As the Chinese economy slows down, traditional business are feeling the effects of decreased consumption combined with the staggering growth of online sales. In what was once the busiest market in the Zhongguancun district (Beijing), referred to by Bloomberg as “the Silicon Valley” of China, electronic retailers are struggling. According to a frustrated entrepreneur, traditional businesses face a serious threat: “There are more sales staff than customers around here. Everyone buys online now.”
The shift of Chinese consumption habits to online retailers has the potential to create “46 million new jobs by 2025” (Bloomberg). Nevertheless, given that this transition takes effect, more than 30 million Chinese workers employed by the threatened traditional businesses will lose their job. While the “online revolution” can promote consumption as well as significantly boost productivity, China has to watch unemployment rates closely if it does not want the economy to be overwhelmed by the overhang debt from the former investment-led expansion.