The e-commerce response to COVID-19
How can e-commerce bring economic opportunity to small businesses?
Tanglee Seepanthong sells meat, chicken and fish in Khuadin Market, Vientiane in the Lao People’s Democratic Republic. After the first confirmed cases of COVID-19 in March her sales collapsed, as shoppers stayed away from the market. She turned to Facebook, offering online orders and free home delivery to residents of the city. Within days she had transformed her business, generating over five times her typical sales at the market.
It is not evident that e-commerce offers such easily accessible and lucrative opportunities everywhere. In some markets, including India and South Africa, all transportation of goods deemed non-essential has been banned, effectively suspending e-commerce for small businesses. In Europe, Amazon stopped the receipt of most inbound goods in mid-March, with the exception of a list of priority items. By limiting access to its outsourced logistics service ‘Fulfilled by Amazon”, Amazon effectively put a stop to the trade of many small businesses not in the ‘essential goods’ category.
Worldwide, the online channels benefitting from a demand boom in March (when most countries entered lockdown) were the major supermarket chains and online media, according to research firm Statista. Marketplaces and tech retail as a category saw low double-digit growth, while other sectors declined strongly or even collapsed as in the case of tourism and event platforms.
Early market data show variance across e-commerce markets since lockdown
According to analysis provided by COVID-19 Commerce Insight, based on the transaction data of 2,500 brands (customers of data services firm Emarsys) across 100 countries, pure e-commerce firms are so far holding up well in Europe and the United States, while Asia and Nigeria shows a continued decline in online sales. It would seem that where e-commerce has established itself among consumers, there has been a tendency to switch to purchasing online. Underdeveloped e-commerce markets were not sufficiently ready to respond.
Revenue data, pure e-commerce firms, all sub-sectors
Source: COVID-19 Commerce insight, https://ccinsight.org/
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