COVID-19 is Transforming E-Commerce Globally

Ecommerce startups

Just over 306 million Americans are affected by stay-at-home orders, nearly 95% of the U.S. population. COVID-19 will forever change retailing, and its initial impact on e-Commerce is creating challenges to online selling & service no one imagined in January. The following graphic from COVID-19 Commerce Insight, an Emarsys initiative in cooperation with GoodData show how year-over-year revenue growth comparing the last seven days to the same period last year:

Mobile devices are the most popular device for online shopping by a wide margin. 72% of consumers are using mobile devices to shop in stores according to the latest PYMNTS’ 2020 Remote Payments Study. E-Commerce and online retailers’ supply chains, order management, and fulfillment systems are all being tested by the triple-digit order and revenue growth going on today. And best of all, more energy and intensity is being put into improving customer experiences online.

In Africa, running e-commerce businesses in Africa’s overwhelmed cities can be a thankless task due to the basic infrastructure gaps and a reluctant customer base.

But it turns out the ongoing Covid-19 pandemic may yet ease one of the lingering challenges faced by e-commerce businesses in African markets. While many of these ventures have attempted to engineer a shift in local social behavior in customers, the pandemic’s restrictions mean the choice of shopping online is  finally getting a PR or marketing boost out of necessity and safety.

Even though Africa has had a billion-dollar IPO for an e-commerce company and smartphone penetration is growing, the reality is that shopping online is still a fanciful prospect for most ordinary Africans. Even Jumia which was backed by the likes of Goldman Sachs and MasterCard, and once valued at over $4 billion by enthusiastic investors soon after its IPO, has been brought down to earth by the realities of promising but tough, underdeveloped markets across the continent.

The dominant view among e-commerce players on the continent is the boon will last a while longer even after lockdown measures are eased. With physical distancing measures likely to remain in place in different forms, there’s a strong possibility of a drop in foot traffic at normally crowded shopping malls and stores. Taboure says Afrikrea is already tweaking its model to make it cheaper for designers based in Africa to sign up so as to cater for an expected growth in orders from across the continent.

It’s not entirely a home-run for e-commerce businesses though. Supply chain disruptions could yet result in an inability to fulfill orders, especially in countries with strict lockdown measures. For instance, Jumia suspended delivery of all fashion items in South Africa last month. Poignonnec has also admitted to challenges being faced with fulfilling orders particularly for products sourced from China.

Millions of online customers changing their behavior at the same time to opt for more time saving and convenience puts a considerable strain on e-commerce and online retailers today. How they choose to react will define the future of e-commerce. Many are choosing to remove the friction that stands in the way of turning occasional customers into the most loyal. And they’re starting with securing online identities and protecting accounts from takeover control. Once state by state stay at home orders are lifted, e-commerce sales may stabilize at a lower growth rate than they are today, yet the behavioral changes are already in motion to completely change the retailing landscape and commerce overall for years to come.

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