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  • Home / Blog / Ecommerce Returns

How Coronavirus (COVID-19) Is Impacting eCommerce

01 Feb, 2023 | 5 Min Read
How Coronavirus (COVID-19) Is Impacting eCommerce

Table of Contents

10 Ways The COVID-19 Pandemic Is Impacting E-commerce

It has now been over two years since the Coronavirus first gained notoriety, and global lockdowns began to be implemented. One cannot deny that the COVID-19 pandemic has changed the world forever. It has touched upon almost every aspect of our lives and affected them in some way or the other, big or small, good or bad. The eCommerce sector is, of course, not an exception.

It has also been transformed, perhaps irrevocably. Several things that we used to take for granted are no more, and several things which seem to be very new and exciting are also emerging. The pandemic has changed the behavior of customers, manufacturers, as well as marketplaces. 

It has shaken up supply chains in such a manner that it is proving to be a herculean task to put them back together. Today, we shall explore in-depth how exactly COVID-19 has impacted e-commerce and what more changes we can expect to see going forward.

Positive Impact of the COVID-19 Pandemic on E-Commerce

1) Acceleration of Social Media Utilization

As companies closed down brick-and-mortar stores, demand for goods shifted online, and customers started hunting for alternative shopping methods. eCommerce companies took full advantage of their digital business models to attract buyers. 

This brought social media to the forefront. Social media was already on the verge of a breakout in terms of use and adoption by big businesses, and the enormous marketing and growth opportunities it offered during the lockdowns also helped drastically.

2) More Variety of Goods

As more and more people wanted to buy essential goods online, it also opened up multiple avenues for new businesses to emerge and expand their digital presence. The demand for commodities such as household groceries, medicines, and personal care products skyrocketed. With a constant influx of new products, however, businesses now also had to compete for the users’ attention, forcing them to come up with out-of-the-box strategies to ensure they stayed relevant.

3) Platform Marketing

Platforms such as Instagram, YouTube, and Twitter allowed brands to engage with their customers as well, enabling them to market their products with creative new ideas and campaigns.

4) Adoption of Online Shopping in Less Developed Regions

With the pandemic bringing life to a standstill in rich and poor countries alike, there loomed a serious threat of the wealth-gap increasing even more. Diseases and infections disproportionately affect the less privileged and the lower-income nations, who may not have access to the same quality healthcare and resources that the people from developed countries usually do.

This presented a very lucrative opportunity for some e-commerce companies, which began offering online shopping services in countries where traditionally, the physical form of shopping was practiced.

5) Diversification of Products

Even in the developed nations where online shopping was already a common occurrence before the pandemic, the focus of e-commerce shifted from luxury or niche items to everyday goods and commodities. People went from purchasing smartphones and electronics online to ordering toothpaste and face masks online as well.

6) Exploration of New Opportunities

With hospitals at total capacity treating the Coronavirus, people with old age or pre-existing ailments could no longer receive the priority treatment they needed. As such, the e-commerce sector spotted a new consumer segment that was being neglected and came up with creative solutions to meet their requirements. Online medical check-ups, pharmaceutical deliveries, etc. became the norm.

7) Explosion of Online Payment Methods

The ease and convenience of online shopping, coupled with the fears and paranoia of transmitting or contracting the virus, led to an unparalleled adoption of online payment methods, especially in developing countries such as India. Even though Cash-On-Delivery continues to remain a very dominant method of payment, the sheer pace and growth of online transactions have been nothing short of revolutionary. 

Now that the common people also have a taste of the simplicity and ease of use with respect to cashless payments, one can possibly expect even more people to join in. Methods of online payment include debit cards, credit cards, bank transfers, and in India, even UPI (United Payments Interface). UPI, in particular, is a simple payments technology that assigns a unique virtual address to every user and allows seamless transfers of money from one address to another.

Thus, we can clearly see how the COVID-19 pandemic challenged e-commerce businesses to look outward, searching for new and alternative sources of revenue and acting upon them for the public good.

Negative Impact of the COVID-19 Pandemic on E-Commerce Businesses

From the above-mentioned points, we can gather to some extent the changes in the consumer and market scenarios and how the e-commerce companies reacted to them. Next up, let us have a look at the adverse effects of the COVID-19 pandemic on e-commerce and try to deduce whether the overall effects have been net positive or negative.

1) Shutting down of Businesses

While the pandemic has been very beneficial for pushing digitization as well as bridging previously obscure and un-catered segments, a number of e-commerce businesses have failed to keep up with the rapid changes and have shut down as a result. Many small businesses could no longer afford to keep going due to pandemic-incurred losses, and prices were also driven up sharply. The companies that did somehow manage to survive also had to downsize a significant portion of their employee base.

2) Supply Chain Issues

Next up, we would be hard-pressed to ignore the disruptions of the global supply chains induced by the Coronavirus. With rising demand and costs of natural resources such as coal, natural gas, and oil, international trade came to a standstill. Countries went into lockdown and stopped production, manufacture, import, and export of non-essential goods.  Supply can no longer keep up with the pent-up demand and revenge shopping of the previously deprived customers.

3) Structural Economic Issues

In 2020, all governments made a choice to halt their economies and contain the spread of the virus. Two years later, the world is still reeling from the after-effects of those decisions. Inflation and unemployment are at record highs. There is a global cost of living crisis that has been accelerated by the COVID-19 Pandemic. Countries like China that are pursuing a Zero-Covid policy are acting as a bottleneck in the international supply chain ecosystem.

Expected Future Trends of E-Commerce

Considering the fact that we took note of the various positive and negative effects of COVID-19 on e-commerce, it would be impractical not to acknowledge that the Coronavirus has also kickstarted many new trends within the industry that are set to change, and perhaps even revolutionize, the way we shop and interact with e-commerce. Let us look at some of them in detail below.


1) Virtual Search Assistants

With the rapid adoption of new technologies to make at-home shopping even easier and accessible during the pandemic, a new feature has come to the forefront- that of virtual search assistants to help people with their shopping needs.

Such assistants perform a variety of functions- from hunting for new deals to searching for products using visuals or images. With more research being done on the subject, customers should rest assured that the results will get even more accurate and there might even come a day when using virtual assistants to search or shop for products becomes the norm, not the exception.

2) Augmented Reality

Although this is still far from being a perfectly usable technology, it is being worked upon every day and is getting closer to a stable release. It enables customers to truly see and get a feel for the item they are trying to purchase, providing a three-dimensional experience. Using AR, people can observe whether the product fits into their room or figure out the best set-up for large items like furniture.

It also improves on the drawbacks traditionally associated with online shopping in that it doesn’t allow customers to truly ‘feel’ or test the item. As the technology develops even more, there might come a day when customers are able to try on clothes virtually before purchasing. It has enormous potential to revolutionize e-commerce as we know it.

Conclusion

So now we have a pretty good idea as to how the pandemic has affected the e-commerce industry. We took a look at both the good and the bad sides of the virus and can safely conclude that though customers received a lot more variety to choose from, small to medium-sized businesses had to bear the brunt of the pandemic. We also learned about a couple of trends in e-commerce that are expected to kick off soon and possibly bring about drastic changes in the industry. We hope this article has been informative and engaging, and you now have a clearer notion of the impact of COVID-19 on e-commerce.

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