E-commerce has significantly changed the way business is done globally. E-commerce is usually referred to as the online sale of physical products, but it includes any commercial transaction facilitated via the internet.
It has evolved to make products more discoverable and more comfortable to buy through online retailers and marketplaces. From independent freelancers and small companies to large corporations, all have benefited from e-commerce. It enables them to offer their products and services on a scale that was not earlier possible with traditional offline retail.
E-Commerce is reshaping the digital economy by offering consumers improved shopping experiences, such as availability of choices, discounted price rates, better product quality, vast product portfolio, simple return policies, and door-step delivery services. Increased mobile and internet penetration, technological advancements, such as big data and cloud-based e-commerce platforms, rise in disposable incomes, and the emergence of different forms of payment methods, such as electronic wallets, online payment applications, and other contactless technologies, and social media are some of the main factors that are driving the market growth.
The penetration of social media is increasing exponentially. These platforms are rapidly being adopted by e-commerce, as they are viewed as ideal platforms for acquiring new customers and clients. The posts on social media sites such as Facebook and Twitter are effective ways of engaging the target audience and driving traffic to the company's website to increase awareness of the company's services and goods sold to a broad customer base, thereby increasing credibility.
The e-commerce market, now, has a fairly mature market with established players, such as ALIBABA GROUP HOLDING LIMITED, Amazon.com, Inc., ASOS, eBay Inc., Flipkart Internet Private Limited, JD.com, Inc., MakeMyTrip Pvt. Ltd., OLX, and Craigslist, Inc., and a clear set of rules, which has transformed from a simple counterpart of brick and mortar retail into a developed ecosystem that involves multiple devices and store concepts. However, the digital revolution is not yet over. It is unlikely to ever come to a halt, propelled by the influx of innovation from multiple start-ups and increasing cash flow from fast-developing Asian economies.
The three significant markets of e-commerce include the United States, China, and Europe. Although there has been a slight decline in the Chinese economy, factors such as the increasing number of consumers gaining access to e-commerce due to growing purchasing power and internet penetration, especially on mobile devices, are propelling the shift in purchasing power from the United States and Europe to China and Southeast Asia.
Impact of COVID-19:
Due to the sudden outbreak of the coronavirus (COVID19) pandemic, e-commerce platforms experienced a steep demand for essential products such as groceries, personal care products, and bathroom essentials. Moreover, it is expected that social distancing and the global lockdowns forcing people to stay home would drive the consumers towards online shopping.
The rising severity of COVID-19 across the globe has forced the governments across various countries to go under complete lockdown, thereby resulting in uncertain consumer demand and disrupted supply chain. COVID-19 primarily stresses e-commerce supply chains due to factory closures in China, the United States, and other countries. The industry segment that is most affected due to the recent coronavirus pandemic is the electronics goods as China initially accounted for the most COVID-19 cases. According to the International Trade Union Federation (ITUF), the country is the largest manufacturer of electronics and its parts worldwide.
The novel COVID-19 pandemic has also affected e-commerce in different regions, including North America, Europe, the Asia Pacific, and the rest of the world. China's largest e-commerce service provider Alibaba has struggled to maintain growth levels in its domestic market amid an economic downturn due to the uncertainty of the pandemic situation. However, while the leading players initially faced problems with respect to supply chains and last-mile delivery due to the changing lockdown rules, the market has been witnessing a growth once again with the loosening of certain travel restrictions and with the platforms adjusting their business models to suit recent the hygiene and safety demands from the consumers and the workers.