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Effects on Online Businesses due to outbreak of COVID-19 Pandemic

Last Updated on February 18, 2022 By Haseeb Quasim Qureshi 3 Comments

The recent outbreak of COVID-19 has undoubtedly changed the course of one’s perspective of business activities. The global economy in 2020 was projected to grow by 2.5 %, but with the outbreak of COVID-19, United Nations have now stated that the global economy could shrink by almost 1% within this year.

More than 100 countries in the world have closed their borders resulting in a sharp decline for various businesses. Mr. Guterres (UN Chief) recently said that;

“CoVid-19 is the greatest test we have faced together since the formation of the United Nations.” Effects on Online businesses due to COVID-19 Pandemic are certainly the most decisive part of the decade.

Table of Contents

  • Online Businesses Performance under Pandemic COVID-19
    • Upcoming Challenges for Online Businesses
    • Pandemic Drawbacks for Online stores
    • Conclusion

Online Businesses Performance under Pandemic COVID-19

Business Analysts have various opinions on how online business is performing during this pandemic. However, it wouldn’t be fair to imply that online businesses are at all ease during this pandemic.

Let’s divide the overall market sector into two main groups; one being Essential including all the Hygiene, clinical, and household products while the other being Non-essential.

According to Adobe Analytics, Essential product demand has surged by 817% among the United States’ top 80 retailers during the period of January 2020 to February 2020. The sales of products for counter drug, cold, flu, and pain reliever medicines and toilet papers have surged from 69% to 198%.

E-Shopping at Amazon had seen a great increase in sales at the start of March. According to Digital Commerce 360, sales in nonessential categories surged about 25% during the month of March. In the category of health, beauty, and household products sales growth ranged from 30% to 100%.

Upcoming Challenges for Online Businesses

The patterns had been satisfying for Ecommerce essentials and non-essentials items until now, but things may not remain the same. Before the month of March, almost all of the industries were more or less operating at their maximum capacity.

Now with the Pandemic outbreak in more than 200 countries, lock-downs have been introduced for at least 2 weeks to limit the spread of the virus. This resulted in the closure of major industries other than medical and some essential’s items industries.

At the same time Countries are closing their borders to limit the pandemic.

With this scenario building up, online retailers are facing the issue of delays in shipments.

On 30th March 2020, Amazon announced that shipment of Non-Essential items from their inventory has been suspended till late April, adding that they will only accept the products belonging to Essential Category or Medical supplies.

Andrew Jacob, CEO of an online office supplies retailer at JAM Paper & Envelope said; “We have never made such drastic decisions in such a short time.” His company falls under Amazon’s category of Non-Essential products

Pandemic Drawbacks for Online stores

As this pandemic continues, effects on online businesses are becoming even more critical, many people are afraid of unemployment, and unstable financial markets, signaling the recession that the world has never experienced.

This will primarily impact non-essential products, online shareholders. Stuart Rose’s (Mirus Capital advisor) said that due to layoffs and drastic fall in the stock market, sales of items will be adversely affected, especially of Non-Essential items. “if you lose 30% of your 401k, you might not want to buy that extra sweater or other non-essentials.”

The top 50 searches of Amazon, include virus protection products or household products. Survey findings indicate that nearly half of the retailers expect some downturn in revenue. Furthermore, 44% of retailers are expecting production delays and inventory shortages.

Conclusion

With the lock-downs and self-quarantine in effect, almost every individual is turning to online shopping stores. This is causing retailers to experience a sudden increase in demand while having reduced supply from manufacturers.

Dealing with not only demand but gaining customer trust has now become crucial for online retailers. Online retailers are also making sure that their customers receive their orders that both are safe and meet their expectations.

Since almost every segment of people are switching to online shopping so there is a dire need of alternate payment methods.

Right now the online market is experiencing increased attention from consumers. Due to every varying day, there is a need to analyze effects on online businesses on a regular basis. One thing is for sure, COVID-19 will definitely shake trends and development of online stores.

Haseeb Quasim Qureshi

Author is an Engineering Student and pursuing a career in fieldwork with great interest in writing. It has been 2 years of writing and brings the best to readers.

Filed Under: Journals

Reader Interactions

Comments

  1. Abdul Azeem Samee says

    April 3, 2020 at 4:50 pm

    Good analysis.

    Reply
    • Burhan ur Rehman says

      April 4, 2020 at 1:00 am

      Great effort Haseeb. Crisp & methodical layout. If you can add Covid 19 impact on Pakistani Online Plateforms, it would have further gone one nouch up. Nevertheless. We are proud of you.
      Keep it up.

      Reply
  2. Ammar Wasti says

    April 3, 2020 at 4:57 pm

    It’s great to see young talent of Pakistan rising up to the spotlight in these times of recession aspiring other youngsters to do something thought provoking and out of the box. Keep it up dear.

    Reply

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