E-commerce in the pandemic and beyond
E-COMMERCE IN THE PANDEMIC AND BEYOND
Khalil Hassan
Student, islamic azad university south Tehran Branch,
Iraq, Baghdad
Nawfal Jabur
Student, Islamic Azad University South Tehran Branch,
Iraq, Njaf
Mohammad Nia
Dr., PhD in Information Technology, Faculty member of South Tehran University, Iran, Tehran
ЭЛЕКТРОННАЯ ТОРГОВЛЯ В УСЛОВИЯХ ПАНДЕМИИ И ЗА ЕЕ ПРЕДЕЛАМИ
ABSTRACT
The article discusses the transformation of e-commerce markets in the context of a pandemic. Information is provided on the activities of global and domestic online trading platforms in the context of the COVID-19 pandemic. Promising directions and trends in the development of global and Russian e-commerce markets are considered. A forecast is given for the future operation of e-commerce markets after the pandemic.
АННОТАЦИЯ
В статье рассматривается трансформация рынков электронной коммерции в условиях пандемии. Представлена информация о деятельности мировых и отечественных площадках онлайн-торговли в условиях пандемии COVID-19. Рассматриваются перспективные направления и тенденции развития мировых и российских рынков электронной коммерции. Дается прогноз на перспективу работы рынков электронной коммерции после пандемии.
Keywords: digitalization, COVID-19, pandemic, online payments, digital commerce.
Ключевые слова: цифровизация, COVID-19, пандемия, онлайн-платежи, цифровая торговля.
So, the Covid-19 pandemic has accelerated the introduction of e-commerce. Let's try to assess the scale of conjunctural changes and structural changes, how they can persist and what it will lead to further after the pandemic subsides.
When the Covid-19 pandemic began, the transition from simple purchases to digital purchases took place within a few days. Since 2017, e-commerce revenues have grown from about $1.4 trillion to $2.4 trillion, or 2.7% of global production (Figure 1a). According to recent estimates, today 3.5 billion people all over the world (almost half of the globe – 47%) use e-commerce platforms. China is considered the largest market in this field, the USA, Japan, England and Germany. The pandemic has accelerated the shift in this area. Restrictions on movement imposed to combat the spread of the virus have led to a sharp increase in online demand for goods and services. As people stayed at home, the share of online retail sales in China, Germany, the UK and the USA grew by 4-7% in 2020 (Figure 1b). In China and the USA, the share of online sales has decreased, but at the same time they occupy 1st and 2nd place in the ranking. In South America, the record of online purchases was broken in 2 months, people bought goods for an amount equal to the annual revenue of the Mercado Libre platform. The days between online purchases have decreased (Fig. 1b). [3]
Different sources of information give an idea of e-commerce. In some countries, there are official statistics of online retail sales (for example, the US Census Bureau and the National Bureau of Statistics of China). The bulk of statistical data are taken from the marketing research sites of RBC, Statista, IBM surveys, GlobalWebIndex, Contentsquare, etc. [1]
CNP transactions are online payments and payments via smartphone apps. Its difference from "contactless" payments is that no physical plastic card is involved in the process and no PIN code is required.
