A Mini Project Report on the topic ‘Impact of covid 19 in E- commerce’

BY

MR Karthik MM
and
MR Gollaleshwara N pattar

Submitted to
Department of Management Studies & Research
CMR INSTITUTE OF TECHNOLOGY, BENGALURU

In partial fulfillment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under Guidance of

Prof. M.S. Kokila

Professor
Department of Management Studies
CMR Institute of Technology
BENGALURU

Department of Management Studies and Research

CMR Institute of Technology
#132, AECS Layout, IT Park Road, Bangalore - 560037

Batch - 2018-2020

CERTIFICATE BY THE COMPANY

 CERTIFICATE BY THE INSTITUTION

This is to certify that Mr Karthik MM and Mr Gollaleshwara N Pattar is a bonafide student of

Master of Business Administration of our Institution during 2020-22 batch, affiliated to
Visvesvaraya Technological University, Belgaum. The mini project report on the topic Impact of
covid 19 in E- commerce is prepared by them under the guidance (Internal) of Prof M.S. Kokila,
in partial fulfillment of the requirements for the award of the degree of Master of Business
Administration of Visvesvaraya Technological University, Belagavi Karnataka.

Signature of the Guide Signature of HOD

DECLARATION
We, Mr Karthik MM and MR Gollaleshwara N Pattar hereby declare that the mini project report
on the topic Impact of covid 19 in E- commerce prepared by us under the guidance of Prof M.S
Kokila , faculty of M.B.A Department of CMR Institute of Technology, Bengaluru .I also
declare that this report is prepared in partial fulfillment of the university Regulations for the
award of degree of Master of Business Administration by Visvesvaraya Technological
University, Belagavi. I have undergone an organization study for a period of four weeks. I
further declare that this report is based on the original study undertaken by me and has not been
submitted for the award of any degree/diploma from any other University /Institution.

Place: Signature of the Student

Date: USN

ACKNOWLEDGEMENT

I acknowledge the deep gratitude to all those who have made the mini project successful and
helped in preparing the report.
I would like to express my sincere thanks to Dr.Sanjay Jain, Principal of CMR Institute of
Technology, Bengaluru for his valuable support and guidance.

I am grateful to Prof.Sandeep , HOD of the Department of MBA of CMR Institute of

Technology, Bengaluru for her constant motivation and inspiration.

I thank my internal guide, Prof.M.S.Kokila of the Department of MBA of CMR Institute of

Technology, Bengaluru , for her constant guidance and support.

Mr Karthik MM and Mr Gollaleshwara N Pattar

CONTENTS

Sl. No Title Page No.

1 Introduction 02
2 Methodology 06
3 Scalability factors 08
4 Challenges faced 10
5 Conclusion 15
 6 Learning Outcome 17
7 Bibliography 20

Abstract

Impact of COVID 19 on E-Commerce

E-Commerce is the most considered and chosen way of purchasing different types of products
and services. Nowadays E-commerce has to be replaced with traditional purchasing. The only
reason behind is a lot of variety is available to customers to choose their own product at
fingertips from all over the world. Due to this covid19 pandemic, E-Commerce business is also
facing some challenges which are not expected before. This paper studies how covid 19 impacts
e-commerce business and change in demand and buying behaviour of consumers all of a sudden.
Keywords: E-Commerce, pandemic, customer, covid.

Objectives:

The objectives of present study are:

1. To understand the present status and trends of E-Commerce

2. To reveal the key variables influencing the increased usage of E-Commerce.

3. To analyze the impact of Covid 19 on E-commerce

Introduction

On 24 March 2020, the Government of India under Prime Minister Mr. Narendra Modi ordered a
nationwide lockdown for 21 days, limiting movement of the entire 1.3 billion population of India
as a preventive measure against the COVID-19 pandemic in India. It was followed by a 14-hour
voluntary public curfew on 22 March, after enforcing a series of regulations in the country's
COVID-19 affected regions. Ever Since then, the corona virus positive cases are increasing at a
rapid rate and hence the lockdown also got extended.

