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Impact of COVID-19 on E-commerce in India

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Journal of Interdisciplinary Cycle Research ISSN NO: 0022-1945

Impact of COVID-19 on E-commerce in India

Nura Sani Uba
Department of commerce and management studies
Sandip University Nashik
Nashik, India
email: nkwalwa@gmail.com

Muhammad Sani Khamisu

Department of commerce and management studies
Sandip University Nashik
Nashik, India
email: mohdsanikhamisu@gmail.com

Abstract-The COVID-19 pandemic which was believed to
have originate from the city of Wuhan in the people’s
republic of China, has crippled the world economy caused
unimaginable billion dollars revenue losses to government
and businesses yet it present an opportunity to the
ecommerce industry to benefit from the lockdowns caused
by the pandemic. This study was carried out to assess the
effects of Covid19 on Ecommerce sector in India. Buying
and selling transactions through online platforms
(ecommerce) is one of the major sectors of Indian
economy, this prompt the baseline for this paper to assess
the positive and negative impacts of ecommerce on the
ecommerce industry in India. The study adopts qualitative
approach and data were collected from secondary sources
of newspapers, magazines, and websites and so on. It is
discovered that the novel corona virus has both negative
and positive effects on the Indian ecommerce industry.
Therefore it is concluded that with the current pace at with
customers patronize the ecommerce industry, the projected
US $200 billion market size of the ecommerce industry in
India will be achieved much sooner than later.
I. INTRODUCTION
The outbreak of the novel corona virus known as COVID-19
in the late 2019 has disrupted not only businesses but almost
all human activities leading to total lockdown of almost the
entire world. Thanks to these lockdowns, many businesses
has suffered huge losses, consumers have their demands
unmet, workers loses their jobs, and governments loses
taxes.Ecommerce as a means of transacting goods and
services using the internet is not an exception to these
disturbance as restrictions were impose by governmentson
eligible items to delivery of only essential items during the
peak period of the pandemic. But as the pandemic subsided
and lockdowns relaxed,Ecommerceprovide the safestway for
individual and businesses to conduct their business. Even
before the pandemic ecommercehad gained momentum as
businesses adopted various means of advertising their
products ranging from customized websites and social
media platforms such as Facebook, Twitter, Instagram,
YouTube, etc., but the pandemic has fuelled a digital surge
that shows how important ecommerceis to ordinary life not
only in India but all over the world. Many retail businesses
that were previously not utilizing the digital platforms for
their businesses have join the trend as it is seems as the
easiest way for which business can survive during this
pandemic as it provide efficient way of avoiding crowd, thus
maintain social distancing orders. The famous Amazon, one
of the largest ecommerce participants in the India, and the
world, mentioned in their website that the customers were
relying on them more than ever before due to their social
distancing and self-quarantine efforts. Therefore it is against
this background that this paper intend to answer the
following question; whatare the impacts of COVID-19
pandemic on ecommerce businesses in India?
II. OBJECTIVES OF THE STUDY
i. To highlight the negative impacts of COVID-
19 pandemic on ecommerce business
ii. To outline the positive impacts of COVID-19
pandemic on ecommerce businesses
III. WHAT IS ECOMMERCE?
Ecommerce, also known as electronic commerce or
internet commerce, is the actof buying and selling of goods
or services over the internet, and the payment of money and
transfer of data to execute these transactions. According to
C. Nisha and G. Sangeeta, (2012),ecommerce is the use of
electronic communications and digital information
processing technology in business transactions to create,
transform, and redefine relationships for value creation
between or among organizations, and between organizations
and individuals.
The main types of electronic commerce are: business-to-
business (B2B); business to- consumer (B2C); business-to-
government (B2G); consumer-to-consumer (C2C); and
mobile commerce (m-commerce)

