E-commerce refers to the process of buying and selling goods and services using the internet and associated digital tools. Over the last decade, it has followed a steady, confident growth integrating a myriad of platforms, organizations, and customers from all over the world. The current global pandemic has had a major impact on e-commerce, making it at one point the only option for customers to satisfy their needs in terms of shopping for necessities and making other purchases. Such a turn of events opened up many opportunities but also caused several problems for those operating within the digital realm.
A recent report published by Eurostat mentions that in the European Union people aged 25-34 were the most active e-shoppers in 2020 compared to other age groups. At the same time, the most popular purchases in the EU-27 during 2020 related to buying casual and sports clothing, shoes, or accessories, with 62% of the respondents to the yearly survey conducted under Eurostat indicating this category. The second most popular online purchases were deliveries from restaurants (37%) followed by computers and phones (30%), cosmetics and beauty products (24%), and sports goods with 23 %.
In the United States, there was a spike in book sales with a growth of almost 300% at the beginning of the pandemic. Cleaning products grew by 235% while sports items and toy sales saw an average of 120% increase on a year-over-year basis. Overall, in the US, the total e-commerce sales for 2020 reached US$790 billion, a significant increase of 32% on 2019.
It is important to mention that the measures taken by national/local authorities to combat the effects of the pandemic had a direct impact on customer behavior. In the United States, for example, where hairdressers were closed during lockdown periods, the number of hair clippers sold online during this time rose by 166%.
The COVID-19 crisis has substantially advanced the expansion of e-commerce thus creating a number of unique opportunities for companies to penetrate the digital market and contribute to digital acceleration. Consider the fact that it took only five months for Disney Plus to hit 50 million paying subscribers in 2020, while Netflix had previously spent seven years reaching this benchmark. Moreover, as a means to achieve physical distancing, elderly customers started to engage in e-commerce more frequently and by doing so added another social stratum for companies to target.
Around 42% of consumers in the EU aged 55-74 years were making purchases at least once or twice during a 3-month period prior to the moment of being questioned using online platforms, while 35% of the same age group were placing between 3 to 5 orders within the similar time frame. Similarly, a report published by the Organization for Economic Co-operation and Development states that that the increase in the share of online purchases is the highest for users in their 60s.
As the pandemic spread, several countries imposed strict lockdown rules and border closures, thus restricting the movement of people and goods. As a result, many supply chains around the world failed completely while the majority was severely disrupted. The impact was more severe for smaller players who, due to a lack of internal resources and the reliance on third-party logistics services, found themselves unable to cope with the consequences of the crisis.
Despite the fact that governments aimed to foster e-commerce during the crisis, in many cases access to the digital market was restricted by rigid or outdated regulations. Moreover, in some cases, the elements of a ‘level playing field’ were missing thus leading to unfair competition and even a total lack of it.
