E-Commerce and its Role During the Lockdown
E-commerce which stands for electronic commerce, as the word suggests is the electronic buying or selling of goods over the Internet. There are four main categories of e-commerce models – B2C(Business to Consumer), C2B( Consumer to Business), B2B( Business to Business), C2C( Consumer to Consumer).
With the COVID-19 pandemic gripping almost all parts of the world people were forced to stay within the boundaries of their houses. So in order to fulfill their needs for basic commodities, essential items, other goods and services they had to find some alternative option other than the regular stores, malls, shops etc.
One particular industry that undoubtedly served all these basic needs and demands of people was the e-commerce industry. Most industries all over the world suffered the adverse effects of COVID-19 pandemic and subsequent lockdowns but e-commerce was one of the exceptions. It witnessed tremendous growth in various countries as it assured customer safety and convenience. If we consider the case of India, data by Indian Brand Equity Foundation(IBEF) suggests that during the festive week of October 2020, e-commerce companies reported sales worth $4.1 billion across platforms.
But overall in 2020, e-commerce sales in India rose by a mere 7-8% as compared to the United States and China where it was almost 20%.
The primary reason for less growth was the extended lockdown process imposed in various parts of India to prevent the spread of the contagious virus.
In the United States the effect of the pandemic on the e-commerce industry was more positive as the government took good advantage of the situation and made efforts to make the delivery of goods and services smooth and efficient.
According to data from IBM, the pandemic accelerated consumer’s shift towards e-commerce by five years. The reason being that consumers didn’t have many options to choose from. E-commerce seemed to be the only viable and safe option.
As retail sales continued to decline in the US, e-commerce continuously reported an upward growth trajectory.
As the habits of the consumer changed, online shopping became even more popular than before with a 8% growth from pre-pandemic levels, according to data by Digital Commerce 360.
Some of the key players in the e-commerce market who rose to the occasion and recorded high revenues include Alibaba which is China’s biggest e-commerce firm reported a 30% jump in quarterly revenue.
Amazon, the biggest player in the e-commerce industry added $401.1 billion market cap during the lockdown period.
Pinduoduo, the chief rival of Alibaba Group in China also reported tremendous growth as the total value of transactions over its platform soared and revenues were up by 44% as consumers preferred shopping online rather than going outdoors.
Shopify benefited immensely from the lockdowns as people shifted to online shopping, making it the second-biggest e-commerce group after Amazon by US market share overtaking eBay.
Mercudo Libre, an e-commerce firm in Argentina, sold 76% more items thus adding $18 billion market cap as the virus spread in different parts of Latin America thus forcing people to prefer online buying.
If we consider the situation in India, where two rivals Amazon and Flipkart are always competing in the e-commerce market, both reported record sales during the COVID-19 period. Amazon Prime Day sales doubled in India from 2019 while Flipkart recorded 54% rise in seller transactions in its Freedom Day sales.
As the lockdowns continue to ease in various parts of the world and we move forward towards a post COVID era, e-commerce will continue to rise as the habits of people have changed and the relationship between these firms and their customers have strengthened. In the coming future, e-commerce firms need to maintain their market presence by spending more on social ads, SEO and organic content, offline marketing and most importantly brand protection which will ensure their business continuity.