Phase 1: 25 March 2020 – 14 April 2020 (21 days)

Phase 2: 15 April 2020 – 3 May 2020 (19 days)

Phase 3: 4 May 2020 – 17 May 2020 (14 days)

Phase 4: 18 May 2020 – 31 May 2020 (14 days)

Phase 5: (only for containment zones): 1 June 2020 – 30 June 2020.

E-commerce business takes place when buyers and sellers conduct their business transactions
with the help of the internet. The term electronic commerce or e-commerce refers to any sort of
business transaction that involves the transfer of information through the internet. E-commerce
businesses are of following major types like

1) Business-to-Business (B2B)

2) Business-to-Consumer (B2C)

3) Business-to-Government (B2G) 4) Consumer-to-Consumer (C2C)

5) Mobile Commerce (M-Commerce).

E-commerce‟ and „online shopping‟ are often used interchangeably but at its core e- commerce
is much broader than this – it embodies a concept for doing business online, incorporating a
multitude of different services e.g. making online payments, booking flights etc.

E-commerce has experienced rapid growth since its humble beginnings with e-commerce sales
projected to grow to 599.2 billion USD by 2024. The COVID-19 outbreak saw e- commerce
sales spike 25% in March 2020 alone. The power of e-commerce should not be underestimated
as it continues to pervade everyday life and present significant opportunities for small, medium,
and large businesses and online investors. You don‟t need to look far to see the potential of e-
commerce businesses. Amazon, for example, which set the standard for customer-orientated
websites as well as a lean supply chain, is selling over 4000 items a minute from SMBs alone.

Benefits for People Buying ‘Online’:

1. Lower Prices: Managing an online storefront is far cheaper than an offline, brick and mortar
store. Typically less staff are required to manage an online shop as web-based management

systems enable owners to automate inventory management and warehousing is not necessarily
required (as we discuss later). As such, e-commerce business owners can afford to pass
operational cost savings on to consumers (in the form of product or service discounts) whilst
protecting their overall margin. Furthermore, with the rise of price comparison websites,
consumers have more transparency with regard to prices and are able to shop around, typically
purchasing from online outlets instead.

2. Accessibility and Convenience: Unlike many offline stores, consumers can access e-
commerce websites 24 hours a day. Customers can read about services, browse products and
place orders whenever they wish. In that sense, online shopping is extremely convenient and
gives the consumer more control. Furthermore, those living in more remote areas are able to
order from their home at a touch of a button, saving them time travelling to a shopping centre.

3. Wider Choice: For the past twenty years, the growth of online shopping has to a large extent
been based around increased choice. With an almost endless choice of brands and products to
choose from, consumers are not limited by the availability of specific products in their local
town, city or country. Items can be sourced and shipped globally. Interestingly, one recent study
found that consumers are actually starting to become frustrated by e-commerce sites

that offer too much choice. Whichever way you look at it though, more choice has likely been a
good thing over the long term.

While one Forbes survey data shows that women are more likely to be concerned about the
effects of COVID-19, it also shows that men are more likely to have it impact their shopping
behaviours. One-third of men, compared to 25% of women, reported the pandemic affecting how
much they spend on products. Additionally, 36% of men, compared to 28% of women, reported
it affecting how much they are spending on experiences (travel, restaurants, entertainment, etc.).

The Indian retail market is greatly divided up between the unorganised sector, which includes
about 13.8 million conventional family run neighbourhood stores and the organised retail sector
with a share less than 10%. The organised sector includes all organized brick & mortar stores
and online shopping sites. Despite the boom in B2C e-commerce sector in India, majority of
Indians continue to have more faith in the neighbourhood brick & mortar stores for shopping as
they prefer touching and feeling the products and negotiating discounts over-the-counter, before
buying.

In India, a great majority of B2C ecommerce retailers draw customers to shop online by offering
bargains such as free delivery, discounts, buy-one-get- one-free and exchange offers. However,
many Indian shoppers, known to be cost-conscious and conservative as a part of their value
system, are generally not attracted to making quick decisions based on promotions and
advertisements. Moreover, online shoppers, many-a- times, come across problems concerning
product delivery timelines and customer support services. Customers‟ perception of risk toward
online web sites is aggravated due to the inferior IT set-up used by several e-tailers, resulting in
hacking of personal information.

