The COVID-19 pandemic has drastically changed how we live our daily lives. It has also changed the way businesses normally function. They have forced businesses to adapt to the current situation and adopt new business plans and practices or perish. In this article, we will go over some of the most notable ways that the pandemic has changed how and in what way businesses function, and also how everyone decided to start an e-commerce store.
Digitalization in Overdrive
Most nations in the world have adopted lockdown measures at one point or the other. This has caused major issues for all businesses, big or small. With customers unable to reach the goods/services that businesses normally offered, businesses needed to change. This has been done with the rapid digitalization that most businesses (most notably in the food industry) had to undergo. Since the pandemic started businesses have put a priority on digital presence and how they interact with their customers. This isn’t, however, a gradual transition. It has happened immediately and without holding back. In these dire situations for a business, they have to adapt ASAP or face a longer loss of capital. Not to mention the number of customers that their competition will steal due to them not being able to digitalize fast enough.
Who Benefits and Who Loses?
There have been dramatic shifts in e-commerce around the world caused by COVID-19.
- Winners:
In most developing nations there has been a significant spike in online shopping. The most notable example would be the e-commerce platform “Jumia“ from Africa which has reported an incredible increase of online sales of over 50% during the first half of 2020. This has led to increased trade among African nations and the rest of the world as well due to higher demand in the local markets.
Meanwhile, we have seen substantial increases all over Southeast Asia. E-commerce has grown notably in these nations during their lockdown periods. During them, online shopping has risen by 32% across all of the nations there.
- Losers
On the other hand, there have also been international players that couldn’t capitalize on this trend. They are the least developed nations. Reasons for this are numerous, they don’t have the existing infrastructure to even be able to make a digital leap, they do not have a digitally literate population that cannot use these innovations, or simply the lack of recognition of these important factors and the importance of e-commerce from the government and local business owners. So for them, they are just falling behind even further from the rest of the world that is actively accelerating their digitalization.
A Focus on Technology
Technology has never been as important as it is now. The pandemic has practically made the IT sector a necessity for every business. It is simply no longer feasible to not have a digital presence since a lot of potential customers were/are unable to physically reach the stores and businesses, those owners needed to change their approach and digitalize themselves in order to retain their customer base. With the growing importance of technology, we have seen massive growths from businesses around the world, and at a fast rate. More and more innovations in technology are being implemented in order to cater to the customers more and more.
Change in Consumer Habits
Under these circumstances, changes needed to be made for businesses to stay relevant, and with them so did consumer habits change. As we have previously mentioned, there has been a sharp rise in online shopping across developing nations, but on a more global scale let’s look at some of the changes in businesses. Speed became a prevalent factor, the time that it took to deliver an item became as crucial of a factor as the cost of it. When people have a lack of mobility, they value every second that it takes for an item to arrive. With this taken into consideration, businesses had to make their services faster and work on ways how to make them more convenient. Customers now expect their supermarkets to have integrated websites and delivery systems.
The Growing Importance of E-commerce
With e-commerce making incredible growth and leaving a lasting impact on the financial layout, governments are being pressured to make digital literacy a more important policy for nations. In order for e-commerce ecosystems to be able to work, they need a user base that knows how to handle it and interact with it. Governments are not the only ones that need to implement changes, this is also a growing factor for business policies to improve their overall digital infrastructure in order to properly implement new payment platforms.
Overall there is a growing need for the government to cooperate more with the private sector in order to secure better opportunities for growth that we have only caught a glimpse of.
The consequences of the pandemic are clear, they have forced businesses to adapt and focus on developing new technologies. We can see that future businesses will need to incorporate their digital presence, accessibility, and technological capabilities if they want to succeed in a COVID or post-COVID world.
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