Three Realities Happening Now in Ecommerce World Due to Corona Virus

"The longer the corona virus continues to spread at its current pace, the more depressing the markets — and increasing the risk of wider financial meltdown."

As COVID-19 continues to spread across the globe, online retailers are wondering, “How will the corona virus affect my online business?” Already, Events, like Shoptalk, Adobe Summit & Magento Imagine and South by Southwest, were postponed indefinitely or canceled. Leaving a further drop in retailer confidence.

Retailers that manufacture or supply their goods from China are unsure of how this will impact their supply chain, or how this will impact demand for their products.

Varied sentiments are heard across the ecommerce world. While a few expect some downside in revenue due to the corona virus, others say it’s too early to tell. Unsurprisingly however, a majority of retailers, say the virus will impact consumer confidence.

Key take Aways:

• Early evidence of increased online sales.
• Breaks in the supply chain
• Mixed outlook and uncertainty among retailers.

Early evidence of increased online sales.

Early evidence suggest that retailers are having online sales spikes in flu-related products, such as cleaning supplies and health products.

As more consumers continue avoiding crowded public places, they’ll increasingly turn to online shopping to get their essentials. In fact, JD.com, China’s largest online retailer, has seen sales of common household staples quadruple over the same time period last year.

With the growth of ecommerce, corona virus shouldn’t disrupt the economy as much as the SARS outbreak did in 2002. However, it will still bring strain to online-based businesses who need to deal with potentially delayed deliveries or out-of-stock items because of increased demand.

However, the long-term impact for the corona virus is not yet known, and many retailers are lowering their sales forecasts for the year, in spite of these early spike in sales.

Breaks in the supply chain

Consumers value fast delivery times more than ever before, the question that every managers should deal with is, can your brand handle this higher demand?

Ecommerce supply chains will be strained by COVID-19 as well as factory closures in China.

These factor closures will also impact mass merchants, who will almost certainly experience supply chain disruption, a drop in casual shopping, and an increase in purchases of essential toiletries, groceries, and health items.

Supply chain disruption is the most significant impact happening right now because of the Corona virus within the eCommerce space. Many brands today manufacture goods in Asia, the most heavily hit geography to date. But as the virus spreads, even those that manufacture within Europe and the Americas will begin to feel the same challenges already arising in Asian manufacturing.

Mixed outlook and uncertainty among retailers.

The early data expresses concerns about the supply chain and consumer demand. Asked about what they’re doing to respond to corona virus, many retailers are taking aggressive action, while the majority are taking a “wait-and-see approach.

While, a bullish scenario argues that consumers will shift more and more purchases online as they avoid public places, this has not happened on the ground. And a more realistic scenario might be this:

I can see many businesses laying off people, even closing down. Many people will be without a job and no income. Poverty and starvation await. This depends on the severity of the lockdown, but for those places that have it, the effects will be severe. For example, Italy earned 237 billion euros in tourism in 2019. It must be close to zero with the lockdown. Many shops, all cafes, restaurants and other places are shut. No customers, no income, pretty soon... no business. Purely online stores like Amazon are probably ok, but many bricks and mortar businesses are also online and cannot survive with only online sales.