spatial diffusion of online business and online shopping. We argue that the diffusion of online business has not led to the ability to balance regional inequalities at the national scale, while online shopping has the potential to bridge core and peripheral disparities better than online businesses, not in terms of the ability to bridge economic disparities, but in terms of the potential to reduce spatial consumption inequalities and welfare gains.