Online Consumption during Long-term and Normalized COVID-19 Pandemic

Abstract

COVID-19 has attacked consumers’ demands and investors’ confidence in purchasing stocks. This paper studies the impacts of COVID-19 on both China and overseas online shopping. Two models including a VAR and an ARMA-GARCHX model are built in this research. Respectively, the VAR model is utilized to analyze how newly confirmed pandemic cases influence the logarithm of online consumption yield rates, while the GARCHX model is used to study how the pandemic affects the volatility of online shopping. This paper finds that Coronavirus has a subtle effect on online consumption in China in the long term, while a more obvious shock on that overseas. The finding can also become a meaningful inspiration for policymakers and investors. On a national level, Chinese government ought to encourage the development of digital economy and support the online transformation of traditional offline firms. Moreover, the financial investment to improve the logistics system is a necessity. Properly subsidizing low-income groups is also fundamental to maintaining people’s demands and confidence. On a personal level, investors should invest in companies with high financial liquidity and competence in digital innovation like e-commerce companies and online office software. All these fields accord with people’s less time away and more time at home.