New Development of Online Retail in China and the Associated (Accounting) Challenges

Abstract

Technological advances and improved logistics efficiency, in conjunction with the widespread use of smartphones, have enabled retailers and technology companies to dramatically change Chinese consumers' purchasing behavior. This paper aims to discuss the current developments in online retail in China and to explore the associated challenges, particularly in regards to accounting. This paper adopts an exploratory case-study approach to investigate the marketing practice of online retail during the “Double 11” shopping festival in China. The results show that the adoption of new marketing practices in the Chinese online retail industry is likely to encourage sales; however, they are also introducing certain challenges, such as the need for collaboration between online and offline stores and the application of accounting standards, including recognition of revenue and categorization of insurance expenses. The findings of this paper have implications for both existing stakeholders and firms that are looking to adopt similar online retail practices.

Keywords

• Business intelligence
• electronic commerce
• financial management
• inventory control