Volume XII, Issue VIII, August/2020 Page No:435

Journal of Interdisciplinary Cycle Research
IV. ECOMMERCE IN INDIA
Like many countries in the world, ecommerce has gained
momentum in India with the industry growing at an amazing
rate. Triggered by increased use of smartphone, the launch
of 4G networks and increasing consumer wealth, the Indian
e-commerce market is expected to grow to US$ 200 billion
by 2026 from US$ 38.5 billion in 2017.That projection was
based on customer and market research in a pre-COVID-19
world. But recently, both the market structure and consumer
buying habit has altered significantly and there is clear
possibility that the ecommerce industry will grow to US$
200 billion mark much sooner than later.
V. IMPACTS OF COVID-19 ON
ECOMMERCE IN INDIA
The COVID-19 pandemic had led to the closure of all
physical markets and brick and mortar shops as a result of
which people began to switch from buying goods and
services in malls and supermarkets to ecommerce for
purchase of everyday commodities. This cause a sudden
spikes in online orders for companies such as Flipkart,
Amazon, Bigbasket, Grofers and so on. This paper explore
the negative and positive impacts of the novel corona virus
on the in Indian ecommerce industry.
A. THE NEGATIVE IMPACTS
 Obstructions in logistics and delivery services
The outbreak of COVID-19 pandemic became a testing tool
for wholesale and logistics services together with some key
features of supply chains like no other event in recent
history. Resulting from the lockdowns imposed by
government authorities to contain the widespread of the
virus, e-commerce for goods suffered a very great obstacle
as supply chain disruptions. Many businesses continue to
observe supply challenges due to the suspension of
manufacturing activity, decreased production as well as low
labor supply. The firms with warehousing facilities in
impacted areas also faced difficult decisions on how or
whether to continue manufacturing their products.
Therefore, this pandemic has brought forward the
vulnerabilities of supply chains and also tested the ability of
businesses to adjust swiftly.
 Disruption of supply chain and cross border
transaction
The international transportation and logistics services upon
which all e-commerce and more traditional trade
transactions rely have also been severely affected by the
introduction of new health regulations that have disrupted
land, sea and air cargo transportation. The cancellation of
more than a million passenger flights, which were typically
used to transport postal shipments and other small
consignments, has significantly reduced transport capacity
and increased shipping prices for cross-border B2C and B2B
transactions. According to the International Air Transport
Association (IATA) and the Universal Postal Union (UPU),
problems were aggravated by administrative and regulatory
bottlenecks, as well as crew quarantine conditions, which
Volume XII, Issue VIII, August/2020
ISSN NO: 0022-1945
prevented cargo flights from keeping pace with demand.
Commercial B2B e-commerce relying on large-scale
imports via maritime transport has also been affected.
Customers have therefore been faced with delays or
cancellations of their orders, even on the day of delivery.
 Loss of Revenue
One of the major significant segments of online purchasing
by value such as tourism and travel has dropped as a result
of the COVID-19 pandemic for obvious reasons. The e-
commerce sector in India is estimated to have lost $400
million worth of sales during the COVID-19 pandemic, as
operations were heavily disrupted forcing several platforms
such as Flipkart and BigBasket to temporarily suspend
services. What's scarier is that the losses are set to grow to
$1 billion during the entire period of the nationwide
lockdown, as per new data from market research and
advisory firm Forrester.
 Decreased demand for non-essential
commodities
The demand for non-essential items such as smartphones
and fashion accessories has been significantly low during
the pandemic. And according to expert in the industry
fashion and smartphones contribute over 50% of sales on
ecommerce. This may not be unconnected to the fact that
many workers are at home and their incomes dropped,
therefore they can only afford the essential items.
B. THE POSITIVE IMPACTS
 Increased customer patronage of ecommerce
platforms
The pandemic has created a digital surge which makes
customers more inclined to patronage ecommerce than prior
to the pandemic. According to survey conducted by local
circles-a community social media platform-More than 50%
of consumers have ordered products online that they would
normally purchase at the store.
Online customer
orders, %
59
41
before COVID-19 After COVID-19
 Increased demand for services delivered
electronically
In India, e-commerce in services that can be delivered
electronically has flourished, with demand rising sharply.
Though it may be a short-term situation that might not last
longer than the current crisis, as with online shopping,
Page No:436
Journal of Interdisciplinary Cycle Research
longer-term shifts in customer habits may potentially make
individuals and business more habitual to consuming online
services in both work and personal setting. One example is
media services. Facebook reports that it’s online messaging,
voice and video call services have grown up by more than
50 per cent. Instantly the crisis mandates the forceful closure
of businesses and schools, demand for online services and
collaboration tools as well as learning platforms grew
dramatically. Platforms such as Zoom, Amazon chipped in,
offering the public sector free access to its remote education,
remote working and research tools, some media outlets like
Cisco made their Webex video conferencing tool free of
charge.
 Improved customer service
E-commerce businesses are also innovating new ways of
serving customers during the pandemic to maintain their
competitiveness. Online food ordering and delivery
platforms like Swiggy and Zomato have introduced
contactless deliveries to allay heightened apprehensions
related to hygiene that exists right now. Besides these new
platforms, gaming and Over the Top (OTT) media are
booming as screen times of people have risen exponentially.
VI. Conclusion
The COVID-19 pandemic was no doubt one of the greatest
catastrophe that the world has experienced, with millions
infected, hundred thousand lives lost, businesses displaced
and unemployed rose to the highest in history. While many
business witnessed their worst nightmare, the ecommerce
industry was one of the least affected by pandemic. In India
the industry on the one hand has suffered a series of
setbacks ranging from obstructions in logistics and delivery
services, Disruption of supply chain and cross border
transaction, decreased demand for non-essential items and
loss of billion dollars of revenue. On the other hand,
ecommerce industry in India has benefited from the shift of
customer behavior to patronized the digital platforms in
Volume XII, Issue VIII, August/2020
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ISSN NO: 0022-1945
order avoid crowd and stay safe. With increased in demand
for electronic services and improved customer service, the
ecommerce industry moves towards achieving the US $200
billion milestone even sooner before the projected year
2026.
REFERENCES
[1] Kemp, S. (2019), Digital 2019: Global Digital
Overview, Hootsuite and We Are Social, 31 January 2019
[2] Aneesh R. (2016) COVID-19 impacts: consumers move
towards digital
[3] Amin S. et al A review paper on E-commerce
[4] Local circles ecommerce survey
https://www.localcircles.com/a/press/page/ecommerce-non-
essentials-shopping-survey#.Xu9RRkUzbIV
[5] E-commerce shopping more frequent because of
COVID-19- WARC Report
https://www.warc.com/content/paywall/article/WARC-
DATAPOINTS/Ecommerce_shopping_more_frequent_beca
use_of_COVID19/132077
[6] https://datareportal.com/reports/digital-2019-global-
digital-overview
[7] Covid-19 spike pushing people towards ecommerce:
Survey https://www.outlookindia.com/newsscroll/covid19-
spike-pushing-people-towards-ecommerce-survey/1865055
[8] E-commerce in India
https://www.ibef.org/industry/ecommerce.aspx#:~:text=Indi
a's%20internet%20economy%20is%20expected,the%20high
est%20in%20the%20world.
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