How Covid-19 will change ecommerce

How Covid-19 will change ecommerce
Murali Nair, Zeta
4 Jun, 2020

The Covid-19 outbreak has become one of the worst pandemics in history. With the increase in cases across the world, each government is trying its best to control the spread of the disease. This pandemic has also caused an economic slowdown across the globe and India isn’t immune to it either. However, some sectors such as ecommerce have seen enormous growth during the lockdown. 

Three factors have contributed to the growth of select ecommerce companies.

  • Around the world, mobile and internet penetration is very high. Over 500 million people in India alone have smartphones and with the cost of data consumption at around $0.20 per GB, conditions are ideal for ecommerce companies to directly talk to consumers in the lockdown situation.
  • With consumers stuck at home, groceries/food for daily use, video conferencing tools and online entertainment/digital news channels became the ways for the well-heeled and internet-enabled to survive, get their work done,  be informed and be entertained. 
  • The nimble among the ecommerce companies and also many companies in the business of essential commodities who established online models have seen a spurt in business growth in the lockdown situation. Sahyadri Farms is an interesting example of a company that has suddenly become a household name as they supply fresh, high quality vegetables direct to the consumer.

Obviously the fact that all these companies were also providing these services at prices that were considered reasonable by consumers in general, helped. 

The only issues that some of these ecommerce companies have faced is the inability to service the surge in demand. BigBasket, for example, becomes available for a maximum of twenty minutes in a day -- it’s a game to guess the time when they would be open to take orders.

Even after the lockdown is lifted, till such time a permanent cure for Covid-19 is found, social distancing is expected to continue as a norm and more and more consumers will gravitate towards online shopping.  A set of select ecommerce merchants is going to rule the industry and flourish post lockdown. Required also will be logistics and delivery companies to ensure these companies are able to fulfil customer orders.

The fintech industry is also likely to ride this wave along with the ecommerce industry as more and more consumers take to their mobile devices to do everyday transactions. Banks will need to move swiftly to make sure that they adjust to the new reality. Digital avatars of banks will be set up as banks hurry to equip their customers with the ability to do remote commerce. Paying digitally will become the norm. 

Even as the world faces many challenges with several businesses such as travel, hospitality, entertainment (sports, multiplexes, malls, amusement parks, cruise liners) facing existential crises, many businesses that cater to the everyday needs of people will grow by adopting digital and remote delivery models. New winners will emerge from the ashes of Covid 19.

The world as we know it is going to change. Having the ability to spot the emerging trends and being resilient enough to pivot your business models to survive and thrive in the new context are key.

Stay safe and do your bit to contribute to those who are less fortunate.

Murali Nair

Murali Nair


Murali Nair is president-banking at Zeta. The views in this article are his own.

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