eCommerce Considerations During the Coronavirus Outbreak


April 29, 2020
6 MIN READ
Vinculum
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The Coronavirus (COVID-19) outbreak achieved global pandemic status since its advent late last year. Apart from the obvious consequences on the health and morale of people, the virus has also indirectly affected the markets and supply chains of the world. The global economy is witnessing constant fluctuations because of the unpredictable demands of the market.

The supply sides of businesses are struggling to continue manufacturing operations as most of this activity takes place in China, where the virus outbreak has been the most severe.

Governments, the world over, have put lockdown restrictions in place to contain the spread of the virus. Private companies have also decided to close their operations to protect their employees. The decision, however, has thrown the production and supply chain process into disarray.

So how are the managers and directors of leading e-commerce companies preparing to address the supply chain crisis? How do they plan to run their operations? How are companies combating prevalent issues?

Before designing a plan of action, it is important to note how the different aspects of the online retail business are being affected due to the Coronavirus. There are various instances of companies engaging in different approaches to function in this calamity. Read on to know more.

Not the first time

We can start by remembering that e-commerce has faced and grown significantly through other crises. Both Alibaba and JD.com expanded during the SARS crisis in 2002-2003.

Change in Actions

Customers are opting to shop online to avoid going to brick and mortar stores where the chance of getting infected is high. There is also the probability that the products wanted by the customer are out of stock.

eGrocery

Ordering groceries online is on the rise because of and during the outbreak. Chinese on-demand local services have documented the incline in sales of food products. This trend is also catching up in the US, where grocery delivery volume is up by 30% within a week.

Food

Some business productions have changed their focus towards omnichannel retail, specifically e-commerce. Other businesses are redistributing their budgets and diversifying their operations constantly in response to the outbreak.

The pandemic has also provided businesses with the opportunity to expand into or accelerate their digital transformations.

Delivery

The lockdown restrictions in force in many countries have prevented customers from going outside. Food delivery networks have become the only source to generate income in this scenario.

The delivery process is not as simple during a crisis. Companies have increased employees to help customers access information quickly. Businesses also have systems to check if deliveries are possible to customers’ locations or not to make the process easier.

Adaptable Labour

Many hotels, restaurants, and other companies undergoing financial burdens are forced to close down. Hema (Alibaba’s subsidiary) shares its employees with multiple business organizations in China. Omnichannel companies in China, such as Meituan, Ele, etc are borrowing labor following this example.

Fashion Trends and Apparel

Companies in China have shifted their focus to endorsing their products and services in social networking sites and applications. Cosmo lady, the largest lingerie company and a leading company in China, has engaged all its employees including the CEO in a sales ranking system.

Luxury

An Italian business, Les Petits Joueuers, producing luxury shoes and bags is taking an innovative and technological approach to combat the decline in sales because of the outbreak. The company is opening an Augmented Reality (AR) showroom for its customers to try on their products. The company’s website is seeing more traction as a result of this.

Cosmetics

Lin Qingxuan, a cosmetics company based in China, shut down almost 40% of its outlets because of the virus. The company’s beauty advisors became online influencers to promote the brand. The company has achieved a 200% growth compared to last year because of this tactic.

Healthcare

Healthcare providers and pharmaceutical companies are providing online consultation services for free. Online tools to provide chronic patients with their medication have also been launched by companies to help patients.

A B2B sourcing platform of Alibaba seeks to match sellers with hospitals and local governments. It also ensures that the platform’s goods reach the hospitals in need.

Insurance

Insurance companies, like Ant Financial (previously known as Alipay), are opting to add Coronavirus-related insurance covers to its products. Customers are choosing to buy insurance online because of this venture. The outcome is an increase in customer loyalty and a 30% surge in the sales of health insurance products.

Deliberate Planning for coming years

Most of the companies in China are now in the post-recovery phase after moving on from the crisis. Moving forward, many organizations hope to achieve complete digitization in their business process including manufacturing operations.

Experts suggest that the present crisis can lead to more investment in omnichannel technologies. All the examples above predict the growth of the retail business’s digitization. The fact that E-commerce is able to withstand the current crisis is proof that it is robust enough to lead the digital transformation of our society.

E-commerce leading the way

The current change in consumer behavior with regards to worrying about being in public places can positively impact the e-commerce business. E-commerce is indeed solving a lot of problems in real-time and possibly saving people’s lives across the world.

E-Commerce activity in the US, especially the health and grocery sector, is thriving. Data suggests that online shopping of products like antibacterial soap and sanitizers has grown. Digital sales usually vary in different business categories with food & beverages holding 3.25%, apparel at 28.9% and electronics at 42.7% in the US.

Health & beauty-based products, groceries, etc. are likely to increase during times of physical retraction. Discretionary short-term spending can be on a decline as essential supplies will be stocked up. More people are turning to e-commerce despite the delay in deliveries as there is a lack of required products in stores and pharmacies.

E-commerce is going to represent 12% of the total retail sales in 2020, according to predictions. As the comfort associated with online shopping becomes higher and technology turns more innovative and intuitive, e-commerce may rise at a faster rate than older projections.

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