E-commerce in the time of COVID-19
Abstract
This brief discusses how the COVID-19 crisis is accelerating an expansion of e-commerce towards new firms, customers and types of products, likely involving a long-term shift of e-commerce transactions from luxury goods and services to everyday necessities. It also highlights how policy makers can leverage the potential of digital transformation in retail and related areas to support business adaptation and to enhance social distancing, while ensuring that no one is left behind.
Key Messages
- The COVID-19 crisis accelerated an expansion of e-commerce towards new firms, customers and types of products. It has provided customers with access to a significant variety of products from the convenience and safety of their homes, and has enabled firms to continue operation in spite of contact restrictions and other confinement measures.
- Despite persistent cross-country differences, the COVID-19 crisis has enhanced dynamism in the e-commerce landscape across countries and has expanded the scope of e-commerce, including through new firms, consumer segments (e.g. elderly) and products (e.g. groceries). Meanwhile, e-commerce transactions in many countries have partly shifted from luxury goods and services towards everyday necessities, relevant to a large number of individuals.
- Some of these changes in the e-commerce landscape will likely be of a long-term nature, in light of the possibility of new waves of the epidemic, the convenience of the new purchasing habits, learning costs and the incentive for firms to capitalise on investments in new sales channels.
- Despite the efforts of some governments to foster e-commerce during the COVID-19 crisis, persistent digital divides imply that not everyone has been able to participate. Moreover, regulations that are not adapted to e-commerce can create barriers to firms, such as in the case of emerging omni-channel sales models or new modes of delivery. While many of these challenges existed before COVID-19, the current crisis and the new role of e-commerce for individuals and firms has heightened the need for policy action.
- For consumers, systemic challenges related to connectivity, financial inclusion, skills and trust (e.g. digital security, privacy and consumer protection) have been brought into sharp relief. To address this issue, governments could expand affordable and quality broadband to rural and underserved areas, enhance financial inclusion, and foster trust and the acquisition of skills to participate in e-commerce.
- For firms, policy makers should reduce regulatory uncertainty to support the creation of innovative business models, e.g. in the context of an increasingly complementary relationship between offline and online sales strategies.
- Governments also need to address the particular need of SMEs, including by ensuring a fair playing field in the context of intermediated services (e.g. online platforms). Ensuring sufficient competition in the retail sector and a well-functioning enabling environment for e-commerce, including communication services, logistics or trade, is also crucial.
Source : http://www.oecd.org/coronavirus/policy-responses/e-commerce-in-the-time-of-covid-19-3a2b78e8/
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