• Susan Lau

Covid-19's Effect on the E-Commerce Industry


As we all hunker down and get used to working from home and practising social distancing, one thing is on the rise for sure and that's online shopping. Just realised you don't have the proper set up to work optimally from home? Ran out of toilet paper? 'Need' a box of your favorite instant noodles? With just a click and some patience, your stuff will arrive at your doorstep in just a few days (depending on where the things are coming from of course)!


So what does this pandemic mean for traditional brick and mortar shops? Essential businesses are allowed to operate but with minimised hours and a lot less foot traffic, Small and Medium Enterprises (SMEs) are headed for a large decline in revenue. Decreased revenue while maintaining overheads and labour costs could spell out trouble especially if the Movement Control Order (MCO) is extended for a few months. The prolonged profit loss could lead to retrenchment and possibly shuttering of a business especially if it's an SME.


On the other hand, according to Covid-19 World Commerce Impact, online retail activity is up 200%* in Malaysia. E-commerce seems to be the answer to a lot of SMEs' woes as even Cameron Highlands vegetable growers are on various online selling platforms. Thinking outside the box and utilising what they can, during these restrictive times, these growers are selling their vegetables via online platforms and using delivery services. Previously a primarily offline business, these businesses had to adapt to the current situation and find a way to maintain or even increase net profits.

We're seeing this as well with retailers which have both brick and mortar stores alongside e-commerce sites. They are fully utilising their sites in order to try and offset losses in sales from their stores and perhaps stay afloat until this whole thing blows over.


However, one thing to consider is consumer buying habits as the MCO is extended. This is because there are a lot of people who have been retrenched or on unpaid leave which greatly diminishes their buying power.


It all seems a little doom and gloom but we should do what we can. Those who can afford it should support local SMEs so they can continue to stay open for another day. Once everything has settled down and it's safe, travel local, stay at locally-operated homestays, and eat at locally-owned shops, however you're able to support local SMEs, go for it! The country will heal and we believe that it's a collective effort. See you on the flip side!


*At the time of writing 22/4/2020

References:

1. www.techrepublic.com/article/map-shows-how-covid-19-has-a-major-impact-on-e-commerce

2. https://ccinsight.org/

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