Title

The Gap between online and physical marketplaces (Challenges of shift in demand towards

e-commerce)
 Contents

Executive Summary.........................................................................................................................2

The change of business perspective after COVID...........................................................................3

Challenges of the use of e-commerce in the business sector...........................................................3

Restriction of business growth due to issue.....................................................................................4

Challenges of selling products.........................................................................................................4

Business developmental challenges under the same issue..............................................................5

Lack of e-commerce participation...................................................................................................5

References........................................................................................................................................7
 Executive Summary

The COVID-19 problem has given e-growth commerce a boost into new industries,

customer segments, and product categories, most likely causing a long-term move away from

luxuries and toward necessities. The ensuing adjustments from traditional retail to online

shopping are probably considerable across all nations. For instance, senior customers who started

using e-commerce to increase physical distance may continue to follow some of their newly

formed routines during the current crisis. On the supply side, a lot of owners of traditional brick-

and-mortar stores—many of which were forced to close their operations entirely—now view e-

commerce as a potentially vital complementary or alternative sales channel. Hence businesses

are facing the challenges of shifting their businesses and the use of e-commerce to drive their

sales because all of this requires investment. But due to covid-19, businesses have already lost

their revenue to a level that has not been recovered until now. Hence, it is a huge difficulty for

firms and businesses, and they are trying to find solutions. Furthermore, this issue of the shift in

demands and the gap between the physical and online marketplaces brings other several issues

with it that businesses have to face. Due to low levels of digitalization and difficulties acquiring

and integrating new technology, changing current work processes by introducing teleworking or

an e-commerce sales channel is particularly difficult for these organisations. Increasingly more

companies are trying to nimbly mix and switch between offline, internet, and omnichannel sales

channels; nevertheless, regulatory confusion regarding which rules to obey ad hoc might

influence them. Even while many of these problems existed before the COVID-19 crisis, the

current situation has increased the urgency of governmental action.

 The change of business perspective after COVID and e-commerce challenges

Today's highly increased competition makes it difficult to operate a firm successfully.

Numerous difficulties are affecting businesses. The Industrial Revolution brought forth a great

deal of social change, and capitalists supported civilization until the age of technology. The

separation and gap between physical marketplaces and online commerce is the most significant

problem that businesses face. People are unsure of whether to operate their businesses offline,

online, or both as a result of this trend. After covid, the very biggest issue businesses are facing

is to shift the physical stores online. Many traditional business owners operated successful

operations before Covid, but now that the time has come for them to adopt technology, they are

unable to do so because all of their prior experience has been with physical storefronts. There are

ongoing participation gaps in e-commerce for businesses, particularly SMEs (OECD, 2020).

Enterprises participated in e-commerce at a rate that was less than half that of large businesses in

the majority of OECD countries in 2017. Due to low levels of digitalization and difficulties

acquiring and integrating new technology, changing current work processes by introducing

teleworking or an e-commerce sales channel is particularly difficult for these organisations.

 Source: (Munoz, 2021)

Challenges of the use of e-commerce in the business sector

If an internet business is launched, they are unfamiliar with advertising tactics like

Facebook advertisements, YouTube ads, etc. As a result, their businesses are failing (Post, 2022).

As a result of not knowing the appropriate platform and being unable to identify the precise

audience, firms are unable to decide where to invest in their advertisements. As we all know,

engaging with accurate audiences is essential for online businesses. When individuals still had

real shops, they would just purchase the goods and put them in their shops or markets. But today,

we need attractive product images on websites. Some businessmen lack the skills necessary to

take images that accurately depict a product. Since customers who shop online can't touch things

in person, they need high-quality images that nearly cover the entire product. Due to the

constraints of their technology or, because they select unreliable partners or agencies to help

them manage their projects, certain online retailers may suffer growth challenges. If retailers

want to succeed, they must have a strong technical foundation (Vijai and Nivetha, 2020). The

finest shopping cart, inventory management, email, CRM, analytics, and other programs must be

chosen.

The image below shows the e-commerce sales worldwide from 2014 to 2025, which is

expected to increase. The business who has not developed their e-commerce sales are facing

challenges and are less profitable.

 Source: (Rajnerowicz, 2022).

Restriction of business growth due to the issue

Additionally, choosing the wrong partners or businesses to lead marketing campaigns or

help with project implementation might limit growth. Selecting business partners is a

prerequisite for online sellers. Businesses are also struggling with a generational difference.

Generation X is the main decision-makers, entrepreneurs, and business chamber members. They

undoubtedly have assets and money to invest, but because they are stubborn and uneducated,

their assets are useless (Setyowati et al., 2021). On the other hand, teenagers and young adults

know about operating a business online, courage, and access to new skills like product

management. The problem arises because parents do not believe in new technologies and

investing online, which ultimately has an impact on the child and results in no investment.

The problem that businessmen face is growing competition and a low-profit ratio. Since

the firm has moved online, it is necessary to include all relevant product information along with

a fair price (Andonov et al., 2021). Owners are still waiting for clients even after all the boxes

have been filled, but reviews on websites, developing trust, and lower prices are still necessary
right now. Scams and fraud are commonly done, which negatively impacts honest people. The

owner has to sacrifice his profit to maintain sales, so he lowers the price in comparison to other

vendors, but this has a negative impact.

