Micro-Retail Enterprises in China: Change and Continuity

Micro-retail enterprises (MREs) have had to adapt to changing conditions in regards to mobile payments (m-payments) and access to loans. The authors built on the published results of two previous surveys of MREs. One thousand nine hundred and ninety-eight MREs in four cities in China were surveyed in May and June of 2018 to determine the use and importance of m-payments to their business, their access to loans, and patterns of entrepreneurship. While some trends remain unchanged, at least two significant findings emerge. M-payments have not only gained almost universal acceptance by MREs in China; they are the overwhelmingly preferred payment method. In our last paper, we argued that "m-payments may represent a form of leapfrogging technology which will spur growth in this sector" and this paper provides additional evidence this is occurring. M-payments show every sign of being an example of a leapfrogging technology that is quickly changing the rules for retail in the MRE sector and opening new opportunities for businesses while lowering transaction costs, reducing fraud, and improving customer satisfaction. There are intriguing implications, including changes to the pace of m-payments replacing credit cards. Second, while it remains true that overall, access to loans for MREs is limited; there is a great deal of variation between tier-one cities and tier-two and tier-three cities.