Enter the novel coronavirus which causes a highly infectious disease Coronavirus disease
(COVID-19) that has infected more than 4 lakh people worldwide. Since it spreads primarily
through contact with an infected person (when they cough or sneeze) or when a person touches a
surface that has the virus on it, the best way to guard against it is to stay at home .

This has increased online shopping usage, globally. In India, it has led to a rise in the number of
FTUs or first-time-e commerce-users in India, who had been so far inhibited to shop online. The
SARS outbreak that infected over 2700 people in 2002, too is known to have dramatically
changed people‟s shopping habits as they were afraid of shopping outdoors.
On 25th March, 2020, Big Basket - a key online grocery player in India had the following
message “We'll be back soon! We are currently experiencing unprecedented demand .

In light of this, we are restricting access to our website to existing customers only. Please
try again in a few hours.” So overwhelming was the response that it faced a breakdown due
to a steep increase in demand amid COVID-19. Grofers – a rival, had a similar kind of
message which said “Due to the sudden rush, we have stopped servicing many locations, but
we are working to increase capacity and will be resuming operations shortly.” Amazon –
one of the leading ecommerce players in the country, and the world, has announced on its
site that the customers are relying on them like never before in their social distancing and
self-quarantine efforts. Hence Amazon is temporarily prioritizing its available fulfilment
and logistics capacity to serve essentials such as household staples, packaged food, health
care, hygiene, personal safety and other high priority products. It is temporarily going to
stop taking orders for lower-priority products. Globally too Amazon has seen a surge in
orders and is raising overtime pay for associates working in its warehouses, during the
corona virus outbreak.

This spike in B2C ecommerce in India is of course due to existing online shoppers stocking
up on essentials given the corona virus outbreak and the lockdown imposed by the govern

However it also consists of perhaps two more segments – apart from the one that buys
online, regularly. A segment that did not shop online, given the inhibiting factors detailed in
the beginning of this article and another segment that up till now, was either ignorant about
online shopping or did not have a device or data plan. It would be interesting to check –
how many shoppers from these two segments switch to online shopping, even after the
coronavirus crisis is over.

The worldwide spread of the COVID-19 pandemic has disrupted how people buy products
and services and how they perceive e-commerce. The standardized lockdown rules across
India and the growing hesitation among consumers to go outside and shop for essential
goods have tilted the nation towards e-commerce.

Consumers have switched from shops, supermarkets, and shopping malls to online portals
for the purchase of products, ranging from basic commodities to branded goods.

Since the norm of social distancing has been initiated for almost the entirety of 2020, the
scope of online purchases and online businesses is expected to surge. Many people are
embracing the concept of online retail and the surge in FTUs (First Time Users) on e-
commerce sites is visible.

Shoppers are still spending time online:

While some regions began reopening in early May, others held off until June, and some are
waiting even longer. Even with slow roll reopenings happening globally, we’re still seeing
significant online shopping activity.

Page views are up 75% year-over-year and order count is up 57% for the same time period.
While this growth is down from April and May, it’s still more significant than the growth
we were seeing pre-pandemic. January saw 11% YOY growth for page views and 2%
growth for order count, and February saw 15% YOY growth in page views and 6% growth
in order count.
Methodology

This study is exploratory in nature and is aimed at knowing the changes that are being witnessed
in the e- commerce segment of the country during the COVID- 19 pandemic. For this purpose,
we have sourced the data from industry reports, news articles and various websites. The study
highlights the opportunities and challenges for online retailers during the pandemic. Further, data
was also collected from the customers.

This study is qualitative in nature. This research paper is written on the basis of primary data and
secondary data. The primary data is based on a questionnaire that contains questions based on
Pink Tax. The secondary data were collected from journals that are published online, newspaper
articles, research papers, websites.

● Method of getting responses: Exploratory Research

● Sampling method: Probability Sampling

3. SCALABILITY FACTORS FOR ONLINE RETAILERS DURING COVID-19

The following are the factors that have enabled e-commerce companies to enhance their business
during the pandemic.

