A new report, “COVID-19 Impact on Global B2C E-Commerce and Online Payments 2020,” from Hamburg-based secondary research company yStats.com highlights the multiple effects that the spread of the coronavirus has on world electronic commerce. yStats.com CEO and founder Yücel Yelken commented that “The effect of the pandemic has been uneven across the different B2C E-Commerce categories and online verticals.”
Stay at home mandates due to COVID-19 propel an increase in online shopping
As consumers in various locations around the world are encouraged or ordered to stay at home to slow the spread of the coronavirus, they are turning to online shopping to fulfill basic needs. Consumers’ shopping and payment behaviors are changing amidst the rapid spread of the virus and the lockdown orders adopted in a growing number of countries as a measure to slow the spread of COVID-19. The yStats.com report includes the observations of E-Commerce merchants on the impact of the coronavirus pandemic on their revenues and operations and their expectations of near-future consequences. The online sales of groceries, daily necessities, health products and some electronics have surged as consumers in many countries around the world choose or are required to stay at home amidst the COVID-19 outbreak. Current data included in the yStats report from China suggest that the shift to online shopping may be a permanent change of practice.
E-Commerce share of retail sales on the rise amidst the coronavirus
While the volume of fast-moving consumer goods (FMGG) has spiked globally, not all product categories are benefiting from the coronavirus concerns. The yStats.com publication cites expectations of retailers of an overall decrease in online revenues as consumers forego the purchase of higher priced luxury items as well as apparel and accessories due to uncertainty about the global economy. Online purchases of travel arrangements and airfare have plummeted leading to lost revenue for hotels, airlines and online travel agencies. Even in areas of Asia just beginning to return to a semblance of normalcy after the worst of the COVID-19 has apparently passed, recovery of online sales as well as total retail is suppressed, with the E-Commerce share of total sales increasing.
COVID-19 drives an increase in the number online payments
While it is still early to report any long-term change in the payment preferences, one of the consequences of COVID-19 might be the reduction of the use of cash, both in-store and for payment on delivery of goods ordered online. The number of digital and contactless payments has increased as consumers avoid touching currency that could potentially carry the virus. Nevertheless, the yStats.com report points out that the surge in online transactions involving FMCG is likely to be offset by the loss of higher-ticket travel transactions, resulting in a potential fall in overall payment transaction volume. Several payments industry leaders have revised downward their revenue expectations for the first quarter of the year.