“CHALLENGES OF TRADITIONAL MARKET DURING COVID-19 FUELED THE

RISE OF E-COMMERCE”

INTRODUCTION

Through years of exposure in both local and foreign trade, the modern-day Filipino was
born with an entrepreneurial spirit. According to research, millennial entrepreneurs have
launched at least twice as many businesses compared to their Baby Booming predecessors. In
fact, 55% of millennials in a local study indicated owning a successful business and reaching
financial independence as an important value in their lives. Luckily for this generation, they are
equipped with a highly distinct tool that allows them to fulfill their entrepreneurial aspirations –
the internet. The internet has changed the way people live, think, and do business. With the
emergence of e-commerce, international trade became possible on an individual level.

E-commerce, also known as electronic commerce or internet commerce, refers to buying

and selling goods or services using the internet and transferring money and data to execute these
transactions. E-commerce is often used to refer to the sale of physical products online, but it can
also describe any kind of commercial transaction facilitated through the internet (Shopify, 2020).
The history of E-commerce began last August 11, 1994, when a man sold a CD of a famous band
to his man friend through his website NetMarket. Since the birth of this transaction, E-commerce
started to evolve, making the products easier to discover in various marketplaces and online
retailers. Different business sectors befitted from e-commerce. It gave them the ease to market
their goods and services at that scale, which is impossible with traditional offline retail.
However, the convenience that this platform brings, the state of the traditional market remains as
the question of fact. What would be its effect on the physical store/ traditional marketplaces?
Considering the occurrence of COVID-19, where people are confined to stay at home, what will
be its implication to the rise of E-commerce to the continuing operation of the traditional
marketplaces?

The Philippines has a consumer-driven economy where 72% of economic output is

attributed to private consumption. For decades, Filipino entrepreneurs have benefitted from brick
and mortar stores. But all that changed when the COVID-19 struck. Overnight, bustling
restaurants, crowded malls and busy stores were empty. Retailers today only realize 15% of their
pre-COVID sales, on average. This monumental change that the world has experienced due to
COVID-19 has affected our day-to-day lives and therefore overwhelmed the way consumers
behave. Health and safety measures are at play worldwide and it is crucial for organizations to
respond to these changes in consumer needs, preferences, and behaviors.

While critical in safeguarding public health against the spread of COVID-19, the
enhanced community quarantine and other quarantine/lockdown measures dramatically limited
business activities throughout much of the Philippines. After the 16 th of March, first lockdown of
the NCR, CALABARZON, and other regions, most Philippine enterprises faced the immediate
closure of business or limitation of business operations. According to the survey, 65.9% of
enterprises surveyed temporarily closed their business after the ECQ came into effect Limited
operations continued in 29.1% of the enterprises surveyed. Among those with limited operations,
one fifth reported more than 50% of their business continued, while 78.4% reported less than
50% of their business operational. Only 4% of those surveyed remained fully open. Meanwhile,
1.1% closed permanently (Asian Development Bank, 2020).

These challenges to the traditional market during COVID-19 which fueled the rise of E-
commerce, brought sentiments to business owners with the choices they should make in line with
the current demands of the pandemic. They are torn between engaging into a new platform of
selling goods or services (e-commerce), which may be new to them, and lies competition as
numerous businesses have also coped up with the trend or continue the traditional operation of
physical stores in the conduct of business.

Moreover, in this paper we strongly encourage business entities to engage into other
distribution channel like E-commerce in the sale of goods or services, to adapt with the current
consumer purchasing behavior because E-commerce is now in the mainstream. Its share of wallet
will only grow larger in the years to come, with or without a vaccine. This is why it is important
for every business to establish their own e-commerce platform. It is a race. Those who pivot
fastest and those who can ensure safety and reliability of transactions, wins (Masigan, 2020).