What is E-commerce in the time of COVID-19

 As detailed above, the COVID-19 crisis accelerated an expansion of e-commerce towards new firms, customers and types of products.

 For individuals, e-commerce enables physical distancing while retaining access to the full product variety. While e-commerce in the past for many consumer groups was centred on high tech goods, toys or books, it now increasingly involves goods for which availability is critical to a large share of the population, including groceries, medicine and other necessities. E-commerce has further enabled continued access, either online or physical, to certain areas of public life, such as concerts, museums or swimming pools, including by efficiently allocating time stamped tickets to avoid overcrowding. Similarly, for many firms e-commerce is now a vital alternative or complementary sales strategy, allowing continued operation in spite of contact restrictions and other confinement measures.

  It has therefore become increasingly important to close remaining digital divides. For consumers, these can be linked to factors like access, income, awareness or skills. For example, the elderly, a segment of the population that would particularly benefit from e-commerce-enabled physical distancing, have persistently been lagging behind in terms of e-commerce participation in many countries (OECD, 2019[4]). Significant and persistent gaps also remain for low-income households or individuals with low education, which is concerning given the decreasing costs of connectivity, the ubiquity of digital technologies and the increasing scope of products available online. Besides closing these divides, governments also need to ensure that consumers, and in particular the most vulnerable, are sufficiently protected from unfair, misleading and fraudulent commercial online practices, which have been increasing in the current crisis (OECD, 2020[5]).

 Persistent gaps in terms of e-commerce participation also remain for firms, and in particular small and medium enterprises (SMEs). In 2017, the participation rate for SMEs in e-commerce was less than half the rate for large firms in a majority of OECD countries (OECD, 2019[4]). This explains and adds to a low level of resilience and flexibility among SMEs in dealing with the costs of reduced demand and local containment measures (OECD, 2020[6]) Low levels of digitalisation and difficulties in accessing and adopting new technologies make it particularly difficult for those firms to change existing work processes, by introducing teleworking or an e-commerce sales channel.

 The COVID-19 crisis has exacerbated many of these divides. Additionally, regulatory uncertainties about which rules to follow (e.g. offline or online) suddenly can affect a larger number of firms trying to flexibly combine and shift between offline, online and omni-channel sales channels. While many of these challenges have existed before the COVID-19 crisis (OECD, 2019[4]), the current situation has heightened the need for policy action. Some countries have already taken initiatives, in particular to support the digitalisation of business models, during the COVID-19 crisis, but challenges remain pressing in many countries. 

  

  • Despite persistent cross-country differences, the COVID-19 crisis has enhanced dynamism in the e-commerce landscape across countries and has expanded the scope of e-commerce, including through new firms, consumer segments (e.g. elderly) and products (e.g. groceries). Meanwhile, e-commerce transactions in many countries have partly shifted from luxury goods and services towards everyday necessities, relevant to a large number of individuals.

Enjoyed this article? Stay informed by joining our newsletter!

Comments

You must be logged in to post a comment.

About Author
Recent Articles
Jul 13, 2024, 1:56 AM Skincare dubai
Jul 13, 2024, 12:13 AM Santha Cruz Jaganathan
Jul 12, 2024, 11:16 PM Anisur Rahman
Jul 12, 2024, 11:08 PM Santha Cruz Jaganathan