Effects of Covid-19 on e-commerce: A shift from offline to online

After the outbreak of the deadly virus, the commercial sector got affected the most. COVID-19 has facilitated the shift in businesses towards a more digital world. This pandemic also triggered changes in online shopping behaviors that are likely to have long lasting effects. Lockdown policies as well as risk of COVID-19 infection forced people to shop online. Many surveys have proved that this pandemic helped to shift the curve of online shopping to an upward direction. This spread of the virus has forever changed the ways of e-commerce. Many surveys show that consumers have made the greatest shift from offline to online in past few months and they are moving towards cashless transactions. In this article, we will discuss the various short-term and long-term effects of COVID-19 on e-commerce.

How COVID-19 affected e-commerce?

Due to the COVID-19 pandemic, the ecosystem of e-commerce has been rapidly changing. This situation forced bricks and mortar stores to move online and it played a great role in the shift from offline to online retailing. This shift has put several challenges for traditional stores. Consumers are stepping out not as often as they were used to before the pandemic.

Many small and big businesses are facing the challenge of survival and some have to shut down their business operations. However, some stores have changed the way of operations by introducing home delivery and online ordering services. People, who were already familiar with e-shopping and cashless transactions, have started using this facility even more during the lockdown and after it as well. Many people started using technology for their shopping. So, COVID-19 has some positive and negative effects on e-commerce. Let’s discuss these effects and then try to make an idea about the future condition of e-transactions.

Negative effects:

The outburst of Coronavirus caused a sudden panic among people all over the world. Here are some points which describe the negative impact of COVID-19 on e-commerce:

1. Some people were stuck, away from their homes or families. People who were habitual to the physical way of shopping or purchasing faced troubles in adapting to the new normal.
2. If we talk about India, then many people here were not well aware of online shopping and online payment apps. Before the outbreak of the pandemic, the use of online payment apps was largely limited to the younger generation. But this lockdown period forced people to use these apps. People who were not technically sound and old age people faced a lot of difficulty in using such e-commerce platforms.
3. The issue of server connectivity also emerged as a challenge for the people while using online mode of payment. Many people also complained that their money was deducted from their accounts during online transactions but payment was not successful.
4. The delay in the delivery of the goods ordered online too created panic among the new shoppers. People even had to wait for days to get their basic commodities which they ordered online.

Positive effects:

Rise in online shopping during COVID-19 differ among countries. The growth in the online marketing got a boost in the wake of Covid-19. Here are some points that show the positive impact of COVID-19 on e-retailing.

1. In India, as compared to other countries growth is slow. The countries especially the US, the UK were already using the cashless way of shopping.
2. But post COVID-19, these countries faced 30% to 50% growth in their e-marketing.
3. Many organizations and agencies are conducting surveys over the world for analyzing the effects of COVID-19 on e-commerce. One of the surveys shows that women and people well aware of service industries have increased their online purchases as compared to others, in countries like China and Turkey.
4.  The survey also found that people aged from 25 to 44 reported a huge rise in online shopping compared with younger ones. They started using different online shopping apps and it also accelerated the growth of e-commerce.
5. From an observation we can say that people are buying more online products especially in the categories where online shopping wasn’t as popular pre-COVID-19.
6. As people are spending their time in self-isolation, so the demands in the products like cosmetics, home and garden decorations have been increased.
7. In this year online ordering has increased up to 79% as compared to 2019 all over the world.
8. After seeing the boom in the e-commerce sector during COVID-19, countries are likely to expand the size and scope of their ecommerce markets by increasing the investment.

Most countries are adopting the method of click and collect. In this method, people select their goods or items by clicking online. Then according to the decided time slot, customers can collect their goods from a common point or preferred delivery point. Some surveys noticed that from the start of the pandemic there is an enormous increase in the number of orders for click and collect. Mostly in the UK, up to 50% of shoppers make decisions about buying from a single store if that store offers the click and collect service.

E-commerce in India:

Currently, if we quickly look at the data of COVID-19 cases as of 5 November 2020, we found that there are more than 8 million cases of Coronavirus and more than one lakh people have lost their lives in India. (To check the latest data on COVID-19 click here) In such a critical condition people are avoiding going out in public places. Consumers have switched their way of shopping from retail shops, supermarkets, and shopping malls to online portals. Online platforms have all types of products ranging from basic commodities to branded goods. The scope of online trading has expected to surge as people are maintaining social distancing and may have to continue it for coming months.

In India, many consumers get benefit from the rise of e-commerce. During the pandemic there is an increase in merchandise choice, augmenting access and convenience. With approx. 90% population of India, e-commerce has already democratized the shopping sector. People are now friendlier with online shopping platforms like Amazon, Flipkart, Snapdeal, Myntra, Bigbasket, etc. It is safe to say that e-commerce is serving a favor by helping millions of people who are staying at home and procuring what they wanted at their doorstep.

Will chances of fraud rise with the increasing use of online purchases?

We often hear about online fraud. Some people also avoid using online purchase because it involves risk. Banks and retailers have many times reported the increased cases of phishing attacks. A perception has been made by the consumers that fraud-prevention teams are not working properly due to the pandemic. This makes online stores and organizations weaker.

If online transactions increase, then there is a chance of increasing fraud in e-commerce too. To avoid this, there is a need to establish a fraud prevention system. Merchants as well as shoppers have to be more aware of the current fraud trends. The Merchants or organizations should know from where that fraud is originating.  And the time to time strategies should be made to mitigate and prevent losses.

Future of e-commerce post Covid-19:

During the course of the pandemic, there has been a boost in the number of cashless transactions. Most of the countries have increased their number of online transactions especially in the UK. The United Kingdom (UK) has seen an increase from 10% to 60% in online purchasing. From some studies, an estimation has made that the Indian e-retail market might expected to reach nearly 300 to 350 million shoppers over the next five years.

There is no doubt that we are heading towards a cashless society. Even in the new normal, the owners of restaurants, shops and bars prefer contactless payments. This has sped up the growth towards a cashless society and will be continued in the future.