1) Emergence of demand for new categories: Mobile phones were the biggest contributor to
online sales in the year 2019 (IBEF, June 2020). Also, the share of consumer electronics and
apparels was highest in e- commerce retail. However, COVID-19 crisis has led to a situation
where customers are now looking to buy necessities and groceries online. Online shopping
service for grocery is not available to all pincodes in the country. Hence, the online retailers can
find this opportunity to cater to the emerging needs of customers.

2) Increasing sales: The Bain & Company report 2020 has noted that the online market in the
country would expand from 300 to 350 million shoppers in the next 5 years and also the Gross
Merchandise Value would be pushed to $100 to $120 billion by 2025. This shows that an
amazing opportunity lies for online retailers to expand their sales in the coming years. As more
customers will gradually start favouring online stores for purchasing food, groceries, personal
care and health care products apart from consumer electronics and fashion, e-commerce retailers
will have to cater to the rising customer demand.

3) Local partnerships and co-existence: It is very unlikely that offline retailers could completely
replace their offline counterparts in countries like India. However, online retailers can take the
present situation as an opportunity to partner with offline retailers located in tier-2 cities and
beyond to increase their customer touch-points. Partnering with small and local retailers to act as
pick-up stores can help online retailers to expand their market. Also, the offline retailers can
increase their footfalls due to this. In this new era, co- existence of online and offline stores is
vital. One of the leading e-commerce platforms in the country, Amazon India, has launched a
program called ‘Local Shops on Amazon’ where local sellers can register on Amazon and serve
more customers from local areas (Amazon Services, n.d). Many shopkeepers across the country
have registered for this program and have added a wide range of products to the already large
product assortment of Amazon. The products range from consumer electronics to durables,
kitchen items to grocery and consumables, gifts, fresh flowers and cakes. This enables them to
boost their sales. Another e-commerce player Flipkart has also partnered with many kirana stores
with similar objectives.

4) Customer loyalty: Increasing online sales during a pandemic is not an absolute measure of
success for online retailers. Instead, online platforms have to focus on increasing customer
engagement with the online stores. Retaining the new customers can contribute to online
retailers’ profits in the long run. In this direction, online retailers along with their core activities
can provide sticky customer services such as video streaming, gaming, booking and payments in
a single platform.

CHALLENGES FOR ONLINE RETAILERS DUE TO COVID-19

Though the opportunities are many to improve scalability during extreme conditions, the online
retailers also have to address equally challenging issues to meet the increasing customer orders.
The following are some of the challenges posed to online retailers due to COVID-19.

1) Development of infrastructure: With the increase in demand online retailers have to improve
their infrastructure as well. Supply chains have to be improved to a great extent to ensure
customer satisfaction. Online retailers will also have to strengthen their relationships with local
retailers to provide services beyond the tier-2 cities.

2) Concerns over quality: As more customers are being attracted towards online stores,
compromise over quality is something which is not affordable to online stores. Online stores will
have to undertake more stringent quality checks to ensure quality products reach the customers.
This can go a long way in ensuring success to online retailers

3) Co-opetition: In no way online retailing can dominate offline retailing or vice-versa. Co-
existence is the only way to remain relevant in the ever-changing business world. Online retailers
should partner with local retailers to enlarge their reach. There is growing annoyance between
online and offline retailers in India. In such a scenario, competition between the two has to be
replaced by co-operation which would ultimately benefit the customers.

4) Social influence: The community is going to be a great influencer for customers to shop
online. Hence, online retailers have to work towards engaging the community through social
commerce. The marketing strategies of online retailers have to involve the customers to promote
the online retailer.

5) Increase customer mindshare: It is vital for the online retailers to retain the customers for a
long run. They have to invest more in sticky customer services. Providing services like video
streaming, gaming, booking and payments in a single platform along with providing their core
services can increase customer engagement with the platform.
Addressing these challenges effectively would ensure long run success to online retailers and
assist them in scaling their operations.

Shopping priorities have shifted:

Early in the pandemic, shoppers were focused on buying masks, toys to keep little ones
entertained at home, and stocking up on groceries. Currently, shoppers are focused on home and
garden improvements. Business and Industrial and Toys and Games are still seeing growth, but
not as significant as it was during the pandemic.