From the above sources, having collected data that can shed light on the differences in the development of electronic commerce in different countries and sectors of economic activity (Fig. 1). [3]
Figure 1. E-commerce in a pandemic: a) online retail orders in selected countries; b) the share of e-commerce in total retail sales; c) free market in South America between pandemic outbreaks [3]
Statistics are collected in official organizations due to the online nature of e-commerce. In the US, CPI survey response rates were lower, and the number of unaccounted prices increased in the spring of 2020. The Bureau of Labor Statistics relied on information from the Internet to determine prices for certain categories of goods and services. Information about online purchases takes into account the variety of products and the change in the share of consumer spending, which allows you to accurately track actual demand and inflation.[2]
The pandemic has developed in three main stages: 1) the stage of taking precautions; 2) the stage of stockpiling; 3) the stage of self-isolation. Mercado Libre data spoke about the demand at each stage (Fig. 2a). [3] At the beginning, as the Covid-19 virus began to spread across Asia, Europe and the Americas, the bulk of consumers exclusively made purchases of a medical nature (disinfectants and face masks). At the second stage, after the announcement of the pandemic, consumers stocked up on basic necessities (personal hygiene products and canned food). All this was a response to the government's measures. At the third stage, technological goods, simulators, entertainment and educational services were in high demand. [2]
Figure 2. Prices on the Internet: a) Top 20 most popular products in South America at 3 stages; b) Web traffic by industry; c) Retail prices on the Internet during the pandemic [3]
Different sectors of the economy have been affected by the pandemic in different ways. Online retail orders have grown all over the world, and the range of products in demand largely corresponded to the stages of the pandemic. Information from Contentsquare indicates that traffic to supermarket web pages increased to 270% at the peak of self-isolation (Fig. 2b). Retailers of technology and sports equipment increased sales from online stores. But the tourism industry suffered the most, by 80%.[3]
Prices for many online products have risen during the pandemic. Excessive demand has led to the fact that some goods have disappeared from warehouses. In addition, the cancellation of passenger flights has reduced the capacity for cross-border mail. As a result, many faced delays or cancellations of their orders.
Supply logistics, shortages, and sharp spikes in demand helped prices rise online (Figure 2b).[2] Reversal of the deflationary price trend in sales of computers, household goods, and medical equipment sold online. Food prices have increased since April. The limitation of macroeconomic effects led to a change in prices for online goods - this is well documented by e-commerce retailers, who could quickly adjust prices according to online competition. [2]
Figure 3. Changes in card payments during the pandemic: a) Dynamics of the cost of payment cards by sectors of economic activity; b) Transactions without a card (CNP) in certain sectors [3]
E-commerce helps to apply remote payments. Worldwide, the total volume of card transactions declined during the pandemic as economic activity declined. Some sectors of the economy suffered more than others due to redistribution across the entire economy (Fig. 3a). However, CNP transactions have increased among card payments. Once again, there is a greater increase in the share of CNP transactions in certain sectors (Fig. 3b). There are signs that the shock to consumer behavior may become structural. The share of CNP operations has decreased compared to the peaks of the pandemic period, it remains higher than before the pandemic in a number of countries, especially in emerging market economies (EMES). While some industry shocks are temporary, others indicate a long-term redistribution of economic activity. [3]
An IBM survey in 2020 among 3,500 executives in 21 countries showed that most expect a shopping boom to begin after Covid-19 on the Internet. [3]
Thus, e-commerce continues to flourish. The trend of the spread of digital commerce in the absence of a pandemic took several years, and during several months. Despite the fact that in the ”post-pandemic period" there is likely to be some decline in the activity of trading operations, it can be argued that electronic commerce has become a reality of modern market relations. [1]
References:
- Adenin S.M., Shilkov V.I. Problems of electronic commerce in a pandemic // In Sat.: Spring days of science. collection of reports. Ministry of Science and Higher Education of the Russian Federation; Ural Federal University named after the First President of Russia B. N. Yeltsin; Institute of Economics and Management. - 2021. - pp. 605-610.
- E-COMMERCE, TRADE AND THE COVID-19 PANDEMIC. Original: English. / World Trade Organization. 4 May 2020– - [Electronic resource] - Access mode: https://www.wto.org/english/tratop_e/covid19_e/ecommerce_report_e.pdf (accessed 26.11.2021)
- Viviana Alfonso, Codruta Boar, Jon Frost, Leonardo Gambacorta and Jing Liu E-commerce in the pandemic and beyond // BIS Bulletin No. 36 12 January 2021 - [Electronic resource] – Access mode: https://www.bis.org/publ/bisbull36.pdf (accessed 26.11.2021)