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Impact of COVID 19 on the E-commerce Market

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Impact of COVID 19 on the E-commerce Market

31 August 2020
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E-commerce includes buying and selling of raw material, products, services or any kind of goods and services through an electronic medium (internet) by the consumer, retailer, and business. Whereas, e-commerce retail is the exchange of goods and services between an online retail company and consumers (generally end-users). The e-commerce transaction can be of different types such as business to Business or B2B (Cisco, Alibaba), Business to Consumer or B2C (Amazon, Walmart) and Consumer to Consumer or C2C (eBay).

The factors which drive the growth of the e-commerce market before the COVID-19 pandemic include strong and steady growth of internet users and rising awareness related to online shopping, increasing online launching of products, low price due to bulk purchase and so on. In addition, an increasing number of exclusive products in the market and lower prices of goods due to the direct distribution channel and economies of scale further contribute to the growth of the global e-commerce market.

Moreover, after the COVID-19 pandemic, social distancing and staying home is further expected to push the consumers towards online shopping. However, uncertain consumer demand and supply chain issues can affect the e-commerce industry. The COVID-19 pandemic issue can also affect big merchants such as Walmart, which are experiencing a drop in casual shopping, supply chain disruption, and an increase in purchases of essential toiletries, groceries, and other products.

The global e-commerce industry report is segmented based products including electronics, healthcare beauty & personal care and others. The outbreak of COVID-19 had an impact on these segments due to the uncertainty in the supply chain and consumer demand across the globe. E-commerce supply chains are mainly strained by COVID-19 as well as factory closures in China, the US, and other countries. The most affected industry segment due to the COVID-19 outbreak is the electronics products as China accounted for most cases of COVID-19 and as per the International Trade Union Federation (ITUF), the country is the largest producer of the electronic and its parts globally. A considerable amount of China’s imports is encompassed of electronic parts that are assembled into finished products, such as consumer electronic products and computers, and then exported. However, due to the factory shut down electronics products supply chain are now close that further impacts the electronics e-commerce industry.

The e-commerce in various regions such as North America, Europe, Asia-Pacific and the Rest of the world are impacted by the novel COVID-19 pandemic. The countries in which most of the cases recorded include Italy, Spain, France, and Germany in Europe and China in Asia-Pacific. China’s giant e-commerce service provider Alibaba has struggled to sustain growth rates during an economic slowdown in its domestic market and faced with the uncertainty of the coronavirus outbreak. Key companies getting affected in the market include Alibaba Group Holding Ltd., Amazon.com, Inc., Qoo10 Pte. Ltd., JD.com, Walmart Inc., Shopify, Rakuten Group, and eBay Inc., and others. For instance, Amazon made some heavy investments in one-day shipping that aren’t compensating off quite yet. In 2019, its net income fell by 26% and shipping costs rose by 46%. The coronavirus pandemic affects Amazon’s profits throughout the first half of 2020.

Research Methodology

The research team recently published a report addressing the impact of COVID-19 on the global e-commerce industry. The study is incorporated by extensive primary and secondary research conducted by the research team. Secondary research has been conducted to refine the available data. Different approaches have been worked on to derive the market value and market growth rate. In the report, the analysis of the country is provided by analyzing various regional players, laws and policies, consumer behavior and macro-economic factors. The report includes analysis of different regions and countries and the effect of COVID-19 on the e-commerce industry of each respective region. Besides, an expected recovery timeline of the industry will also be included with the best- and worst-case scenario which will aid clients to take their future steps in the decision-making process.

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