E-commerce is one of the biggest winners from Covid-19 as lockdowns, social distancing, and general health concerns drive consumers and businesses to change their behaviour or look to new sales channels as they transform their business models. As digital adoption accelerates, the role of e-commerce is unlikely to diminish even as vaccines are rolled out and the pandemic dissipates in the coming months.
From China to India, Southeast Asia, Europe and the US, e-commerce spending has been surging and set to account for a rising proportion of the total GDP. “The real impact for the industry isn’t just the customers who will use e-commerce during the pandemic and go back to their normal outside shopping habits,” explains Vlad Totia, payments analyst at GlobalData, a data and analytics company. “The retention level for people already used to doing most of their shopping online will be the real growth engine for the industry.”
Indeed, forecasts for e-commerce growth show that Covid-19 was an accelerator for a phenomenon that was already happening. “E-commerce was steadily becoming a bigger industry while people were slowly getting more comfortable with buying their products online,” he continues. “However, with this being the preferred shopping method for the foreseeable future, forecasts show an immense retention for the industry.”
In China, GlobalData expects e-commerce spending to grow from 10.4% in 2019 to 12.4% in 2021, a two-percentage-point increase per GDP.
“Online groceries are the next battleground and on track to become the second-biggest online retail category in China by 2022,” believes HSBC in its latest China report. “What’s especially attractive for China’s large online players is that this is one of the best channels to acquire new users, especially those aged over 30. They typically become frequent buyers, using apps to buy fresh food twice or three times a week, and can also be cross-sold a wide variety of other products.”
In the case of India, alternative payments have gained significant prominence among online shoppers with mobile and digital wallets gradually displacing traditional payments such as cash and cards amid Covid-19, according to GlobalData. The Indian e-commerce market is estimated to be valued at US$60.5 billion in 2020, up from US$23.7 billion in 2016. This represents a CAGR of 26.3% between 2016 and 2020. It is expected to increase further to reach US$111.3 billion by 2024.
In Southeast Asia, a Google/Temasek/Bain & Co study published in 2020 projects e-commerce to grow to US$172 billion by 2025 from the US$62 billion gross merchandise value in 2020. “Over a third of 2020’s online commerce was generated by new shoppers, of which eight in ten intend to continue buying online going forward,” it notes. In addition, many SMEs moved online as e-commerce became the only available retail channel.
What can businesses learn from the e-commerce surge underway? How can companies take advantage of technological change to bolt on a new driver for growth in the post-Covid era? How are the largest e-commerce companies continuing to stay relevant and what trends do they see out there in terms of consumers/businesses buying behaviour? What has been the experience of logistics companies in servicing the pick-up in last-mile delivery from online shopping? How are banks embedding their financing solutions to business platforms? What are the challenges that face traditional industries that rely on paper for documentation? What progress is underway to improve the turnaround and be able to enjoy the benefits of e-commerce platforms?
The Asset Events+, in partnership with DBS, is pleased to be hosting a discussion forum on how e-commerce is reshaping the hub-and-spoke model on the 8th of March 2021 at 5pm Hong Kong time. The panel of experts include:
Shao Xinzhi, vice-president and CFO, Haier Group
Axel Hauke, treasury manager/trader, AgroCorp
Vipin Garg, director finance/group treasurer, Flipkart
Ramon Abalo, managing director, Australia Post Global eCommerce Solutions
Sriram Muthukrishnan, group head of trade product management, global transaction services, DBS
Join the discussion and get a chance to ask our experts to share their insights on how e-commerce could drive the next phase of growth for your business. To attend, please click here.