According to digital transformation leader Capgemini, online shopping is going to increase from 46 percent to 64 percent over the next six to nine months among Indian consumers.
“In the next 6-9 months Indian consumers would decrease their shopping at physical retail stores and over 46% of Indians will shop at physical retail stores compared to 59% of Indian consumers who shopped at physical retail stores before the pandemic,” the Capgemini report added.
Post COVID-19, a transformation in consumer behavior is apparent, and it is changing the entire course of numerous businesses. It pushed the trend of bulk-buying and online shopping to a whole new level. There were instances of mass hoarding of products and an overnight change of shopping behaviors. While remote working garnered importance, the profitability of a majority of businesses such as airlines got adversely impacted.
The COVID-19 pandemic has been one of the most defining events of 2020 and will most likely have implications that last well into the decade. It has enough potential to change how consumers shop, consume information, and even their regards towards how businesses work.
One of the most important questions right now is how COVID-19 is impacting the eCommerce business? And what will happen once all of this gets over? Let’s find out in this article.
Understanding the COVID-19 effect on online shopping
Ecommerce was prevalent even before the coronavirus outbreak. However, the pandemic did make eCommerce service crucial and indispensable to a large extent. As the news of the COVID-19 spread, people began stocking up. They bought out medical supplies like hand sanitizers, masks, and household essentials like toilet paper and bread. Both brick-and-mortar retailers and online stores were struggling to keep up with the demand.
In India, the government approved the movement of essential items. The demand for medicine delivery went up by 1.5 to 2 times. Even online grocery shopping increased manifolds. However, non-essential eCommerce came to a complete standstill, and even a smartphone giant like Apple showed concerns about not being able to meet its Q1 objectives.
As per Carrefour, a French retailer, the delivery of vegetables had increased by 600 percent. Not just that, but a Chinese retailer reported a 251 percent increase in the online grocery sale during the initial 10-days between late January and early February.
Speaking of the current scenario in India, Bigbasket co-founder, K Ganesh said, “Opportunistic entrepreneurs who have flexible operating models that can support the grocery supply chain should find ways to enter the space. In this environment, convenience and access have taken precedence overpricing and discounting. In the long-term, a fundamental shift in consumer behavior is expected, with home delivery for all products and services across sectors being the norm. However, grocery is tough, and figuring out a profitable business model will be the key.”
Due to all the lockdowns, brick-and-mortar retailers are now facing a harsh reality as the government has enforced restricted outdoor trips. Ecommerce, on the other hand, has been witnessing a significant hike in sales and foreseen to alter substantially over the coming years as well.
As eCommerce sales continue to grow, a question arises of whether eCommerce will overtake or completely replace physical store sales eventually. ECommerce’s share of total retail sales is going to rise from 8.9 percent in 2017 to over 15 percent in 2022, totaling nearly $892 billion (eMarketer).
The rise of online grocery stores
Populations across the globe are currently in quarantine or isolation. These housebound consumers are turning towards online grocery shopping as a result.
BigBasket claims that there has been a 2x growth in traffic and revenue in recent times.
Their spokesperson shared, “Increased demand is in essentials such as staples, atta and dal, fruits and vegetables, we are in control because the predominant share is from our private label products. We are not facing shortages in FMCG branded products except in the case of sanitizers. In effect, supply will not be an issue.”
E-commerce grocery retail in India, according to a RedSeer Report, is currently 0.2 percent of the overall $550 billion Indian food and grocery retail market in India and is expected to grow at a whopping 55 percent to reach 1.2 percent of the overall market by 2023.
Retail experts also believe that the current spurt in the growth of online grocery platforms will help in its long-term growth too.
“E-commerce grocery would surely jump at least for the next few weeks and would stay at a higher share soon as people understand the ease.”
– Govind Shrikhande, Senior Retail Industry Expert
Paytm’s chief Vijay Shekhar Sharma called this the eCommerce 2.0 moment for India. He said, “If they feel safe paying online, they will use digital transactions. Similarly, if they feel shopping online is safe, they’ll buy only from eCommerce stores.”
A surge in virus-protection products
Medical and government authorities have been urging people to maintain adequate hygiene during COVID-19, and that is one of the main reasons why people are running behind protective products, including gloves, sanitizers, masks, and much more.
It has increased online shopping usage globally and resulted in a rise of FTUs or First Time ECommerce Users in India. Moreover, even millennials are choosing to order these products online. As per the recent analysis by Adobe, the eCommerce purchase of virus protection products has increased by 817%.
Here are a few recent statistics by global marketing research firm Nielsen:
- In Malaysia, sales of hand sanitizers hit almost RM1 million (US$237,176) in the week ended Jan. 26, 2020; that’s more than 800% above the weekly average.
- In the U.S., Department of Health and Human Services (HHS) Secretary Alex Azar told lawmakers that America needed up to 300 million protective face masks (270 million more than the supply).
- Nielsen measures of San Francisco drug stores indicate that year-to-date sales of medical face masks as of the week ended Feb. 22, 2020, had already exceeded that of the entire 2019 year.
Push towards convenience and health
Health and safety products were purchased far faster than they could be produced and restocked soon after the announcement of the coronavirus outbreak. According to global marketing research firm Nielsen, items like hygienic and medical mask sales were up by more than 300 percent.
Adobe found out that medicines sales for cough, flu, and cold went up by 198 percent, and the purchase of pain relievers increased up to 152 percent.
Several experts believe that home delivery of products and services will be the main focus in eCommerce, with access and convenience gaining more importance than discounting. The demand for health and wellness products is going to increase according to recent reports.
“In the post-covid-19 world, I feel the importance of preventive healthcare, particularly with Ayurveda, and personal hygiene will grow in the consumer mind-space. Consumers will seek more preventive healthcare products for boosting immunity. Even personal hygiene products would become an essential part of the monthly grocery basket.”
- Mohit Malhotra, CEO, Dabur India
People are going to turn to more immunity-boosting, nutrition, and personal hygiene products in the post-COVID-19 era. According to the financial newspaper Mint, the sale of wellness foods is also going to increase going forward. Companies that sell such products add that customers who rushed to buy hand sanitizers and disinfectants will boost the growth of health and wellness products in India.
Source: Nielsen Retail Measurement Services, Total U.S. All Outlets Combined, periods ended Feb. 22, 2020, versus same periods a year ago
Is it safe to order online during COVID-19?
The World Health Organization addresses the concern related to the safety of online shopping by stating on their website: “The likelihood of an infected person contaminating commercial goods is low and the risk of catching the virus that causes COVID-19 from a package that has been moved, traveled, and exposed to different conditions and temperature is also low.”
Moreover, experts believe that it is not likely that COVID-19 will survive on items from the time of packing to the time of delivery. Shipping conditions make an unsuitable environment for COVID-19. It’s improbable you’ll be exposed via an online package itself.
According to the Centers for Disease Control and Prevention, “There is likely very low risk of spread from products or packaging that are shipped for days or weeks at ambient temperatures.” The statement refers to packages that have been in shipment for numerous days and have not come into contact with any contaminated sources after packaging.
Here are the top ten tips to shop safely by the Global Innovation Policy Center (GIPC):