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E-Commerce and COVID

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Building Blocks

In India, the concept of e-commerce formally came into existence around the year 1991. It was due to the advent of the internet for commercial use. However, early on, a majority saw the internet as a luxury that they did not need. Hence, people could not fathom the possibilities it could open up.

It was in the year 2002 when the Indians practically explored the field of e-commerce when the IRCTC introduced the Online Passenger Reservation System. It was probably the first time that the public widely accepted the internet as something fruitful. After the unpredicted success in the railways, many airline companies like Air Deccan, Spicejet opted for a similar online ticket booking system. Airline agencies encouraged web bookings to do away with the commissions given to the agents. Hence, gradually people started to realize the ease e-commerce had brought in their lives. There were no long queues for ticket bookings, no shoe-leather costs of visiting the agents, to say a few. Thus, it laid down the path for the e-commerce industry in India. 

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Way Ahead

Coming up of Flipkart in 2007 was another catalyst for the industry. In a way, it re-launched online shopping. Over the years, other companies like Amazon, Jabong made their way into the Indian market. However, in recent years, there has been an exponential growth in the industry. The key drivers of growth in the Indian e-commerce have been: increasing broadband internet, 4G penetration, growing living standards, busy lifestyle, ease of buying products, increasing investment in advertisements, wide variety and evolution of the online marketplace. Today, companies like Amazon India, Flipkart, Paytm have made it to the list of top 10 e-commerce companies in India with Amazon India at the top. 

Statistics show that in 2009, the market was worth about $3.5 billion. According to Google India, there were 35 million online shoppers in India in 2014 Q1. The industry is following an upward trajectory as India’s E-commerce revenue is expected to jump from US$ 39 billion in 2017 to US$ 120 billion in 2020. It is growing at an annual rate of 51 percent, the highest in the world.

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Impact of COVID-19

Apart from the expected boost, the novel coronavirus outset in the world has come as a boon for e-commerce companies. As more and more people are avoiding moving outside, there has been a preference for buying goods online. To cite examples- groceries, vegetables, and other daily need items. An increasing number of employees are working from home, and thus, these firms are doubling down to bring convenience to the consumers and win their trust.

“Orders have grown by 20-30 percent compared to last month, and it is picking up pace as more people decide to order online. It is partly driven by new customers who are ordering online as they avoid going to the (physical) stores. Besides, some existing customers are stocking up many more products over fears of things running out,” said Vipul Parekh, co-founder of BigBasket, one of the largest online and food grocery stores. 

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There has been a surge in demand for sanitizers by 559%, face masks by 334%, hand washes by 81%, disposable gloves by 66% as reported by Sandip Chhettri, COO,

Similarly, Snapdeal reported a hike in the sale of sanitizers, masks and hand washes. “We have witnessed an increase in the purchase of 4G routers as more users equip themselves to work from home,” said Snapdeal. An increase in sales of cleaning liquids, microfiber dusters portrays growing emphasis on hygiene. More than 50% of the masks listed for sale were sold out on the same day as India reported the first suspected case of COVID-19.

MoEngage, intelligent customer analytics, and cross-channel engagement platform has over 400 million monthly active users. It is witnessing an increase in the number of users choosing to shop online for day-to-day items.

While keeping up with the sudden increase in demand, companies are taking steps to ensure the health of their staff. Bigbasket has taken initiatives to monitor the body temperatures of all the delivery executives before and after they deliver products. Besides, all the employees wear masks and gloves and are wiping the crates regularly.

Global Trend

According to experts, a similar pattern of growth in e-commerce has been there in other countries like the US, China, during the COVID-19 outbreak. A large part of the population globally has relied on internet services to get their daily supplies. The rationale behind the same lies in the hardships the pandemic has brought in the lives of humankind. 

E-commerce firms are putting in extra efforts to monitor their supply-chain and delivery networks to meet the ever-increasing demand. Clearly, the outbreak is likely to have adverse impacts on ride-hailing and online food ordering segments. However, it can be seen as a golden opportunity for the E-commerce industry to build its customer base. Also, in cases of lockdown, the E-commerce giants would be more than willing to cooperate with the government to provide essential services to the people. On one hand, coronavirus would seemingly spell doom for lakhs of people worldwide. However, it might act as the harbinger of prosperity for the Indian and the global e-commerce industry.  to read about how the pandemic affected the consumption trends worldwide.


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