Review submission is picking up

Whether shoppers are finally receiving packages delayed in the mail due to COVID-19 or
they’ve come to pay it forward as a consumer and leave a review for others, review count is up
76% year-over-year compared to 38% YOY in May. Question submission, however, dropped,
from 62% YOY growth in May to 37% YOY growth in June.

Shoppers have also gotten more used to doing a lot of their shopping online, especially in
categories where online shopping wasn’t as popular pre-COVID. For example, shoppers have
finally settled into the norm of picking their produce digitally instead of in-person. Because of
this, we’ve seen a surge in shoppers leaving reviews for Food, Beverage, and Tobacco, leading
to a 176% increase in growth YOY. And with working from home still largely the norm,
shoppers are making sure they’re set up for the long haul. We’ve seen the largest increase in
questions for Software, with 102% growth year over year.
Analyzing the first impact on e-commerce
COVID-19 has been exceptionally different from what we have ever witnessed. As the world
was forced into complete shutdown, it’s safe to say that e-commerce was the saving grace,
helping millions of people stay home and procure what they wanted at their doorstep.

“Customers want to avoid stepping out unless it’s very critical. We are helping customers who
are stuck in that situation, and we are able to play a small part in helping (cater) to their needs,” –
Gopal Pillai, Vice President for Seller Services at Amazon India.

According to IBEF, the market opportunities for online commerce in India are expected to touch
$200 billion by 2026 from $30 billion in 2017. The report also states that the Indian e-commerce
industry is expected to overtake its US counterpart to become the second-largest market for e-
commerce in the world by 2034.

As of today, China is the largest e-commerce market in the world, with a value of around $672
billion.

Business data platform Statista stated that the consumer retail segment is expeed to see actn
increase in losses ranging from 3-23%, depending on the market. The report even included that
the average retail e-commerce revenue per user in the nation was $50 as of 2018, and is expected
to go up till $75 by 2024.

In the downside of things, lack of productivity during the nationwide lockdown resulted in the
loss of jobs, pay cuts, and finances. Shutting down of shops and family-based businesses has
made many people sway towards online retail to meet their financial requirements.

KEY FINDINGS

Third-party online marketplaces have performed better than e-commerce companies. In a

nutshell, wholly-digital business models have been more resilient to the current crisis. In terms of
sales trends, e-commerce companies have predominantly seen declines in sales, while nearly 60
percent of third-party marketplaces have seen increases . Additionally, half of the surveyed third-
party marketplaces onboarded new sellers on their websites. Close to 60 per cent of the third-
party marketplaces experienced a rise in the number of buyers.
The pandemic has accentuated the trend towards greater adoption of social media and growth in
sales through e-commerce websites. Shifts in consumption habits have also been observed,
driven by the need for sourcing essential items. Social media and own e-commerce shops are
important sales channels for the e-commerce companies. Both channels have witnessed higher
growth since the beginning of the COVID-19 crisis. The COVID-19 crisis has been associated
with a change in sales composition for more than 65 percent of them. Additionally, the survey
confirms that more customers have gone online to look for essential products. Groceries,
pharmaceuticals, health and hygiene products, restaurant delivery, as well as financial services,
are the sales categories which saw the largest increases in the COVID-19 crisis through third-
party online marketplaces.

E-payments have experienced fast growth, but cash on delivery remains prominent. Shifts in
consumption habits have been accompanied by a faster uptake of cashless payment methods.
Nearly 60 percent of e-commerce companies and 70 percent of online third-party marketplaces
are seeing relatively higher growth rates in mobile money payments, followed by transactions
through e-banking and credit cards. However, as cash on delivery remains prominent in absolute
terms, particularly in LDCs, it has continued to grow since the outbreak of the pandemic as
consumers have increasingly turned to e-commerce.

While the pandemic has been an opportunity for many digital-driven business models, business
outlook looks challenging for a significant share of e-commerce businesses. The COVID-19
crisis has adversely affected the costs of 66 per cent of the participants in the sample. Some 56
per cent of respondents reported that their workforce has remained stable so far or might even
increase in the short term. Still, a high share (44 per cent) of respondents have had to downsize
their business workforce.

