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Impact of Covid-19 on E-Commerce

Apr 01, 2021

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Honey Mehta
Digital Marketing Manager
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Impact of Covid-19 on E-Commerce The impact of the Covid-19 pandemic has shown the trend towards the growth in sales through e-commerce websites. The lockdown rules across the country restricted people to get out of their homes and even for essential goods. This resulted in a surge in the use of various online portals for the purchase of all sorts of products, ranging from basic ones to branded items. The strict rules such as social distancing that were mandatory for people to follow to contain the surge of Covid 19 increased the scope of online purchases.

Many online businesses were set up seeing the increase in demand for such portals. Many surveys show that more customers have gone online to look for essential products. Several reports showed that the Indian e-commerce website is expected to overtake its US counterpart to become the second-largest market for e-commerce in the World in the coming years. Products related to groceries, pharmaceuticals, restaurant deliveries, health, and hygiene products witnessed the largest increase in the Covid-19 crisis through online marketplaces. Customers avoided going out unless they don't have any other option to buy the product online.

There was a lack of productivity during the lockdown which resulted in people losing their jobs, businesses were shut, people experienced pay-cuts and amid all that there was only one platform that bloomed, and that was e-commerce. Many people shifted their businesses online in search of getting their sales back on track and they were successful too in doing so.

To avoid contact with other people and to follow the social distancing norms, there was an increase in e-payments. People opted for cashless transactions to avoid the spread of coronavirus. Almost 60% of e-commerce companies and around 70% of online third party marketplaces witnessed relatively higher growth in mobile money payments that followed transactions via net banking and credit cards. Some of the key factors that drive the growth of e-commerce markets include steady growth of internet users and rising awareness related to online shopping, increasing online launching of products, and low prices on bulk purchases.

The lower prices of goods due to direct distribution channels further contributed to the growth of the global e-commerce market. Staying at home and social distancing pushed the customers towards online shopping. However, the uncertain consumer demand and supply chain has also affected the e-commerce industry. In many countries, people focused on purchasing essential toiletries, groceries, and other products that caused supply chain disruption.

Before Covid-19, the global e-commerce industry was mainly used to purchase products related to electronics, healthcare, beauty, personal care among several others. Due to the Covid-19 outbreak, the e-commerce supply chains were strained and the country which was affected most by it was China. It is the largest producer of electronic and IT parts globally. China’s main imports comprise electronic parts that are assembled into final products and then are exported.

As the factories were closed so it shut down the electronic products supply chain that adversely impacted the electronics e-commerce industry. Since the beginning of the Covid-19 crisis, Facebook and its e-commerce websites companies have been the most growing sales channels. We all will agree that social media plays an important role, with many people using Facebook, Whatsapp, Instagram, and other social media applications, there was a surge in online sales of the products. Many e-commerce businesses have used their websites and Facebook sales channels. Before the Covid-19 outbreak, there were 5 domains around which e-commerce companies have maximum sales. These were the fashion, electronics, and IT equipment, agro-food and beverages, furniture, and household items along with food deliveries. Also, handicrafts were purchased by the customers among other gift items. But in the Coviud-19 crisis, most businesses are now associated with a change in the composition of sales that includes essential items.

The current situation of e-commerce companies is that 69% have been associated with the change in the composition of sales. The essential items include - face masks, hand sanitisers, disinfectants, products related to home offices and schooling, and groceries. After the Covid-19 outbreak, everyday items such as agro-foods and beverages, sales in pharmaceuticals, and hygiene products are the items that have seen a surge in sales. The coronavirus crisis has also affected the cost structure and workforce size of many businesses surveyed.

Now businesses and customers have become more prone to use e-commerce services. New steps are being taken to enhance business efficiency. Some businesses have taken the opportunity to acquire new skills to improve their online presence. Earlier businesses that used to rely on physical distribution networks have now moved forward with digital distribution plans. To ensure an efficient e-commerce experience for the customers, policymakers need to understand their customers. They must foster the enabling environment for online transactions in areas that include digital goods and services.


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Honey Mehta
Digital Marketing Manager