2020: COVID-19 Drives E commerce Growth Covid-19 has made drastic changes in customer’s shopping habits globally, pushing them to make purchases online to unprecedented levels. By May of 2020, eCommerce transactions reached $82.5 billion — a 77% increase from 2019. It would have taken four to six years to reach that number looking at traditional year-over-year increases.
Consumers have moved online to make purchases normally made in physical stores, such as food and household items, apparel, and entertainment. Many consumers say they’ll continue to use online storefronts until a COVID-19 vaccine is available.
COVID-19’s impact on e-commerce in poorer nations The pandemic is impacting actors in the digital economy differently; even though COVID-19 has pushed more consumers in developing countries to buy online, many e-commerce businesses in these nations have seen a slump in sales, according to an UNCTAD study published on 17 November.
Presenting hard-to-collect data from 23 countries, mainly in Africa and Asia, the research shows a stark divide between the pandemic’s impact on different actors in the digital economy.
While 58% of businesses selling their own products or services online have recorded a drop in monthly revenue, about 64% of third-party marketplaces have seen a spike in sales, according to data collected between March and July 2020 from over 250 companies, most of which have less than 10 employees.
“We found that wholly digital businesses, especially third-party online marketplaces, have been more resilient during the current crisis,” said Shamika N. Sirimanne, UNCTAD’s technology and logistics director.
E-payments up, but cash on delivery stays on top
The study reports a notable increase in digital financial services in the nations surveyed – predominantly least developed countries (LDCs) – as consumers tried to limit exposure to the virus while paying for food, medicine, health and hygiene products and other goods.
Some 64% of the e-commerce businesses that took part in the study reported an uptake in payments primarily through mobile money, followed by online and mobile banking, credit cards and other digital payment platforms.
Yet cash-on-delivery remains by far the preferred form of payment for e-commerce transactions in LDCs, the survey confirms.