The surge in e-commerce and on-demand models will lead to newer modes of transportation like the use the train network for faster deliveries

COVID-19 and its impact on e-commerce

By Pankaj Sachdeva, Vice President, Innovation and India Site Leader, Pitney Bowes

The global Coronavirus pandemic has led to a sudden dip in stock markets, oil prices, GDP forecasts and has altered social interaction and long-term customer behaviors. Industries such as travel, hospitality, and automotive have been visibly impacted, and the impact continues to spill across to other industries as well. At the same time, the outbreak has given a push to the digital economy. For example, Online Content Streaming Platforms, Digital Video Conferencing Platforms, and Social Media and Collaboration Platforms are at an all-time high.

E-commerce, the biggest enabler of digital economy is also looking different after the outbreak. As more people remain restricted to their homes, e-commerce companies are responding to new customer demands. Here is how the dynamics are changing for e-commerce companies in India:

  • New Consumer segments buying online – Lockdowns and social distancing across countries are pushing new customer segments, such as the 60+ age group, to buying online.
  • Change in buying behavior – Customers are buying products that were purchased less frequently online, such as essential items like groceries, medicines, hygiene products, other household products, and non-essential items such as home-gyms, work out equipment, gaming, and entertainment products. This change in behavior could be permanent.
  • New businesses coming online – Every business understands the need to be online. Mom-and-Pop stores will soon have an online presence. This is evident from the stock surge in an e-commerce platform, which grew by 50% just in April. Established stores will have a larger focus on their Offline2Online strategy.
  • Hyperlocal, on-demand fulfilment and delivery – Companies are meeting requirements for quicker delivery through hyper-local, on-demand, and last-mile fulfilment and delivery options.
  • Supply risk management – The COVID-19 outbreak has taught companies the importance of diversified sourcing. To reduce dependency and ensure smoother supply of goods, companies are turning towards domestic manufacturers, or are moving production to other cost-effective geographies, such as India, Vietnam. It will no longer be only about the strategy of the direct supplier, but also about their chain of suppliers.
  • Route optimization algorithms – Route optimization to enable shorter delivery time and reduced cost has never been of more importance. The rise in demand and the supply chain disruption has created logistical challenges that companies need to tackle at the earliest. A quality route optimizer will enable well-optimized routes even with multiple stops, loading/unloading, among other requirements.
  • Newer modes of transportation – The surge in e-commerce and on-demand models will lead to newer modes of transportation. For example, the largest global e-commerce platform is planning to use the train network in India for faster deliveries. Unmanned aerial vehicles may soon be available or faster deliveries and returns. With oil rates crashing, companies will look at increasing their air fleet capacity or maybe include choppers for local deliveries. And with the focus on faster delivery, teleportation may be much nearer than we expect.

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