The pandemic has reinforced pre-existing bottlenecks in the e-commerce ecosystem that
countries need to address to benefit from e-commerce development by enhancing their e-trade
readiness. Disruptions in supply chains and trade logistics, as well as unaffordable Internet
Access are the main challenges encountered by the respondents. Logistics and trade facilitation
had proved challenging for more than 60 per cent of respondents, linked to disrupted supply
chains due to lockdowns, business closures and closed borders. Additionally, more than 50 per
cent considered their operations to have been limited by logistical problems arising from
restrictions to movement. Half of the respondents referred to the high cost of broadband services.
Moreover, respondents called for improvements in e-commerce policies and strategies in the
COVID-19 response. The current pandemic has reinforced certain pre-existing bottlenecks in e-
commerce ecosystems of the surveyed countries in significant and interconnected policy areas
that are key for the development of inclusive e-commerce. Challenges in these areas have
affected the capacity of respondents to invest in e-commerce business growth, further
exacerbated gaps in information and communication technology (ICT) adoption, and at the same
time highlighted challenges related to consumer protection and fair competition, and a persistent
cash on delivery culture.

Public and private sectors have implemented a wide range of measures to mitigate the effects of
the pandemic. Governments and the private sector have taken a range of measures to respond to
the challenges brought by the pandemic and to mitigate its economic impact (see Figure 2).
According to survey responses, the most relevant measures taken include developing or updating
a national e-commerce strategy, which can rather be interpreted as the renewed impetus shown
by governments to turn e-commerce into a strategic economic sector amidst the pandemic.
Followed by increased e-commerce visibility through advertising campaigns, skills training
programmes and reduced e-payment transaction costs. Nevertheless, nearly 1 in 4 respondents
indicated that no measures had been taken in support for the e-commerce sector. Findings from a
public sector quick scan in 12 out of the 23 countries covered by the survey, show that 9 out of
12 countries have implemented forms of liquidity support for the sector. Other measures have
focused on reducing costs of Internet and e-payments as well as supporting logistics efforts.
 Policy responses and private sector measures have contributed towards business
transformation processes and enhanced consumers’ readiness to embrace e-commerce.
Respondents further reported that the challenges encountered, and measures taken by both the
public and private sectors, have contributed to lowering the hurdles for businesses and
consumers to use e-commerce services, while pushing businesses to seek greater business
efficiency and new market niches. They also noted that increased Internet access and online
financial transactions have facilitated business operations and minimized business’ losses in
some cases.

CONCLUSION

The COVID-19 crisis served as an accelerator for greater public-private cooperation. However,
access to financing for e-commerce businesses remains a paramount obstacle for economic
recovery and growth. Moreover, the COVID-19 crisis has spurred action in the e-commerce
sector. As much as 40 per cent and more of the respondents’ businesses have been or are
involved in either public-private sector collaboration initiatives or pure private sector ones. For
those not involved, lack of awareness of the initiatives and limited professional networks were
the main reasons. Only 14 percent of all respondents managed to obtain more funding. While 65
per cent of the businesses surveyed had tried to obtain additional financing, only one out of five
had been successful.

Respondents have highlighted the need for e-commerce enabling measures in COVID-19
recovery plans.

For the majority of the survey respondents, having a well-defined national e-commerce strategy
was seen as a top priority for the COVID-19 recovery plans. Reduced costs for Internet and
broadband access, as well as for mobile and other electronic payments were the other top
measures recommended to be taken to support the economic recovery.

the Indian retail market is greatly divided up between the unorganised sector, which includes
about 13.8 million conventional family run neighbourhood stores and the organised retail sector
with a share less than 10%. The organised sector includes all organized brick & mortar stores
and online shopping sites. Despite the boom in B2C e-commerce sector in India, majority of
Indians continue to have more faith in the neighbourhood brick & mortar stores for shopping as
they prefer touching and feeling the products and negotiating discounts over-the-counter, before
buying. In India, a great majority of B2C ecommerce retailers draw customers to shop online by
offering bargains such as free delivery, discounts, buy-one-get-one-free and exchange offers.
However, many Indian shoppers, known to be cost-conscious and conservative as a part of their
value system, are generally not attracted to making quick decisions based on promotions and
advertisements. Moreover, online shoppers, many-a-times, come across problems concerning
product delivery timelines and customer support services. Customers’ perception of risk toward
online web sites is aggravated due to the inferior IT set-up used by several e-tailers, resulting in
hacking of personal information.

