COVID 19 And Its Implications On E-Commerce
E-commerce is a booming industry that is gaining attention worldwide, and in India, much before the coronavirus arrived. However, the pandemic has brought in a series of changes accompanied by uncertainties and panic. The infectious nature of the virus has led to changes in the consumer’s lifestyle, from social contact to social distance. Every single individual tries to avoid contact and follow a hygiene protocol. Due to these changes, we will soon witness the way businesses are conducted on online selling sites too.
Consumer behavior is rapidly changing, and people are resorting to ordering online rather than visiting shops and outlets. On the other side, there is a section of people, which will refrain from buying anything at all. It is to avoid any contact with the outside world and minimize the risk of infection. Moreover, people will only spend on necessities and will not be inclined to invest more than that. It presents both challenges and opportunities.
Therefore, COVID-19 will have both positive and negative implications for the E-commerce industry. So let us dive into it and see which side will win.
Positive implications of COVID-19 on the E-commerce industry:
- Apprehension to step out:
Despite the relaxations in lockdown, people are apprehensive about stepping out and coming in contact with people. Therefore, companies should nudge off their behavior towards online selling sites. Through online ordering, people can ensure less contact with the outside world and thereby reduce the chances of infection.
- Turn the challenge to opportunity:
E-commerce companies have taken a hit due to lockdown and restrictions. To compensate for this and grow, companies can capitalize on the opportunities and quickly change their online selling sites to supply all the essentials and cater to a broader range of customers and markets. It can help the business get higher engagement in the future as well.
- Safety guidelines:
To prevent the infection of the virus, WHO has outlined a series of safety guidelines and protocols. The order processing services must ensure compliance with these guidelines at various stages of their operations, such as picking, packaging, and shipping. Every order has to be packed and shipped with due care and sanitization. It will bring a breakthrough in the safety of both customers and suppliers in the future too.
- Feasibility of fulfillment services:
The companies with feasible and flexible fleet management service or ecommerce fulfillment services will benefit immensely as the companies will not require colossal staff, resources, and capital to deal with packaging and paying rent for the warehouse. Many fulfillment and fleet management services are coming up with technological solutions to deal with staff and resource crunch.
- Increased screen time:
It is a known fact that people’s screen time has increased exponentially, which means more access and exposure to online selling sites. The increased screen time will show people items available online repeatedly and with higher frequency. Hence, it will drive their shopping gene. This behavior of people can be profitable for e-commerce companies with accentuated orders and, eventually, profits.
Negative implications of COVID-19 on the E-commerce industry:
COVID-19 driven lockdown has shut down most of the services, and the global supply chain and logistics industry came to a halt. This lockdown has caused negative implications for E-commerce in the short run. Some of them are:
- Supply of only essential items:
With the government advisories in India to supply only essential items like groceries and medical supplies, online selling sites suffered a setback as they could not run their order processing service smoothly. Other things on the sites remained neglected and gave a blow to the revenue of E-commerce companies.
- Restriction on movement of people:
Due to the restriction on the physical movement of people, including delivery executives, the majority of the stock in the warehouse did not move to the customers. So it increased the cost of keeping goods in the warehouse and also delayed the revenue of companies.
- Staggered demand and supply chain:
The entire logistics chain of the E-commerce industry has suffered from COVID-19 from both demand and supply chains. The demand has seen a reduction due to income shocks and restrictions. In contrast, the supply chain has been affected by a lack of production or manufacturing across the globe.
- Staff and resource crisis:
With the lack of employees present in the industry, it becomes difficult to cater to all the previous orders. Hence, the order processing services can come to the industry’s rescue, and with the help of technology, help to deal with the staff crisis. Moreover, companies are finding it challenging to meet their operational expenses like warehouse rent, employees’ wages, and so on. Herein, technology can help reduce the cost and ensure economies of scale.
The majority of companies’ success will depend on how well they will understand the consumer’s behavior and mold their practices accordingly.
In conclusion, the E-commerce industry will not have a Net favorable implication in the COVID-19 and post COVID-19 world. But it can be said with surety that E-commerce and online selling sites will be better off than the brick and mortar institutions as they modify their logistics, online processing services, and the entire chain of picking and shipping.
73 Replies to “COVID 19 And Its Implications On E-Commerce”
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