You probably have read this sentence more than once – pandemic influenced us all. Of course, this is a fact. Changes are clearly visible in every field of life. After a year, you can see some trends and how the economy in this new reality is shaped. Also, issues associated with SDGs are becoming more and more important for the whole globe, but no need to say that pandemic has influenced them too.
How does the economy cope with this situation? What about the e-commerce industry across the globe? To answer this and many more of these topic related questions, UNCTAD and eTrade partners provide a report. Here are a few thoughts from it. This is a very broad review, so we recommend that you dive into it to get more insights.
1. Pandemic is forecasted to have a greater influence than the 2008/9 financial crisis
Prior to the pandemic, it was forecasted that global GDP would grow by 4% by 2020, but these projections were replaced with a decrease of similar percentages. World Bank warned that a sudden recession that reached many highly developed countries’ export would affect developing countries. This was about 150 countries and this scenario was to fulfil against the second wave of COVID-19. For the majority of European countries, this was June 2020.
The pace of changes is different depending on the structure of countries’ economies, development and the number of listed COVID-19 cases. This does not change the fact that the exchange of goods between these countries was initially very difficult. Nobody was prepared for such large restrictions and basically a global lockdown.
When will recovery take place? It is impossible to designate one date. It will certainly be a long-term and uneven process. A country with economic support services and systems in place can adjust more quickly to the shifts in the economic cycle than one that relies solely on day-to-day business. Developed countries have introduced support packages for entrepreneurs; unfortunately, in developing countries, all entrepreneurs affected by the crisis could not count on such aid. An example of a country that supported its citizens is the UK, where the government has subsidised employees furloughed during the
crisis remuneration and assured a diverse support package.
In addition, the EU supports its global relationships and assists countries with dealing with pandemic causes. Kyrgyzstan, Kazakhstan and Tajikistan, for instance, are reported by UNECE to be delaying tax payments, introducing VAT exemptions, and prolonging interest and rent payment periods.
2. Trade was one of the most suffered industry
There have been many variations over pandemic times, and trade across countries’ differ. The most significant trends since the pandemic’ start were:
- Compared to February a year earlier, Chinese exports dropped by more than 21 per cent, affecting both local output and import demand, but have recovered since as the infection rate in China has remained low.
- African and Asian exports have been significantly affected by factory shutdowns in the European Union. According to the International Trade Center (ITC), African exporters could lose around USD 2.4 billion due to factory closures in China, the US and Europe. A temporary disruption of the EU’s supply chain will account for 70% of this figure.
Moreover, trade in the service industry has been affected. From a group of 37 countries in 2019 export accounted for about ⅔ of global services export. It decreases by 10.4 % compared to 2019 in the first quarter.
No surprises, tourism has suffered very badly. Before the pandemic, it accounted for about 24% of global commercial services exports; 32% of came from developing countries and 50% from LDC ones. After COVID-19 hit the word, international tourist arrivals decreased by 44% only between January and April 2020. It is expected that arrivals drop account between 58% and 78%, depending on how pandemic restrictions would evolve.
3. Online entertainment
Online entertainment has become a substitute for activities that have been limited. UNCTAD has provided a survey in nine countries in mid-2020. It showed that 58% of responders were browsing and spending quite a lot of time on online entrenchment. A great example of that is Netflix which gained 26 million new subscribers in the Q1 and Q2 of 2020. In 2019 this numbers was 28 million but during the whole year.
Also, gaming was a way to deal with free time. Both Nintendo and Tencent experienced gaming sales increase during the first quarter. The analysis provided by GamesIndustry.biz shows that sales across fifty major markets rose by 63 per cent during Q1. Moreover, statistics from Comcast show that new games are downloaded eighty per cent more.
4. Domestic e-commerce has increased
E-commerce was doing well before the pandemic. It was developing relatively fast, and people were more and more willing to do shopping online. It goes without saying that online stores experienced heavy traffic during the lockdown, probably much greater than ever before.
In March 2020, over 100 countries implemented national lockdowns, changing their citizens’ habits. One of them was shopping.
The market had to stabilise. After numerous locks and protests against closures and restrictions, many entrepreneurs had time to get out from under, thanks to increased turnover. An example of that is Paystack, which operates among 60,000 sellers in Africa, reported a sharp rise in transactions five times more than before the pandemic.
Within the United States, the percentage of e-commerce swelled from 11.8% to 16.1% in the first quarter, and between 20.3% and 31.3% in the second. When it comes to the Asian market, in Thailand downloads of shopping apps increased by 60 per cent. It happened in the week between the imposition of a partial lockdown and full emergency measures during March.
5. Governments have recovery strategies
UNCTAD surveyed e-commerce firms in 24 countries, including 19 LDCs, to determine the most critical areas for improvement arising from the experience of the current crisis.
During the pandemic, most countries prioritized palliative interventions for a period of time, but some countries began to allocate resources for medium-term strategies for recovery. The most common strategies are the Development of a national e-commerce strategy and More ads for available e-commerce. What is quite surprising No measures taken is the most popular answer.
Strategic e-commerce plans must assess the country’s business environment in detail and identify any critical shortcomings requiring correction. Such assessments must rely upon reliable and frequently collected data that can facilitate trend analysis as well as the disaggregation of data between different types of businesses and sectors. In this way, businesses and stakeholders can benefit from inclusive consultation and partnerships that are essential to designing robust strategies and implementation plans.
To sum up
This report provides many valuable data. It shows trends and tendencies before and during the COVID-19 pandemic. What is very important to say, and what arises from this piece, various countries cope differently with the pandemic crisis, but they all support each other and their citizens.
It is hard to say when our world would be able to back on track, but we can say that most of the countries are preparing strategies, and they would be ready to cope with post-pandemic issues and crises.