Covid-19-Impact On E-Commerce

Updated on June 11, 2022, 2:45 p.m.

Covid-19 has affected the world industries worldwide, and due to the lockdown imposed by the government; the shops set up physically are losing their impact on the customers around the world.

According to the survey done by an advertisement agency, this pandemic is here to stay for another four years with new variants like Omicron coming up and the aftermath of the virus is even deadlier as 50 million will lose their jobs. Furthermore, the cost of living will rise and may be in 2030 we will recover and reach the Pre Covid levels.

People gathering at physical shops, supermarkets, and other business houses reduced from thousands to hundreds to tens. While many employees are working in IT and the non-IT sectors, face the music of working remotely.E-commerce companies is the ultimate hero and they will have a vital role to play during and after the onslaught of Covid-19 worldwide.

What Is E-Commerce?

E-commerce is the process of selling and buying the raw materials, products and services, using the internet by the Retailers, Consumers, and other business establishments around the globe. E-Commerce industry is booming by leaps and bounds and global pandemic has led to the rise in the Online shopping in the world. In 2022 it is expected to reach to the tune of whopping 7 trillion and the growth opportunities will definitely be awesome.

E-commerce retail is the exchange of services and the products between an online retail company and the customers logically.

Most of the E-commerce companies are of various types like B2B (Business to Business), B2C (Business to Consumer), and C2C (Consumer to Consumer).

  • B2B (Alibaba, Cisco, Fashinza, Ninjacart, Accel, Adobe, Upwork)
  • B2C (Walmart, Alibaba, Flipkart, Myntra, Snapdeal, Bookmyshow, Nykaa and others)
  • C2C (E-Bay, Shopify, Snapdeal, Bevy, Cint, Cybermiles, Raise)

How E-Commerce Companies make profit?

E-commerce companies are gaining lot of reputation due to the outreach they provide the customers around the globe. It gains prominence during crisis situations like the natural calamities namely the Earthquakes, Floods, Typhoons, Cyclones, Landslidesand artificial situations like Wars, Pandemics, Strikes, Curfew and even lockdowns. The amazing rise of digital power and literacy led to the invasion of investment in E- Commerce companies encouraging new players to create the base and churning out new patterns in the market.

Why E-Commerce in The Present Scenario?

E-Commerce is gaining momentum, during Covid-19, as fear of getting infected has gripped the minds and hearts of the people.

Before this pandemic, attitudes towards online shopping had clear distinctions. To purchase essential commodities, people used to visit physical stores and purchase non-essential commodities, and online shopping is important. However, the entire situation changed during the pandemic as online shopping became the ultimate goal.

Furthermore, attention is diverted to spend money on purchase of ventilators, PPE, and other medical equipment’s in large quantities by e-commerce companies. India is the major player in the world market as they have supplied medicines and the medical equipment’s, PPE (Personal Protection Equipment), Ventilators to nations in Africa, the US, and Europe.

E-commerce is gaining lot of prominence because they are good in

  • Offering new products
  • Curb additional loses
  • Target the right audience
  • Authentic brand under one roof
  • Very good return and refund policy
  • Connect with customers around the globe
  • Cut unnecessary costs and offer suitable products

How E-Commerce is rising in India?

The factors driving the growth of e-commerce companies in the market after the Covid-19are

  • Low price of products
  • Customised shipping
  • Ability to select products
  • Direct distribution channels
  • Comparison of the products
  • Launch of more products online
  • Bulk purchases done by customers
  • Rise of the internet as a powerful tool
  • Exclusive offers on products like bulk discounts

Due to Covid-19 norms in place, social distancing, wearing the masks, using the sanitizers is the key. The possibility of online shopping has increased and online purchasebusiness expected to increase to a greater extent. The rise of the FTU (First time users) is also increasingly visible as more people are opting for the online options.

E-commerce companies worldwide are having the greatest challenge of handling uncertain consumer demand and supply chain concerns. Largee-commerce companies and the retail giants like Tesco, Wal-Mart, More, Big Market, Royal Mart are experiencing a drop in the physical shopping, facing the supply chain disruptions and a tremendous increase of purchases of groceries, essential commodities and essential toiletries.

The impact of pandemic is depressing in other segments like Tourism, Education and other segments, however the e-commerce companies around the globe welcomed this with a positive note. Even after the lock down is lifted the profits earned bye-commerce companies like Amazon, Flipkart, Myntra will be higher compared to other segments around the globe.

How Covid affected E-commerce business?

According to the survey done by a global e-commerce giant, the closure of manufacturing companies producing numerous products worldwide, affected supply chain and demand of products. China had a large case of Covid-19and lead to the shutdown of manufacturing, non-manufacturing and IT companies.

Companies in Asia making electronic goods, agriculture products, IT products closed and took the help of e-commerce companies like Alibaba, Flipkart and Amazon for survival.

E-commerce companies in regions like North America, Asia-Pacific and Europe, got affected due to pandemic. Nations like Italy, Spain, Germany, UK, got severely affected due to the mismatch of supply and demand scenarios.              

Giant e-commerce companies like Alibaba, Flipkart, JD, Walmart, Corfu, Shopify, eBay, Rakuten, Amazon did not grow due to shut down of manufacturing and the non-manufacturing industries. E-commerce companies like Flipkart, Amazon made heavy investments in one day shipping and did not work out as the situation outside did not support their initiative.

The net income fell by 40% and the shipping cost rose by 71% due to the increase in prices of fuels. In the year 2020, 2021and the beginning of 2022 profits of e-commerce companies around the world nosedived and will take till 2030 to recover from the deadly onslaught of Covid-19.

Challenges Faced by E Commerce Companies

The challenges faced by the E Commerce companies are:

  • Increased advertising cost and low effectiveness.
  • To have a global outreach in the current scenario.
  • Enhance the customer life time values and cost ratios.
  • Expansion of the business to a large extent is next to impossible.
  • Navigating through various restriction imposed by foreign nations.
  • The territory of E-Commerce is getting more aggressive and competitive in the present world order.

People are shifting their purchase modes during and after the Covid-19 scenarios, and positive-minded buying is the need of the hour. The situation demands the e-commerce companies to introspect how to obtain the customer's delight and generate business. The customer will decide the impact on the e-commerce giants and only time will talk about the rise and fall of the e-commerce companies worldwide.

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