Challenges of selling products

Another challenge in this aspect that business face is that not every product can be sold

online. There are social reasons why people are not moving their businesses online. Some

products are conventional and can only be exchanged in a particular society, but as products

move online, you need a universal product that can be purchased by many people because people

from all societies have access to it. However, because a normative product needs the element of

generality, it can be difficult to sell. Businesspeople from the X generation operate their stores or

markets at specific times, dealing with customers instead. Customers are aware of the opening

and closing times of these stores. However, people always have a smart device in their pocket.

They can begin to visit websites in the middle of the night. Here, a strong online presence will

function and boost sales. For business owners that operate physical outlets during specific hours,

this is a connected issue. This will have a significant impact on their sales and harm the brand's

reputation

Business developmental challenges under the same issue

The owners of physical stores have learned how to keep them secure, but in the case of

online stores, cyberattacks can endanger the security of the eCommerce website by infecting it

with viruses. Worse yet, they can endanger the security of the customer's sensitive data, harming

your brand's reputation and driving away potential customers for good. In the case of many

countries nowadays, the majority of businesses are held by people with traditional upbringings

(Javed, 2020). As they are constantly left with certain nitty-gritty tasks like fulfilling big orders
via basic mail, it becomes quite difficult for them to trust. buying bitcoins with cash in dollars.

Purchasing Amazon stock. Here, the businessman himself turns into a barrier to his development.

One needs a variety of skills, such as product management, chat responses, monthly reports,

video editing abilities, and image correctness, to run an internet business successfully (Karine,

2021). It is difficult for a new person to branch out an online business because all these skills

cannot be acquired by one person, so the owner must hire people to do all this stuff, which

ultimately adds to his expenses. This is because a small setup that is unexpected to start with

requires these upfront costs.

Lack of e-commerce participation

Less than half of small firms in most countries participate in e-commerce compared to

large businesses. Due to low levels of digitalization and difficulties acquiring and integrating

new technology, changing current work processes by introducing teleworking or an e-commerce

sales channel is particularly difficult for these organisations. Due to the location or brand

recognition, the physical stores attracted a certain type of customer (Ruiz, 2022). However, there

are no borders in e-commerce. Customers can simply make purchases from businesses located

outside of their nations. Businessmen face a significant hurdle when they finish meeting all of

the demands of their clients yet remain blank. They require relevant traffic if they want to

generate sales. For relevant traffic, they want effective advertising, which requires both good

financial resources and a solid reputation that will win over potential customers. Many of these

divisions have been made worse by the COVID-19 problem. Additionally, a rising number of

businesses seeking to nimbly mix and switch between physical, online, and omnichannel sales

channels may be impacted by regulatory uncertainty about which regulations to follow abruptly

(OECD, 2022). Although many of these issues were present before the COVID-19 crisis, the
current circumstance has made policy action much more urgent. During the COVID-19 crisis,

several nations have already taken steps, particularly to assist the digitalization of business

models, while many others still face significant obstacles.

References

Andonov, A., Dimitrov, G. P., & Totev, V. (2021). Impact of E-commerce on Business

Performance. Management, 78, 146-157.

Javed, A. (2020). Prospects and Problems for E-commerce in Pakistan. Asian Journal of

Economics, Finance and Management, 131-139.

Karine, H. A. J. I. (2021). E-commerce development in rural and remote areas of BRICS

countries. Journal of Integrative Agriculture, 20(4), 979-997.

Muñoz, A. (2022). 11 Challenges for ecommerce in 2022 | Sales Layer. Blog.saleslayer.com.

Retrieved 15 October 2022, from https://blog.saleslayer.com/challenges-ecommerce.

OECD. (2020). E-commerce in the time of COVID-19. OECD. Retrieved 15 October 2022, from

https://www.oecd.org/coronavirus/policy-responses/e-commerce-in-the-time-of-covid-

19-3a2b78e8/.

Post, J. (2022). Common E-Commerce Challenges Businesses Face - businessnewsdaily.com.

Business News Daily. Retrieved 15 October 2022, from

https://www.businessnewsdaily.com/6028-small-ecommerce-challenges.html.

Rajnerowicz, K. (2022). Online Shopping Statistics: Ecommerce Trends for 2022. Tidio.

Retrieved 15 October 2022, from https://www.tidio.com/blog/online-shopping-statistics/.

Ruiz, I. (2022). 10 common marketing challenges or problems that most businesses will face -

Mailrelay. Mailrelay. Retrieved 15 October 2022, from

https://mailrelay.com/en/blog/2018/10/23/10-common-marketing-challenges-or-

problems-that-most-businesses-will-face/.
Setyowati, W., Widayanti, R., & Supriyanti, D. (2021). Implementation Of E-Business

Information System In Indonesia: Prospects And Challenges. International Journal of

Cyber and IT Service Management, 1(2), 180-188.

Vijai, C., & Nivetha, P. (2020). E-commerce on cloud: opportunities and challenges. Advances

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