Sellin' in the Heat: Online Consumption Responses to Extreme Temperatures

Using a high-frequency transaction panel dataset from China’s largest instant retail platform, we investigate the effects of temperature shocks on online consumption. We find that extreme heat significantly increases online sales of agri-food products: relative to the reference bin, each additional day with an average temperature exceeding 27°C leads to a 2.94% increase in agri-food monthly sales. Extreme heat primarily enhances the instant purchase of perishable necessities, which exhibit stronger channel substitution effects, whereas storable staples exhibit little change, implying a consumption shift from offline to online channels for such perishable products. Prices at the subproduct level remain stable under high temperatures, indicating that the growth in online consumption is driven by increased consumer demand for online purchases rather than price adjustments. Enhanced health risk awareness and reduced offline travel behavior provide further evidence for this channel substitution mechanism. Additional analyses reveal that this effect is more pronounced in regions with higher internet penetration and more frequent heat exposure, while convenient transportation mitigates it. By contrast, low temperatures exert little effect, likely because spoilage risks are lower and offline stockpiling is easier in cold weather. Our findings underscore that instant retail provides a new adaptation margin to temperature shocks and have significant policy implications for ensuring access to essential products during hot weather.