Even years down the line, the year 2020 will be perceived as the one that transformed everything. The year will be recalled for the novel Coronavirus. But an undeniable fact associated with the matter is that during the phase, the eCommerce sector has foreseen an unprecedented growth.
COVID-19 is very much a part of our life. But after its initial phase came to an end, economic activity started normalizing in a slow and steady manner. There was a sudden increase in eCommerce activity at most places in the world.
As time passed, lockdowns became a part of our lives. It was during this time that even more consumers and businesses chose to go digital. Procuring even more goods from online services became the norm. An important fact that highlights this trend is that the share of eCommerce in the global retail trade was 14% and 19% in 2019 and 2020 respectively.
Topmost organizations from across the world, including the UN have the opinion that the consumer inclination towards eCommerce will last throughout the recovery phase of COVID-19. The present is a time to put the challenges posed by COVID-19 into cognizance. People and the government alike need to embrace the changes in our lives with open arms.
Going digital through the tough times of COVID-19 has supported numerous businesses. Businesses and corporate sector, in the same coin, have made a proactive commitment towards going digital through these tough times. The transformation has laid long lasting impacts over communities and our everyday lives.
eCommerce trends through the times of COVID vary by the region
COVID-19 has impacted eCommerce trends everywhere in the world. But the maximum shift can be seen in emerging economies. Just as an instance, Mercad Libre, which is Latin America’s online marketplace, reported a YoY increase of 100% in the second quarter of 2020. Similarly, Jumia, an African eCommerce platform has reported an increase of 50% in their transactions for the initial 6 months of 2020.
In China, the share of eCommerce in retail sales increased to 24.6% in August 2020, from 19.4% in August 2020. In case of Kazakhstan, the share of eCommerce in retail grew to 9.4% from 5%, amid 2020 and 2019 respectively.
In Thailand, the shopping apps were downloaded 60% more in just a single week of March 2020.
The developments mentioned highlight the increasing inclination towards eCommerce. But in the least developed countries, consumers and businesses are yet to derive the maximum value from eCommerce opportunities which the pandemic has induced. Persisting barriers have caused the same.
A few of these barriers include insufficient consumer trust and expensive broadband services. As a result, people and government in these places pay only a limited attention to eCommerce. But, it is important to recognize that eCommerce plays an important role in global trade.
There is a disparity in how eCommerce has transformed through the times of pandemic across different regions in the world. The top digital platforms have benefited more as compared to the eCommerce business that operate at a smaller scale.
Through the current times, most of the solutions that are used in the eCommerce industry, such as cloud computing and teleworking, are made by only a few large corporations. They are primarily based in China and the US.
The marginal players are also growing in prominence. But there is a reasonable difference in their market performance, when compared to the more prominent companies. While the pandemic lasts, there are odds that the digital divide will grow further. This is likely to add to the inequalities that exist among nations currently.
Governments from across the world have come up with both, short-term and long-term response to the effects of the pandemic. They have addressed the strategic requirements for recovery. In several developing countries, the governments have made interventions for safeguarding businesses and people’s incomes.
The government of Costa Rica, just as an instance, has created a platform for businesses that do not currently have an online presence. They have also created a texting service and a smartphone app for facilitating trade among businesses involved with fish, meat and agricultural production.
Similarly in Africa, Senegal conducted a campaign for spreading awareness on how eCommerce benefits all sections of the population. Indonesia, similarly, initiated a capacity-building program for enhancing digitalization among SMEs.
Transforming eCommerce through the times of COVID
When the governments from across the world put digital readiness at a national level on priority, even more local businesses can be a part of the digital economy. This calls for a meticulous change in business practices and public policy, for enhancing digital and trading infrastructure. One such measure is the facilitation of digital payments. Similarly, ideally suited frameworks should be launched at regulatory and legal levels for encouraging online transactions and security. It is, however, important to ensure that the approach is holistic. When digital entrepreneurship becomes a focus area, making local businesses a part of the digital economy becomes easier to achieve.
When digitalization is quicker for smaller businesses, this becomes easier to achieve. Reskilling women will also help in the regard.
The international community can also play an important role in this regard. They can come up with new ways to co-operate with the governments and the private sector, and derive the maximum value from these opportunities. Collective efforts can play an important role for bridging the digital divide among nations, which existed long before the pandemic