Enter the novel coronavirus which causes a highly infectious disease Coronavirus disease
(COVID-19) that has infected more than 4 lakh people worldwide. Since it spreads primarily
through contact with an infected person (when they cough or sneeze) or when a person touches a
surface that has the virus on it, the best way to guard against it is to stay at home. This has
increased online shopping usage, globally. In India, it has led to a rise in the number of FTUs or
first-time-e commerce-users in India, who had been so far inhibited to shop online. The SARS
outbreak that infected over 2700 people in 2002, too is known to have dramatically changed
people’s shopping habits as they were afraid of shopping outdoors.

On 25th March, 2020, BigBasket - a key online grocery player in India had the following
message “We'll be back soon! We are currently experiencing unprecedented demand. In light of
this, we are restricting access to our website to existing customers only. Please try again in a few
hours.” So overwhelming was the response that it faced a breakdown due to a steep increase in
demand amid COVID-19. Grofers – a rival, had a similar kind of message which said “Due to
the sudden rush, we have stopped servicing many locations, but we are working to increase
capacity and will be resuming operations shortly.” Amazon – one of the leading ecommerce
players in the country, and the world, has announced on its site that the customers are relying on
them like never before in their social distancing and self-quarantine efforts. Hence Amazon is
temporarily prioritizing its available fulfillment and logistics capacity to serve essentials such as
household staples, packaged food, health care, hygiene, personal safety and other high priority
products. It is temporarily going to stop taking orders for lower-priority products. Globally too
Amazon has seen a surge in orders and is raising overtime pay for associates working in its
warehouses, during the coronavirus outbreak.

This spike in B2C ecommerce in India is of course due to existing online shoppers stocking up
on essentials given the coronavirus outbreak and the lockdown imposed by the Government (to
check its spread). However it also consists of perhaps two more segments –apart from the one
that buys online, regularly. A segment that did not shop online, given the inhibiting factors
detailed in the beginning of this article and another segment that up till now, was either ignorant
about online shopping or did not have a device or data plan. It would be interesting to check –
how many shoppers from these two segments switch to online shopping, even after the
coronavirus crisis is over.

-Commerce includes buying and selling of raw material, products, services or any kind of goods
and services through an electronic medium (internet) by the consumer, retailer, and business.
Whereas, e-commerce retail is the exchange of goods and services between an online retail
company and consumers (generally end-users). The e-commerce transaction can be of different
types such as business to Business or B2B (Cisco, Alibaba), Business to Consumer or B2C
(Amazon, Walmart) and Consumer to Consumer or C2C (eBay).

The factors which drive the growth of the e-commerce market before the COVID-19 pandemic
include strong and steady growth of internet users and rising awareness related to online
shopping, increasing online launching of products, low price due to bulk purchase and so on. In
addition, an increasing number of exclusive products in the market and lower prices of goods due
to the direct distribution channel and economies of scale further contribute to the growth of the
global e-commerce market.
Moreover, after the COVID-19 pandemic, social distancing and staying home is further expected
to push the consumers towards online shopping. However, uncertain consumer demand and
supply chain issues can affect the e-commerce industry. The COVID-19 pandemic issue can also
affect big merchants such as Walmart, which are experiencing a drop in casual shopping, supply
chain disruption, and an increase in purchases of essential toiletries, groceries, and other
products.

