Understanding the COVID-19 effect on online shopping

Understanding the COVID-19 effect on online shopping

E-Commerce and online shopping are considered being the most significant retail consumer market since the last decade. The e-commerce titans like Amazon and Alibaba manifested a new practice of buying and selling products and services around the globe. The end-users can buy products in several clicks from a broad range of products and different offers from the sellers, and the sellers and their products are gaining a wide-open global market and opportunities. When Amazon, Alibaba, and eBay grew into global players – Jingdong(JD) of china, Rakuten in Japan, Zalando in Europe, B2W Digital in Latin America and Flipkart in India gained a considerable share of online shopping in the respective countries. Numerous other e-commerce companies have emerged and made fortune in the online shopping business. In 2019, global retail e-commerce reached 3.5 trillion U.S dollars; meanwhile, in 2020 the first quarter itself the picture is altered.

Normally, during a lockdown or strike, people in isolation seems to do more business with e-commerce companies and online stores because the traditional shopping and commuting will be suspended and the neighborhood shops may have run out of stocks for the essentials. But things that occurred during the COVID-19 lockdown seems never before experienced detachment from the community and individual. Despite the fact, everyone is home and spending time in isolation the e-commerce business seems struggling. When China started to be affected by the virus, the mask and sanitizer stocks became empty in the online stores, because they were the largest producers of these product genres. When the outbreak severely affected China, whole the production dwindled. China is considered a global hub for production and a significant connection to the supply chain. Alibaba and JD, the foremost e-commerce wholesalers from China, plunged in the struggle that affected all the major retail websites in the world, many dependent businesses with business models like dropshipping, packaging, and logistics market outset to be seriously affected.

At the start, Europe and the U.S were not equipped for the pandemic like COVID-19, but deficiencies in stock of necessary goods and price hikes seriously hit the business in February. Because of the policies of some companies like amazon to demote their supplier who was overpricing their products during the pandemic, this increased the traffic to their sites. But the stocks of masks, sanitizers, and gloves became empty at the start of the march or delayed their supply, the safety of workers and warehouses shutdown commenced as a result of the outbreak. Even though Amazon had an order flow up to hire 100,000 more workers to meet demand from customers, safety concerns were raised as an issue for the company. They continue to sell essentials by increased payment and distributed safety devices, allowed extra leaves and risk payments to workers. Fake news affected the business, the safety of products and packages has become a concern among buyers. Despite WHO and Amazon clarified that there is no chance of spreading the virus through packages, it’s seriously affected the business.

Almost every company failed to perform their business in the full potential during the pandemic, but sometimes it enhanced the local or regional online sales and local food deliveries; for example in India, when people are in lockdown or home quarantined, there were several new online societies and charity organizations announced, who are delivering food from the local restaurant to home and supplying groceries and essentials. The government supports their activities to make the lockdown process, more comfortable and less disputed. On the other hand, it will not be easy as before – as you might know Indias online businesses like Flipkart, BigBasket, Grofers are already suspended their operations due to safety concerns and broken distribution networks. This affected the online business model’s consistency and security; as IMF announced the global economy is already on the doorsteps of recession, the online business models and e-commerce retailing might be facing a downfall, at least for a while.

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