The e-commerce businesses are gaining more importance due to the behavior of the new consumer, every day they fulfill all their needs in order to access goods and services that provide benefits and have better characteristics. E-commerce keeps growing thanks to the new generation’s trend of buying online, this improves their lifestyle, which is now being determined by the worldwide pandemic.
According to the Organisation for Economic Co-operation and Development (OCDE), e-commerce is “The process of buying, selling or exchanging goods and services through communications channels”. Currently, we are witnessing how this style of business takes over the internet and becomes a successful business model. Usually used by new entrepreneurs or startups. Through e-commerce, some industries have reflected growth despite the conditions created by COVID-19.
Purchases via E-commerce
The purchases via e-commerce in the United States have increased more than 30% since the beginning of March until mid-April, in comparison to the same time period last year according to the investment firm Rakuten Intelligence. The purchase of books rose 295% in comparison to this period last year, followed by cleaning products, sports goods and outdoor activities, toys and games, and home goods; being the trending products in the e-commerce market. On the contrary, the purchases of jewelry and clothing have decreased.
The pandemic has been good for online shopping, according to Bloomberg Intelligence, the sales of online retailers in the United States can double for the year 2024, which is an accelerating trend due to the closing of stores caused by the coronavirus.
Therefore, Latin America is not detached from today’s turbulent market. According to the eMarketer article, Latin America has registered a strong increase, expecting a growth in the sales of retail e-commerce to be 19.4% up to 83.630 million dollars in 2020. Also, it is estimated that 10.8 million consumers will shop online for the first time this year, due to circumstances of the pandemic, which would raise the number of online shoppers to a total of 191.7 million or 38.4% of the population over 14 years old.
According to Asobancaria, the last five years have shown a 24% increase in the e-commerce market in Colombia, predicting for 2021 that the country will sell over 26.073 million dollars through online shopping.
Is it Worth Opening an Online Store During a Pandemic?
The pandemic, especially the widespread impact of COVID-19, has disrupted global commerce in ways we had never anticipated. With restrictions on movement, social distancing protocols, and an overall change in consumer behavior, businesses have had to adapt or risk becoming irrelevant. One of the prominent shifts has been the surge in e-commerce, as many brick-and-mortar stores faced temporary or even permanent closures. Given this new paradigm, is it worth opening an online store during such times? Let's explore this question.
Advantages of Opening an Online Store During a Pandemic
1. Growing Digital Consumer Base: As people were restricted to their homes, online shopping saw unprecedented growth. With this trend, even those who were previously hesitant to shop online have now become accustomed to the convenience of e-commerce.
2. Lower Operating Costs: Compared to a physical store, an online store often demands less in terms of rent, utilities, and in some cases, staff. This reduced overhead can be a significant advantage, especially during uncertain times.
3. Flexible Business Hours: An online store can operate 24/7, allowing customers from different time zones or those with varied schedules to shop at their convenience.
4. Global Reach: Physical stores are restricted to their geographical location, but an online store can potentially reach customers from around the world.
5. Safety: Online operations minimize the health risks associated with physical interactions, making it a safer alternative for both customers and business owners during a pandemic.
Challenges to Consider
1. Increased Competition: Given the boom in e-commerce, many businesses are going online, leading to stiff competition. Differentiation and effective marketing become crucial.
2. Supply Chain Disruptions: The pandemic has affected global supply chains. This can result in delivery delays or stock shortages, potentially affecting customer satisfaction.
3. Technical Glitches: Not everyone is tech-savvy. Setting up an online store may come with its learning curve and technical challenges.
4. Customer Trust: With an influx of new online stores, building trust can be a challenge, especially for new entrants without an established reputation.
5. Return and Logistics: Managing returns, handling shipping, and logistics can be complicated and require a well-thought-out strategy.
Is It Worth It?
The answer largely depends on individual circumstances, business models, and the target audience. For those with products or services that cater to the needs arising from or accentuated by the pandemic, there's a clear advantage. Additionally, if one can identify a niche or offer unique value, there's potential for success.
However, merely moving to an online platform without a clear strategy or understanding of e-commerce dynamics can be risky. It's essential to conduct thorough market research, understand the audience's needs, and be prepared to adapt.
In conclusion, while there are significant opportunities in opening an online store during a pandemic, it's not a guaranteed success. Like any business venture, it requires careful planning, understanding of the market, and a dedication to providing value to customers. If approached strategically, an online store can not only thrive during a pandemic but also set the foundation for long-term success beyond it.
Conclusion
In the face of a pandemic, the world of e-commerce presents both vast opportunities and unique challenges. The surge in digital consumers indicates a promising horizon for online businesses, yet success hinges on more than just having a digital presence. It requires strategic planning, market acumen, and a genuine commitment to serving customers' evolving needs. While there's no one-size-fits-all answer, for those willing to navigate the intricacies of the online marketplace, the rewards can outweigh the risks, ushering in not just short-term gains but also long-term business resilience.