The Covid-19 pandemic fundamentally changed everything in our society; how we relate to others, the time we spend together, our way of working and earning, saluting each other, and trade. This last is one of the trending topics news worldwide from 2019 to 2021. The way the economy changed is one of the most critical repercussions of the 2019 pandemic. How e-commerce answered the pandemic challenge is most epic.
Most of the biggest world economies are struggling with rising unemployment, as we can see in the following chart.
The Tourism Industry is one of the most damaged by the lockdown, and with the new variants of the virus, the recovery is far from view on the horizon.
But while some sectors of the economy fall, others are rising thanks to lockdown policies and travel and office work impossibility. The SaaS industry has been experiencing exponential and unprecedented growth since 2019, which is hard to imagine without the pandemic.
E-Commerces: The pandemic’s lead role.
Particularly the e-commerce sector has skyrocketing growth. Economies worldwide rely more on digital commerce as it is an excellent alternative to physical transactions.
In the following tables, we can see an example of that growth in the online retail industry.
Table 1: Online retail sales, selected economies, 2018 – 2020 (Billion dollars)
The previous tables show us that digital economies are growing in countries with high digital insertion, like the United States, and countries with low digital insertion, like Singapore.
Korea is the country with the most significant growth in the e-commerce sector, and it’s no wonder they are a hiper-technologized society, just like Japan.
Table 2: Retail sales, selected economies, 2018 – 2020 (Billion dollars)
In most selected countries, the retail sector has negative growth, giving up shares to online retail. Companies like Shopify and WallMart are steadily draining sales from the retail industry.
Table 3: Online share (% of retail sales), selected economies, 2018 – 2020 (Billion dollars)
The shares of the online retail sector were having a steady growth even before the pandemic, but after, the development became exponential.
We can add teleconferencing, online education, and teleworking apps to the retail sector. If you invested in that sector, most likely, you’re rich by now.
With all the time we had in our hands, we also started consuming more video games and on-demand content. Because of this, companies like Play Station, Xbox, Netflix, and Amazon Prime have had outstanding years lately. This newly acquired free time has made us a lot more selective when consuming entertaining content, reflected in the growing Youtube and Spotify hours we’re spending since 2019.
According to the UNCTAD report published on May 3, 2020, business-to-business sales are leading growth in the e-commerce sector with an incredible 82% of the whole industry shares.
But not everything is laughter and roses in the SaaS industry. Airbnb, Booking Holdings, Uber, and Expedia suffer significant losses because of the lockdown imposed by virtually every government in the world. These companies are in a declared recession.
The Digital Grand Canyon and the E-commerce Role.
Long after the Covid-19, the UN established the Digital Divide, a barrier between the countries with good digital integration and poor digital and internet integration, creating a very “tangible” difference and adding even more to the gap between the developed and underdeveloped countries.
Although the e-commerce sector is rapidly growing it fails in digital inclusion, as the index released by the World Benchmarking Alliance states, rating poorly the whole sector. The UNCTAD reports that one of the principal factors of the poor performance is that these companies are relatively young, most with only two decades old.UNCTAD
The UN said about e-commerce…
The UN says that the 2019 pandemic is widening that gap in all three principal axes; gender divide, social divide, and universal access divide. An example of this is the UN estimation that 1.3 billion school-aged children can’t log on to the internet at home.
“The digital divide, which was real long before COVID-19, is a challenge which can be removed through our collective efforts and international support,” Says the President of the General Assembly, Volkan Bozkir. “E-commerce offers immense potential across the SDGs. Efforts, therefore, must be made to harness this rapidly emerging tool.”President of the General Assembly, Volkan Bozkir.
The UN estimates that e-commerce businesses can aid to solve the digital divide, not only with private efforts but also with the help of the international community and the governments that integrate it.
Such a declaration speaks of the power the internet, SaaS, and online business attained during the 2019 Covid pandemic. Of course, the SaaS industry, mainly e-commerce, must change its focus from the shareholders to the stakeholders, the integrations, and the socially friendly performance.
E-Commerce as an integration factor
A lot has changed since the 2019 Covid pandemic; fortunes and industries have risen, and others have fallen. The e-commerce industry was a beneficiary of the health and political situation of the world for obvious reasons, and it’s not a problem; it’s only natural.
The damage caused by the pandemic is unprecedented, and still, we can’t quantify how many lives and how much money was lost. If the e-commerce industry can do something about it, it should and must do so.
For now, in Scalater, we commit to helping the community and educating our clients and our general public, putting all our knowledge and resources to their disposal, and always trying to do the good green thing.
Cheers to all, and long life to e-commerce!