DIGITALIZATION OF SMALL AND MEDIUM RETAIL ENTERPRISES AFTER COVID-19 PANDEMIC: THE CASE OF CHINA AND RUSSIA
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Introduction 1
Chapter I. Small and medium retail enterprises during the pandemic in China and Russia3
1.1. Small and medium retail enterprises during the pandemic in China 3
1.2. Small and medium retail enterprises during the pandemic in Russia 13
1.3. Evaluation of relevant policies and measures in China and Russia 21
1.4. Concepts and peculiarities of digital transformation 27
Chapter П. Data analysis and recommendations 32
2.1. Questionnaire design 32
2.2. Data research 34
2.3. Policy recommendations 45
Conclusions, limitations and exceptions 58
References 60
Appendix 67
Chapter I. Small and medium retail enterprises during the pandemic in China and Russia3
1.1. Small and medium retail enterprises during the pandemic in China 3
1.2. Small and medium retail enterprises during the pandemic in Russia 13
1.3. Evaluation of relevant policies and measures in China and Russia 21
1.4. Concepts and peculiarities of digital transformation 27
Chapter П. Data analysis and recommendations 32
2.1. Questionnaire design 32
2.2. Data research 34
2.3. Policy recommendations 45
Conclusions, limitations and exceptions 58
References 60
Appendix 67
It has been one and a half years since Wuhan, Hubei Province reported the first batch of COVID-19 cases in December 2019. However, the spread of COVID-19 around the world has not been effectively controlled but has become more serious. COVID-19 is the third highly pathogenic human coronavirus disease to date, the rapid spreading of this highly contagious disease has posed the severest threat to global health in this century [Hu et al., 2021]. There is no doubt that COVID- 19 pandemic is the most serious global public health crisis in the 21st century [Bagchi et al., 2020]. It has caused tremendous damage to the development of human society in the entire world. As for August 4, 2021, more than 200 million people have been infected and over 4 million people unfortunately passed away because of this formidable virus all over the world1 2.
As the first country, which be severely hit by the COVID-19 pandemic, however, China has effectively prevented the spread of the virus in a short period of time and brought the pandemic under control. The number of newly confirmed cases in a single day reduced from 13726 on February 12 to 7 on May 12 in 20202 . It benefits by the rapid response and powerful control measures of the Chinese government. Chinese government have established strong command-and- control mechanisms, several provinces and cities entered the wartime state, implemented closed management in areas with severe epidemics, used big data technology to track patients’ trip to control the source of infection [Cheng et al., 2020].
But across the world, due to the different political systems and different senses of worth in different countries, the attitudes and methods adopted by governments and people to the Covid-19 pandemic were also different. This has led to the fact that the pandemic has not been effectively controlled globally, and the number of new diagnoses and deaths per day remained high for a long time.
In addition to human health and security, the pandemic has also caused a serious social- economic crisis [Brodeur, et al., 2021]. As the two powers in the world, the economic development of China and Russia both encountered great challenges during the pandemic: in the first quarter of 2020, China’s GDP was only 3.17 trillion U.S. dollars, a year-on-year decrease of 6.83. and Russia's GDP in 2020 is 1.5 trillion U.S. dollars, a year-on-year decrease of 3%4. So, the impact of the pandemic on both China and Russia is huge.
The economic crisis has also dealt a serious blow to enterprises. Since the government implemented strict quarantine measures at the beginning of the outbreak, employees and consumers were restricted from activities, many enterprises have to face the situation including reduced production and demand and supply chains disruption [Kraus et al., 2020]. Chinese and Russian companies are also facing these issues. This has caused a sharp decrease in corporate income, and many companies need to face the problem of bankruptcy or layoffs.
In the face of unavoidable crises, large enterprises can still rely on their strong financial resources and huge size to support the epidemic to be completely controlled. But for small and medium enterprises, this is a daunting challenge. And in all industries, due to supply disruptions and reduced customer demand, the retail industry has naturally become one of the industries that have been hit hardest during the epidemic.
The main goal of this study is to provide recommendations concerning possibilities of digital transformation of small and medium retail enterprises in post-pandemic economies in China and Russia. The following questions will be the cure of this research: RQ (1): Which policies the Chinese and Russian government has adopted to help and support small and medium retail enterprises during the pandemic; RQ (2): What is the public’s attitude of small and medium retail enterprises or stores and online shopping; RQ (3): How may the Chinese and Russian governments guide the digital transformation of small and medium retail enterprises in the future? In addition, this article also describes a survey of the population in specific regions of China and Russia, from which more useful information can be obtained.
This article has a certain contribution to future research. First of all, this is one of the few articles that studies the difference of retail industry during the pandemic between China and Russia, which can better understand the relevant measures and consumer behaviors taken by the two countries. Secondly, this article gives some insights and measures on the future digital transformation support of small and medium retail industry for the reference of the government and related enterprises, and it is beneficial to promote the development of small and medium retail enterprises in China and Russia.
As the first country, which be severely hit by the COVID-19 pandemic, however, China has effectively prevented the spread of the virus in a short period of time and brought the pandemic under control. The number of newly confirmed cases in a single day reduced from 13726 on February 12 to 7 on May 12 in 20202 . It benefits by the rapid response and powerful control measures of the Chinese government. Chinese government have established strong command-and- control mechanisms, several provinces and cities entered the wartime state, implemented closed management in areas with severe epidemics, used big data technology to track patients’ trip to control the source of infection [Cheng et al., 2020].
