We all know how e-commerce is growing in a major way all around the world. However, just to drive the point home, let us look at some startling figures to demonstrate the growth-
- According to data, in Q1 of 2020, one dollar of every five dollars spent by consumers in the United States was done on an e-commerce platform.
- During the pandemic, in the first three months, e-commerce sales in the country grew by 30% to hit $350 Billion Dollars.
- In June and July 2020 (the height of the COVID-19 Pandemic), e-commerce sales grew in the world on an average of 60% (compared to June-July 2019).
The pandemic has hit the economy in a much harder way than it was ever expected. Many experts have gone on record to state that the economic recession experienced by the world, will be far greater than the one caused by the Spanish Flu in the 1920s and 1930s.
In this article, we are going to focus on the growth of retail e-commerce. We are also going to discuss some major factors, which are contributing to growth.
E-commerce Growth during the Pandemic: What you need to know
The health and medical protocols set in place by experts resulted in people becoming wary of visiting crowded supermarkets. Maintaining distance and hygiene could only be possible if people would stay at home.
However, staying at home would mean that there would be a need to get essentials and non-essentials for running the everyday household. Most national governments permitted e-commerce companies like Amazon, Walmart, eBay, and others to operate to help people.
Many brick and mortar businesses also realized that shifting operations online is the smart thing to do. They did this as it would help them reach customers, get the sales going, and cut down on physical establishment costs.
Many also realized that people are afraid to come to the stores and make physical payments, and would rather prefer to make e-commerce payments. This literally forced many businesses to turn their operations digital overnight.
Factors contributing to the growth of E-commerce Platforms
1. The Increasing use of Social Media during the pandemic-
Many digital experts point out that there is a strong interdependence of social media with e-commerce. They refer to the growth of influencers and the increasing adoption of direct selling tools by social media companies. Facebook and Instagram are placing heavy bets on turning the social platforms into a sales and e-commerce one.
2. Smartphone penetration and Network connectivity-
We fail to realize that developing economies like India are major markets for companies like Amazon and Walmart. This is true for almost all developing economies of the world. The rise in smartphone usage and data connectivity means that most people are now looking to try out e-commerce not only for necessity but also for the novelty factor.
3. Changing Consumer Digital Behaviour-
Most of us are working online, shopping online, and consuming entertainment online. In other words, our real-world has become dominated by technology and digital platforms. This behavior has been accelerated with the onset of the COVID-19 pandemic. Consumers are not only finding it convenient to do things online but also enjoying the experience, which comes with it.
People who are buying online do not want to be exposed to the virus at any cost. Purchasing from e-commerce platforms means that you are getting your products and goods without any human interaction at all. Many health experts point that this has helped in a major way in reducing the number of cases and deaths from the Coronavirus.
5. Panic Buying and Hoarding-
When the pandemic first hit, there was a lot of frenzy and chaos. Most nations went into lockdowns at a short notice. This promoted panic buying and hoarding from e-commerce channels in a major way. Even though the hysteria has now died down, there are still millions who continue to panic buy from e-commerce platforms as they fear for the worse.
The Final Word
In order to become a successful e-commerce online retailer, businesses need to work with the best e-commerce merchants. This will allow them to look after the payments and logistics in a much better way. Businesses who have been able to adapt to the new reality are sustaining and improving their profit margins. On the other hand, businesses that have struggled to make the transition are experiencing very difficult times.