It has been more than 2 months since the nationwide lockdown was imposed in India and still, there seems no respite from the deadly Coronavirus that has engulfed all of us, around the whole world.
In an uncertain situation, as it is at present, a crucial point of contemplation is the very future of online businesses or in other words the future of E-Commerce. Online businesses are a broad term and encompass a wide range of services and products that are delivered to the users or consumers, including daily use items, electronics, food services, etc. Thus, let’s try to understand the dynamics of E-Commerce before forming an opinion, about their future.
Consumers, Demand, and Supply
As soon as the pandemic like situation began to come Infront of us, there were people mostly in the Western nations who started doing panic shopping from retail stores and began hoarding food items and other essentials. In a scenario like today where social distancing is the norm to be followed, the consumer demand has in a way declined comparatively.
People are now mostly concerned to buy essential items and the liquidity( cash or easy convertibility to cash) in the world economy has declined. This may hint at the online businesses getting a good opportunity to expand as people will be scared to buy goods from retail stores and would prefer online shopping.
Dr. Abhijit Banerjee, the Nobel Laureate in an interview also said that as soon as people will start spending their money and the idle lying cash will be ejaculated in the market, online businesses will get a boost up. According to consulting and research firm Technomic, 52% of consumers are avoiding crowds and 32% are leaving their homes less due to Coronavirus. This points to a win-win situation for online firms. But, given that online businesses are finding it difficult to meet the demand and the supply chains are blocked, the early realization of such profits out of increased online shopping, may not happen soon. Let’s wait till then!
Entertainment and Automotives
Who all aren’t binge-watching Netflix and “PatalLok? Well, the answer is no one. This is a testimony to the fact that online entertainment stores like Amazon Prime and Netflix which were already famous pre-lockdown, will become giant hubs post- lockdown too. There is no denying to the fact that lockdown has made all of us attracted and addicted to watching our favorite shows on these Over the Top ( OTT) media services.
According to a recent survey, Netflix added 15.8 million paid subscribers in the first 3 months of 2020 and the bar is rising day by day.
In the Entertainment industry, Casinos suffered huge losses due to less number or almost none visiting these places, for the fear of the contagious spread of the virus. Caesars- a casino is facing a daily loss of $9.3 million. Thus, in the near future, it can be undoubtedly said that Casino business is going to get a slump. But the online gaming and gambling firms have managed to thrive amidst this pandemic, again showing us a positive signal that E-Commerce is a preferred choice of consumers.
Besides this, the automotive industry saw a 42% increase in online revenue since March in terms of consumers ordering cars and automobiles via E-services, as compared to 9% this time, last year.
A quintessential component of everyone’s life and especially amidst a pandemic is health and health products and services. No matter what happens, online businesses concerned with providing medicines, equipment, etc will never go out of fashion. Even during the lockdown period, health products were one of the few others that were allowed to be delivered at people’s doorsteps via online shopping apps like Amazon, Flipkart, etc.
Telehealth- state-of-the-art online healthcare facility got a boost up in which the diagnosis and treatment of the patient takes place without the patient being physically present.
Such an advanced technology and online health business will surely manage to gain ground in the future, given that the present pandemic is just one of the many crises we are going to face in the future. In India, apps like Medilife are in a positive position, as far as their business is concerned.
E-Commerce Giants and Digital Payments
As soon as the Lockdown 3.0 was lifted in our country, people thronged Amazon and Flipkart to order “non-essential” items. And today there is no looking back. This shows the popularity of online shopping and the safest method to avoid contact by going for digital payments. JD.com- China’s largest online retailer has seen sales of common household quadruple. Likewise, online food delivery apps like Swiggyand Zomatohave started contactless deliveries. It isn’t wrong to say that from now onwards, people wouldn’t prefer going to restaurants more.
In a similar way, online digital payment providers like Paytm, Mipay will also work on their technology and will improvise to meet the growing demand for digital payments, which have seen a spike. WHO has already recommended more contactless payments and deliveries.
Earlier, it was a matter of choice for people to use online shopping apps but now it has become a matter of compulsion. It was predicted that growth in the E-commerce market in India would reach 200 billion dollars by 2026. However, post-pandemic, it may soon touch that target, with more number of people doing online shopping.
Luxury Goods and Technological Innovation
A recent news item that surfaced on social media, reported that Amazon is launching a digital storefront for luxury goods in collaboration with Vogue and the Council of Fashion Designers of America. In fact, most businesses are now trying to go online to survive in the future. If we are to talk about online luxury goods, then excluding poorer sections of society, the rich are going to buy them, for sure.
Besides, the impact of a pandemic on online firms can help in greater investment in technology, innovation, and infrastructure. By experiencing the Coronavirus Crisis, online businesses will try to improvise their system and apparatus and will find more accurate ways to deal with such a situation in the future. A recent picture of a Chinese Restaurant serving food through Robots is one of the kind Innovations.
In India, the Reliance announced a plan to link the traditional Kirana ( spices, etc selling shops) Shops digitally to customers. This all is evident in the innovations that businesses are developing- a useful impact of the pandemic.
Online video conferencing apps like Zoom and Skype have also made improvisations, given that work from home is going to be the new normal in the future.
Conclusion and Challenges ahead
Having traced the various businesses and the respective impact Coronavirus has had on each one of them, we definitely see that there is an uncertainty of online businesses in the near future- whether they will survive, profit, grow or fall.
Although Grofersand Bigbaskethave admitted that they only have 50-60% of the staff available, which makes online delivery difficult to all homes and a quick pace, yet we can’t ignore the growing reliability of online retailers.
The impact is not just positive but negative too. Some businesses which can’t be operated online like Travel and Hospitality have suffered losses worth trillions. Apart from that, online businesses are suffering from a serious challenge of meeting both supply and demand and ensuring timely deliveries.
A thing we often forget is that, even online businesses need employees and workers to make products which are then offered on Computers or phones. This may lead to a serious problem of employee cut down owing to social distancing norms and may cause unemployment too.
Thus, it would be wrong to say anything by only seeing short term impacts.
The long-run will tell us, how will pandemic affects online business.