The global e-commerce industry report is segmented based products including electronics,
healthcare beauty & personal care and others. The outbreak of COVID-19 had an impact on
these segments due to the uncertainty in the supply chain and consumer demand across the globe.
E-commerce supply chains are mainly strained by COVID-19 as well as factory closures in
China, the US, and other countries. The most affected industry segment due to the COVID-19
outbreak is the electronics products as China accounted for most cases of COVID-19 and as per
the International Trade Union Federation (ITUF), the country is the largest producer of the
electronic and its parts globally. A considerable amount of China’s imports is encompassed by
electronic parts that are assembled into finished products, such as consumer electronic products
and computers, and then exported. However, due to the factory shut down electronics products
supply chain are now closed that further impacts the electronics e-commerce industry.

The e-commerce in various regions such as North America, Europe, Asia-Pacific and the Rest of
the world are impacted by the novel COVID-19 pandemic. The countries in which most of the
cases recorded include Italy, Spain, France, and Germany in Europe and China in Asia-Pacific.
China’s giant e-commerce service provider Alibaba has struggled to sustain growth rates during
an economic slowdown in its domestic market and faced with the uncertainty of the coronavirus
outbreak. Key companies getting affected in the market include Alibaba Group Holding Ltd.,
Amazon.com, Inc., Qoo10 Pte. Ltd., JD.com, Walmart Inc., Shopify, Rakuten Group, and eBay
Inc., and others. For instance, Amazon made some heavy investments in one-day shipping that
aren’t compensating off quite yet. In 2019, its net income fell by 26% and shipping costs rose by
46%. The coronavirus pandemic affects Amazon’s profits throughout the first half of 2020.

LEARNING OUTCOME

Online retailing has grown immensely over the years and there is enough headroom for further
growth. COVID- 19 has caused the e-commerce market to penetrate further, owing to customer
hesitation to shop from offline stores. Apprehensions regarding shopping from physical stores
and restrictions on movement have forced customers to buy online during the pandemic. For
consumers online retail gives access to a large assortment of goods and for sellers it gives an
opportunity to reach a large geographical area with limited resources. The sales of e-commerce
platforms have significantly grown comparatively to the pre-lockdown order volumes.

The results show that more customers are buying kitchen essentials, personal care products and
groceries online. The demand for essentials and hygiene products is increasing and the online
platforms have to ensure that the customer demand is met effectively so that satisfied customers
are retained. The finding that customers are gradually shifting their purchases online emphasises
that online platforms have to focus on improving customer experience.

This is because increasing sales is not enough to ensure growth in the long run. The online
retailers in India will have to invest more in infrastructure and also look for profitable tie-ups
with local retail stores. The major players in the e-commerce market in the country could
possibly achieve this more easily.

However, smaller ones would have to concentrate their energy and efforts in meeting the
increasing consumer demand. Offline retail stores too would have to reinvent themselves to drive
customers in the ‘new normal’ scenario. In countries like India, it is unlikely that online stores
could completely replace offline stores. Therefore, the offline retailers will have to become
smarter with the adoption of smart technologies.

Online retailers too would require constant innovations and coming up with programs to increase
customer engagement. In addition to this, the platforms have to ensure the safety and security of
personal and financial details of customers shopping on their websites by adopting suitable
monitoring measures. This would boost the confidence of both existing customers as well as first
time users to make purchases online and in turn would enhance customer trust.

BIBLIOGRAPHY

Source :https://retail.economictimes.indiatimes.com/re-tales/impact-of-covid-19-on-online-
shopping-in-india/4115
source:https://www.researchandmarkets.com/reports/5013567/impact-of-covid-19-on-the-e-
commerce-market

Bain & Company (2020). How India shops online. Retrieved from
https://www.bain.com/globalassets/noindex/2020/bain_report_how_india_shops_online.pdf

Impact of COVID-19 on online shopping in India. Retrieved from

https://retail.economictimes.indiatimes.com/re-tales/impact-of-covid-19-on-online-shopping-in-
india/4115

IBEF. (May, 2019). E-Commerce. Retrieved from https://www.ibef.org/download/E-

Commerce_Report-May- 2019.pdf

https://yourstory.com/2020/07/covid-19-significance-ecommerce-india-online- shopping?
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UNCTAD. (2020). COVID-19 and E-Commerce: Impact on Businesses and Policy Responses.
Retrieved from https://unctad.org/system/files/official-document/dtlstictinf2020d2_en.pdf