What are the effects on ecommerce after covid19

 There has been a shift in demand from brick-and-mortar retail to e-commerce

 The COVID-19 crisis has led people in many OECD countries to significantly limit physical interactions. Self-imposed social distancing to avoid contagion, together with the strict confinement measures implemented in many OECD countries, have put a large share of traditional brick-and-mortar retail virtually on hold, at least temporarily (OECD, 2020[1]). In the United States, retail and food services sales between February and April 2020 were down 7.7% compared to the same period in 2019. However, sales increased for grocery stores and non-store retailers (mostly e-commerce providers),1 by 16% and 14.8% respectively. In the EU-27,2 retail sales via mail order houses or the Internet in April 2020 increased by 30% compared to April 2019, while total retail sales diminished by 17.9% (Figure 1). The resulting shifts from brick-and-mortar retail to e-commerce are likely significant across countries. For example, while in the United States the share of e-commerce in total retail had only slowly increased between the first quarter of 2018 and the first quarter of 2020 (from 9.6% to 11.8%), it spiked to 16.1% between the first and second quarter of 2020. The development is similar for the United Kingdom, where the share of e-commerce in retail rose from 17.3% to 20.3% between the first quarter of 2018 and the first quarter of 2020, to then rise significantly to 31.3% between the first and second quarter of 2020. Similar changes are also observed for other regions, including the People’s Republic of China (hereafter China), where the share of online retail in total accumulated retail sales between January and August 2020 reached 24.6%, up from 19.4% in August 2019 and 17.3% in August 2018. 

Certain shifts brought by COVID-19 likely involve long-term changes in e-commerce

While some demand shifts may be temporary, others are likely to have long-lasting effects. Anecdotal evidence from the outbreak of SARS in 2002 and 2003 suggests that the epidemic has been a core catalyst for the digital transformation of Chinese retail. For example, the move of JD.com, now one of the largest online retailers in the world, from brick-and-mortar to online sales in 2004 was a direct response to the SARS crisis. The same crises also provided the consumer base for Alibaba’s business-to-consumer (B2C) branch Taobab, which was launched in 2003.

In the current crisis, for example, elderly consumers who started to engage with e-commerce as a means to enhance physical distancing might in part stick to their newly acquired routines. The credit card usage of around 10 million credit card holders in Japan suggests that the increase in the share of online purchases in credit card transactions was highest for users in their 60s (from 15.4% in January to 21.9% in March 2020) and those in their 70s (from 10.9% to 16.4%). A global consumer survey measuring the adoption of digital and low-touch activities during the COVID-19 crisis by McKinsey further suggests that new users (i.e. users that had never engaged in these activities before) drove over 50% of the increase in online grocery shopping (Brazil and South Africa), kerbside pickup from restaurants (France, Germany, Italy, South Africa, United Kingdom and United States) or other stores (Italy, South Africa, United Kingdom, United States). In the United States, 21% of adults report having ordered groceries online or through an app from a local store as a direct response to COVID-19. The percentage remains almost as high (19%) among only the elderly (age 65+). In Brazil, around 54% of Internet users had bought food or food products over the Internet in 2020, substantially up from only 22% in 2018. Significant increases were also observed for cosmetics, toiletries and medicines. As convenience has always been one of the key drivers of e-commerce participation, it is likely that many of the new users will keep ordering at least some goods online in the future (OECD, 2019[4]). Others might continue ordering online out of fear of a pandemic blowback or because merchants manage to retain them through loyalty programmes or subscription models introduced.