COVID-19 and the e-commerce surge

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The novel coronavirus, also known as COVID-19 has thrown the world into fear and changed our way is life, predictably, forever. Our conversations are now dominated by new catch vocabulary like “social distancing”, “lockdown”, “quarantine”, “remote working”, “working from home”, etc.

As at the time of writing this piece, the globe had over 2.5million cases of the virus, with nearly 200,000 deaths. In Ghana, infection cases were one, thousand, one hundred and fifty-four (1,154) with nine deaths! The World Health Organisation (WHO) has also warned Africa to prepare for the worst.

The impact on industry as a result of measures taken by various governments across the world to halt this pandemic, has been collossal as many countries have instituted lockdowns, travel bans and curfews.

There is likely to be a significant slowdown in Ghana’s GDP growth, significant shortfalls in petroleum revenues, a fall in import duties, shortfalls in other tax revenues, increased health expenditures and tighter financing conditions.

Demand for oil (Ghana’s most valuable export) and traditional exports have fallen sharply. Many employees have been laid off and some have had their working hours reduced. Definitely, the coronavirus is not just a public health emergency and the world is definitely in crisis.

According to a recent study by Dcode Economic & Financial Consulting, COVID-19 presents short term losses in industries such as Aviation & Maritime; Tourism & Leisure; Automotive; Oil & Gas: Education; Construction & Real Estate; Financial Services: and Manufacturing(except manufacturing of essentials like hand sanitizers, ventilators, PPE, nose masks, gloves, etc).

However, the present COVID-19 pandemic also presents a boom for e-Commerce; ICT; Agriculture; Personal & Healthcare; Medical Services & Services; Food Processing & Retail as captured in the same study.

COVID-19 and Ghanaian Online Shopping Behavior

This study generally mirrors a survey recently conducted by the Ghana e-Commerce Association on “The Impact of COVID-19 on the Ghanaian Online Shopper” where over 100 views were collected before, during and after the partial lockdown in Ghana. Respondents were professionals, students, etc with the largest percentage aged 30-44 years old (41%); 18-29 years (30%); 45-60 years (26.5%).

In a question posed to respondents, whether they have avoided public places like malls, markets and supermarkets in the recent month, 85% said yes; with only 15% saying they haven’t. Asked whether they were likely to avoid the malls, supermarkets and markets if COVID-19 intensifies, an overwhelming 98% said yes.

Over 94% respondents claim they will consider online shopping now and 89% said they will continue shopping online even after COVID-19. 60% of the respondents were prepared to accept delays in receiving their orders as a result of extra demand, though mobile money was an overwhelming mode of payment over debit/credit cards or cash on delivery.

According to the survey, these products were the preference of the Ghanaian online shopper during COVID:

  1. Food
  2. Hand Sanitizers, Masks, Gloves
  3. Medicine
  4. Technology products-Mobile phones, laptops, etc
  5. Cosmetics
  6. Fashion and Apparel
  7. Insurance

Increased e-Commerce Patronage

Across the globe, e-Commerce has seen a steep spike in demand as a result of COVID-19 and in Africa, which previously had a low online shopping patronage, has experienced a big increase in sales as consumers avoid physical stores and problems related to panic buying like long queues, panic buying, conditional sales, etc.

Concerns around the virus prompted people to self-isolate and limit their social interaction. Resulting in stocking up on food and other items. Therefore, e-Commerce is a perfect solution during a time when physical interaction should be limited, and unsurprisingly online sales are on the ascendancy!

For example, world leading online shopping site, Amazon is hiring 75,000 additional workers after it filled more than 100,000 positions in March 2020 due to increased demand as a result of coronavirus. As it continues to hire more workers, Amazon has also raised employees’ hourly pay and doubled overtime pay for warehouse workers.

According to Peter Ndan’gui, CEO of Gobeda, an e-commerce platform based in Kenya, they recorded a tripling of orders as more Kenyans are shifting to online shopping rather than visiting brick-and-mortar shops as shopping for groceries, especially has become critical.

In Ghana, this trend of increasing demand and patronage of e-commerce holds true.

Alex Biga, a pioneer of Ghana’s e-commerce industry and Founder of Zoobashop says, “With every recession, there are potential winners and losers. Ecommerce is a definite winner as far as the COVID 19 pandemic is concerned. It evidenced by the number of new contacts for collaboration we continue to receive from large multi-national who prior to this point have underestimated the power of ecommerce channel to their business.’

He added, “We have seen order numbers surge, and we are riding the wave while ensuring that we put in stringent measures to guarantee the safety of our customers and ultimately our team.”

Ebenezer Lartey, CEO, MarketExpress, an online grocery supermarket in Accra, also collaborated the spike in online purchases, “We’ve had to increase the number of people on our delivery team because it was a challenge meeting the promise for same day delivery. We tried to give new users an experience to make them appreciate how relevant and convenient e-commerce is.”

CEO of Hubtel Ghana, Alex Bram told Joy Business since the advent of COVID-19, they have seen a boom on the e-commerce platform in terms of merchants signing on, people making purchases, first time users and the number of deliveries they have had to make since the outbreak.

He revealed, “This is perhaps a wake-up call for everyone that e-commerce is the way to go and so even though COVID-19 is not desirable, it is also driving the use of technology to solve our problems as a country,” he said.

COVID-19 and currency notes infection

With 60% of the Impact of COVID-19 on the Ghanaian Online Shopper survey preferring to use mobile money as payment of e-Commerce goods, another channel of infection could be largely eradicated as the World Health Organization has issued a warning that handling money may spread coronavirus and is urging people to stop using cash when they can.

In a warning last month, the WHO reminded people that money picks up the disease which can stay on surfaces for hours if not days.

‘We know that money changes hands frequently and can pick up all sorts of bacteria and viruses and things like that. We would advise people to wash their hands after handling banknotes, and avoid touching their face.”

In certain countries like the United States, China, South Korea, Hungary and Pakistan, physical cash received at the bank is quarantined for 10 days to a fortnight before releasing them back onto the market when the virus would have outlived itself on the surface of the currency. We do not know yet whether there is any such policy in Ghana so reducing drastically, the use of physical cash could be a good preventive measure.

This situation also is a boon to the debit and credit card players like Visa, MasterCard, PayPal and particularly online payment platforms in Ghana such as Emergent Payments, Zeepay, AlexPay, Ezipay, etc.

The new normal

e-Commerce in Ghana is slowly building up to a crescendo as there has been a gradual increasing number of  government interventions encouraging the growth of a cashless society.

Vice President Mahamudu Bawumia’s recent launch of the Universal QR code and ProxyPay, a digital payment product introduced by the Bank of Ghana and GhiPPS are shining examples. At the outbreak of the disease, the Bank of Ghana in collaboration with the banks and telcos also introduced a “no fee charge” on all mobile money transactions below one hundred Ghana cedis to reduce the overdependence on cash during purchases.

From some of the reasons above, e-Commerce may also be a crucial tool in reducing COVID-19 cases as it eliminates much person-to-person transactions, reduces the incidence of exchanging potentially-contaminated currency notes and enhancing social distancing measure.

COVID-19 has changed our way of life by introducing so many “new normal” situations.

Mandatory wearing of nose masks is a new normal;Family meetings on skype, whatsapp, etc is a new normal; Remote working is a new normal.

Perhaps, buying your household needs online is also a new normal

The writer is the Executive Chairman-Commerce Association of Ghana

[email protected]

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