Long-Term Positive Impact of COVID-19 on eCommerce

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By Emmanuel Nwachukwu

The outbreak of the novel COVID-19 pandemic has impacted the world economy negatively and has led to significant shifts in customer needs and behaviour as well as reconfiguration business operating models.

The resultant socio-economic reality has created unprecedented challenges for sellers, thus making businesses explore new territories to maintain relevance and grow sales, with digital tools and e-commerce platforms proving crucial in achieving these objectives.

An Adobe report released mid-July revealed that the pandemic has massively accelerated the growth of e-commerce, as data showed total online spending in May hit $82.5 billion, up 77% year-on-year. The report went on to show that the growth is unprecedented, and without the pandemic, it would have taken four to six years for e-commerce to record such impressive figures.

According to Vivek Pandya, Adobe’s Digital Insights Manager, “it would’ve taken between 4 and 6 years to get to the levels that we saw in May if the growth continued at the same levels it was at for the past few years. We typically don’t expect to see surges at this level, at any time outside of the holiday season. For context, last year’s holiday season drove $142.5 billion dollars from November 1st to December 31st, and that was a 13% year-over-year increase.”

Around the same period, Africa’s ecommerce platform unicorn, Jumia said it experienced increased customer traffic on its platform.

“This is an unprecedented time for a vendor to be online. Just to give you a grasp of the milestone achieved by Jumia; only in the month of May, we recorded a daily highest number of vendors with at least one sale across the full year; we recorded the daily highest number of buying customers across the full year; we also recorded daily highest number of individual products purchased on the platform since the beginning of the year,” said Jumia Nigeria CEO, Massimiliano Spalazzi.

While the pandemic has triggered a surge in online purchase culture globally, the emerging trend could mean a lot more customers will become a native of the online community, which experts believe will rub off immensely on the profitability of e-commerce business. “We are seeing signs that online purchasing trends formed during the pandemic may see permanent adoption,” said Taylor Schreiner, Director, Adobe Digital Insights, said in a statement.

Insight from the Nigerian e-commerce landscape shows that the pandemic has incited a new shopping pattern, as people are visiting online stores for purchase of electronics and gadgets which are vital tools in the emerging post-COVID business world.

“As authorities relax restrictions and people start going out more and more in the last few weeks, we have seen top-selling categories; appliances, phones, laptops, starting to increase sales again as people start the new normal in their work and personal lives,” said Spalazzi.

Also, health concerns will remain a factor for consumers to keep the online shopping trend going. With the World Health Organization warning of a possible second wave of infection, people would tend to remain conscious of the risk the virus poses and as such continue to deploy ecommerce for essential needs from the safety of their remote locations.

Besides, the convenience of ecommerce will also be a huge factor. A survey of some first-time e-commerce customers in some European markets revealed that the convenience of e-commerce experienced during the lockdown would make them alter their plan for shopping in the future.

Consequently, brands whose supply chain was affected by the ripple effect of the pandemic are aligning their strategy with this emerging e-commerce buying culture. A recent research showed that 75% of U.S companies would have had their supply chain affected by the outbreak.  This means limited inventory, upset customers and possibly several cancelled orders.

In Nigeria and by extension Africa, brands including Coca-Cola, Procter & Gamble, Mastercard etc moved their products and services to the Jumia platform, either showcasing their products on the Jumia Mall or advertising their products on the Jumia Marketplace and benefiting from the Jumia’s wide reach and logistics operations. This would translate to more revenue for e-commerce companies, with their logistics and advertising offerings becoming potent tools for connecting brands and customers.

Likewise, the pandemic has been an eye-opener for governments in an emerging market to the huge economic potentials of e-commerce.

Given the crucial role played by the ecommerce industry in the movement and supply of essentials during the lockdown, it is a major indicator for authorities, especially in Africa, that given adequate support and suitable working environment, ecommerce can be a major contributor to economic growth.

It is thus expected that the positive roles played by the sector during this tough time, will help in the advocacy for favourable policies that will further boost e-commerce on the continent.

It is, therefore, safe to say that while every human endeavour has been eroded by COVID-19 pandemic, the e-commerce space might be one of, if not, the greatest benefactors of the pandemic in the long run.

The pandemic has further highlighted technology and its digital offerings as the future of all socio-economic activities. And as more activities are brought onto the digital space, it will no doubt rub off on businesses in the online marketplace.

Emmanuel Nwachukwu, a Business and Communications Strategist, writes from Lagos

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