Email Marketing is not dead! Try Probaho, a homegrown ESP from Bangladesh ▶ Join Now

The Coronavirus Pandemic Has Fast-forwarded the Future of eCommerce

While the business of almost all verticals is down, the number of first time ecommerce shoppers has grown many times in the first quarter of 2020. 

A number of online grocery businesses we spoke with in the past few weeks reported a sharp rise in orders from new users who never ordered on their platforms before. 

While physical retail continues to suffer and is unlikely to rebound any time soon, the coronavirus pandemic has fast-forwarded the future of ecommerce in Bangladesh by multiple years. 

This is not to say that physical retail is about to die. Physical retail will remain. In fact, a large part of business is unlikely to dramatically change and transform into digital businesses. But the fact that the internet usage has exploded and that people are looking up things online, using digital tools and services are some indisputable facts. And I'm positive that some of these behavioral changes will stick around and be lasting consumer trends in the foreseeable future. 

There are certain verticals that are gaining consumer trust and benefiting from mass consumer adoption due to the pandemic lockdown. 

Take, for instance, online grocery. The companies like Chaldal and Khaas Food have seen unprecedented rise in the number of orders to the extent that most online grocery companies have already got a bad rap for not being able to fulfill orders on time. 

There are supply chain challenges behind not being able to fulfil orders but a sudden rise in the number of orders is also a meaningful factor behind the customer service failure that many digital commerce companies are facing. 

There are other verticals that are seeing an uptick in adoption and demand such as online learning. While lacking a prominent market leader as yet, almost every player in the vertical has gained added traction that can be traced back to the pandemic changes. 

Overall, digital commerce has gained new customers as well as exposure to new segments of users who would otherwise have taken a long time to come to digital commerce. This is true across verticals in digital commerce. And the sudden boom is likely to sustain in the coming years and accelerate the growth of ecommerce and digital businesses in the coming years in Bangladesh. 

Lessons from the past

The rise of digital commerce and online groceries during a pandemic is not a new phenomenon and specific to Bangladesh. This has happened in the past. Most recently in South East Asia during and post SARS outbreak in 2003. 

The 2003 SARS outbreak changed society, and there are a lot of parallels to our current experience. In fact, the SARS outbreak set the stage for the Chinese e-commerce boom. 

Take the story of In 2003, JD was a chain of retail electronics stores and did not have any prominent ecommerce operation. As the SARS outbreak hit China, the company had to shutter most of its stores. The company was forced to post their offers to chat groups in QQ and other online platforms and forums. It wasn’t long before went all-in on e-commerce. Today, is worth over $60 billion. 

Alibaba went through a similar experience. The company decided to launch Taobao, an e-commerce platform that was focused on consumers in 2003. The platform since has become a dominant player in ecommerce in China. 

This is happening everywhere 

Around this time, this story is playing out in almost every market. Some of the data shared by the likes of Shopify, Square, and Uber suggest that there is an unprecedented boom going on for digital commerce across markets amid the coronavirus pandemic.

We don't have public data for growth in Bangladesh since companies don’t share such data. However, a TBS report from a few weeks ago suggests that Chaldal saw over 100% growth from the same time previous year since the pandemic lockdown hit. Another grocery startup Khaas Food saw a 30% rise in orders in the first week of the pandemic. Khaas Food offers a limited collection of grocery products. 

In the US, research company Second Measure noted that “year-over-year sales of delivery companies in the US have increased 78% as of March 29.”

Things are similarly looking up for Shopify, the ecommerce platform that enables millions of small online sellers. Shopify COO Harley Finkelstein shared in a series of tweets that between March 13 and April 24, the number of consumers who bought something for the first time "from any Shopify merchant grew 8% and from merchants, they'd never shopped at before by 45% compared to the six-week period immediately prior." During the same period, he pointed out that the "new stores created on Shopify grew 62%."

These number tell a story that is indicative of a booming ecommerce future in the coming years. 

A lasting shift in consumer behavior 

There is a good chance that some of these changes in consumer behavior will continue to stick post-pandemic and shape the future of commerce in the coming years. In many ways, the pandemic has accelerated the rise of internet and the internet based business and fast forwarded the trends like ecommerce. 

Whether it is ordering groceries online, getting food delivered via Foodpanda, or simply working from home, many of these habits are unlikely to reverse as we slowly ease into a post-pandemic world. If history is any guide, the market rarely moves backward. When consumers learn a new habit, they seldom give up on it. 

Mohammad Ruhul Kader is a Dhaka-based entrepreneur and writer. He founded Future Startup, a digital publication covering the startup and technology scene in Dhaka with an ambition to transform Bangladesh through entrepreneurship and innovation. He writes about internet business, strategy, technology, and society. He is the author of Rethinking Failure. His writings have been published in almost all major national dailies in Bangladesh including DT, FE, etc. Prior to FS, he worked for a local conglomerate where he helped start a social enterprise. Ruhul is a 2022 winner of Emergent Ventures, a fellowship and grant program from the Mercatus Center at George Mason University. He can be reached at [email protected]

In-depth business & tech coverage from Dhaka

Stories exclusively available at FS

About FS

Contact Us