But across the world, due to the different political systems and different senses of worth in different countries, the attitudes and methods adopted by governments and people to the Covid-19 pandemic were also different. This has led to the fact that the pandemic has not been effectively controlled globally, and the number of new diagnoses and deaths per day remained high for a long time.
In addition to human health and security, the pandemic has also caused a serious social- economic crisis [Brodeur, et al., 2021]. As the two powers in the world, the economic development of China and Russia both encountered great challenges during the pandemic: in the first quarter of 2020, China’s GDP was only 3.17 trillion U.S. dollars, a year-on-year decrease of 6.83. and Russia's GDP in 2020 is 1.5 trillion U.S. dollars, a year-on-year decrease of 3%4. So, the impact of the pandemic on both China and Russia is huge.
The economic crisis has also dealt a serious blow to enterprises. Since the government implemented strict quarantine measures at the beginning of the outbreak, employees and consumers were restricted from activities, many enterprises have to face the situation including reduced production and demand and supply chains disruption [Kraus et al., 2020]. Chinese and Russian companies are also facing these issues. This has caused a sharp decrease in corporate income, and many companies need to face the problem of bankruptcy or layoffs.
In the face of unavoidable crises, large enterprises can still rely on their strong financial resources and huge size to support the epidemic to be completely controlled. But for small and medium enterprises, this is a daunting challenge. And in all industries, due to supply disruptions and reduced customer demand, the retail industry has naturally become one of the industries that have been hit hardest during the epidemic.
The main goal of this study is to provide recommendations concerning possibilities of digital transformation of small and medium retail enterprises in post-pandemic economies in China and Russia. The following questions will be the cure of this research: RQ (1): Which policies the Chinese and Russian government has adopted to help and support small and medium retail enterprises during the pandemic; RQ (2): What is the public’s attitude of small and medium retail enterprises or stores and online shopping; RQ (3): How may the Chinese and Russian governments guide the digital transformation of small and medium retail enterprises in the future? In addition, this article also describes a survey of the population in specific regions of China and Russia, from which more useful information can be obtained.
This article has a certain contribution to future research. First of all, this is one of the few articles that studies the difference of retail industry during the pandemic between China and Russia, which can better understand the relevant measures and consumer behaviors taken by the two countries. Secondly, this article gives some insights and measures on the future digital transformation support of small and medium retail industry for the reference of the government and related enterprises, and it is beneficial to promote the development of small and medium retail enterprises in China and Russia.
This study analysed the development of small and medium retail enterprises in China and Russia during the pandemic, and conducted a questionnaire on consumers in both countries, thereby identifying a series of policy recommendations for the digital transformation of small and medium retail enterprises. Preliminary descriptive analysis shows that small and medium retail enterprises have been hit very hard during the pandemic, and a new model is urgently needed to achieve transformation, which is, the digital transformation. According to the questionnaire, consumers are very interested in the new digital services and are willing to try them, which also confirms the feasibility of digital transformation of small and medium retail enterprises. Based on this result, this study provides some policy recommendations for the government to help the in small and medium retail enterprises in China and Russia.
This study also has some implications for policymakers. First of all, it provides a new idea for the government, that is, digital transformation, to solve the dilemma faced by small and medium retail enterprises and provide more choices for policymakers. Second, the survey on consumers’ attitudes provides effective data support for policy formulation and regulatory authorities, more detailed countermeasures can be formulated based on the results obtained. Finally, this study puts forward a series of recommendations for government departments to refer to and contribute their own views to policy formulation.
However, in this study also have certain limitations. First, in terms of data collection, due to the lack of channels, only a few numbers of result were collected in Russia. Moreover, most of the respondents in Russia were young people and students, which did not fully cover all age groups and occupations. Second, this study lacks a feasibility analysis of the proposed recommendations, and this study fails to provide different types of suggestions for China and Russia based on their different economic, social and cultural situation. So, future research still needs to: 1. Try to get more respondents in Russia, covering all age groups and occupations. 2. Develop more diverse and nationally tailored proposals for Chinese and Russian policymakers. 3.Carry out a feasibility analysis of the proposed proposal.
This study also has some implications for policymakers. First of all, it provides a new idea for the government, that is, digital transformation, to solve the dilemma faced by small and medium retail enterprises and provide more choices for policymakers. Second, the survey on consumers’ attitudes provides effective data support for policy formulation and regulatory authorities, more detailed countermeasures can be formulated based on the results obtained. Finally, this study puts forward a series of recommendations for government departments to refer to and contribute their own views to policy formulation.
However, in this study also have certain limitations. First, in terms of data collection, due to the lack of channels, only a few numbers of result were collected in Russia. Moreover, most of the respondents in Russia were young people and students, which did not fully cover all age groups and occupations. Second, this study lacks a feasibility analysis of the proposed recommendations, and this study fails to provide different types of suggestions for China and Russia based on their different economic, social and cultural situation. So, future research still needs to: 1. Try to get more respondents in Russia, covering all age groups and occupations. 2. Develop more diverse and nationally tailored proposals for Chinese and Russian policymakers. 3.Carry out a feasibility analysis of the proposed proposal.
