In the light of current events, there is plenty of havoc and chaos around you. The global effect on life, business and finance is visible. Due to these unforeseen circumstances there is a massive fluctuation in the economy resulting in the sudden rise and fall of businesses around the world. In the blog we will analyze the data and simplify the effect the pandemic has on the Indian e-commerce industry. It is important to note that much of this data is documented before 15th March, the current and future data may vary.
Let’s start with the basic human nature of panic buying. I’m sure that you have heard the news of people panic buying and leaving the super markets empty for those in need of essential products. This sudden surge in the offline and the online industry has sparked certain concerns and has led to many duplicates being made and circulated in the market. Here is a graphical representation of the stockpiling behaviour which is higher in asian countries as compared to the rest of the world. As clearly visible in the chart that Indians are second in piling up on food and highest in stocking up on water. The question asked during the survey was ‘Have you started stocking up food or water to protect yourself from COVID-19?”. Answering the question 32% of Indians said that they are stocking up on food whereas 34% said that they are stocking up on water. This number has increased over the past few days as even after multiple assurances that vegetables and grocery shops will remain open during lockdown, people are still crowding stores and stockpiling food for months in the fear that the stores may close down like other businesses.
Charts via Ipsos MORI
According to Similarweb data, there has been an average 3.01% decrease in the global e-commerce sector just in the past week. The global e-commerce sector is highly affected as many e-commerce services are terminated due to the outbreak. In India Amazon, Flipkart, Myntra and many other websites have stopped their services indefinitely. Amazon is delivering essentials but on a very minor scale. There is a new trend of many grocery shops providing home delivery as the country is on a 21 day lockdown effective from 25th March 2020. The delivery personnel working in these sectors are at a great risk in order to deliver the essentials to households.
According to the below listed graph, much of the population started using e-commerce to purchase products that they would normally buy in-store. This data was documented in the beginning of the outbreak, due to the recent lockdown in India and other countries the services are terminated by the government until further notice. People are buying basic amenities through offline stores. Before the lockdown almost 55% of Indians started using e-commerce to purchase items that they mostly bought offline. 25% of Indians said that it is less likely that they will use e-commerce websites, as they still find offline stores easily accessible and more reliable. For 14% of Indians there is no difference and they didn’t change their buying patterns at all. The rest 7% of the audience did not use e-commerce services for their household essentials and they are still rushing out of their houses to buy basic products from their nearby stores.
As we glanced over the e-commerce buying behaviour before the lockdown, let’s analyze the data of personal financial impact due to coronavirus. The developed, developing and underdeveloped countries are facing a spell of financial crises on international, national and personal level. 75% of Indians agree that they will be financially impacted due to the virus outbreak. This was documented before 15th March, as the lockdown commenced, all the small and big businesses have been impacted. The groceries, eatables and medical stores stay open to cater to the basic needs of people. These precautionary methods may have a financial cost and can impact business for a longer time but it was needed as the current situation related to the pandemic is getting worse. Many countries like the USA, Australia are still not ready for a complete lockdown and the cases are surging at an alarming rate in these countries. According to The Hindu, the Indian Prime Minister declared that there will be a Covid-19 economic task force headed by the Financial Minister to tackle the financial situation due to the pandemic. The members are yet to be selected and set, but it will be important for the economy to see the measures taken by this authority to rectify the situation.
Being optimistic and hopeful is very important in times like these. Besides the global meltdown and panic. Globally,all the countries are pouring efforts and resources in flattening the curve. The lockdowns are imposed till mid April in many countries. The situation is estimated to get better by June. 80% of Indian believe that the situation will return to normal in the next three months. The trajectory of the pandemic is narrating a different story altogether. Some studies say that it may take as long as September to make the situation better. The confirmed cases in India are above 500 now, with the imposition of the lockdown, it may be contained, but that is at the discretion of time.
You must have seen all the queues and crowds in the supermarkets and independent stores. People are hoarding on basic essentials and leaving the shelves empty. The shortage of products is because of two reasons i.e. the stockpiling of food and other products or the disruption in the supply and distribution. As per the data provided below, 60% of Indians believe that stockpiling is the reason why there may be a shortage of food and other items whereas the rest 40% believe that there is a disruption in the supply chain and distribution.
This pandemic has put a lot of perspective in the world. There are many different studies and analyses that project different results. The number of cases are increasing by the hour and the authorities are taking adequate measures to fight the situation. In this case, it is difficult to estimate the complete impact on the Indian e-commerce. The industry is mainly shut until further notice. Many shoppers have undelivered packages that they ordered a day or two before the lockdown. Provided the data in the above blog, it can be said that there is a sense of panic in the general public as the Coronavirus cases are increasing. The best thing to do is to adhere to all the measures taken by the government and maintain social distancing. Let’s hope and pray for the situation to get back to normal at the earliest possible.