Covid-19 changes online shopping forever

The coronavirus pandemic has changed online shopping forever, with almost half of global consumers spending in virtual rather than physical stores, accelerating the shift to a more digital world, according to an intergovernmental body.

Forty-nine per cent of the consumers polled in a study from the United National Conference on Trade and Development now shop online more frequently, with consumers in emerging economies making the biggest shift to digital.

“The Covid-19 pandemic has accelerated the shift towards a more digital world. Changes we make now will have lasting effects when the world economy starts to pick up again,” said Mukhisa Kituyi, secretary-general of UNCTAD.

Despite the surge in online shopping, the average amount spent per month dropped as consumers delayed larger expenditures and those in emerging economies focused on only buying the essentials.

“During the pandemic, online consumption habits in Brazil have changed significantly, with a greater proportion of internet users buying essential products, such as food and beverages, cosmetics and medicines,” said Alexandre Barbosa, manager of the Regional Centre of Studies on the Development of Information Society at the Brazilian Network Information Centre.

The global shift to digital shopping came as governments closed down shops, schools and businesses to curb the spread of the pandemic. Supermarkets ramped up delivery slots to cope with the surge in online demand for groceries. In the UK, for example, the shift to online helped retail spending rise above pre-pandemic levels.

Retail sales increased 0.8 per cent in August, according to the Office for National Statistics – the fourth consecutive month of growth – leading to a 4 per cent rise when compared to February’s pre-crisis level.

However, the rise in online shopping during the pandemic differs between countries, according to UNCTAD's Covid-19 and E-commerce study, with the biggest increases found in China and Turkey, where 78 per cent and 65 per cent of respondents, respectively, now shop online more than before.

The weakest shift to digital was found in the European countries of Switzerland and Germany, with increases of 30 per cent and 32 per cent, respectively.

UNCTAD found the switch to digital more pronounced among women than men, with the 35 to 44 age group experiencing the biggest change in shopping habits.

Online purchases increased by 6 to 10 percentage points across most product categories, with the biggest gainers ICT and electronics, gardening and do-it-yourself products, pharmaceuticals and education and online courses.

Tourism and travel suffered the biggest drop in monthly average spending, with a fall of 75 per cent, while home furnishings and household products tumbled 53 per cent. The food and beverages category was the least affected by the drop in expenditure in the retail sector.

When it came to delivery of online purchases, home delivery was the preferred option for 85 per cent of respondents in all countries.

Meanwhile, small merchants in China were most equipped to sell their products online and those in South Africa were least prepared.

“Companies that put e-commerce at the heart of their business strategies are prepared for the post-Covid-19 era,” said Yomi Kastro, founder and chief executive of Inveon. “There is an enormous opportunity for industries that are still more used to physical shopping, such as fast-moving consumer goods and pharmaceuticals.”

The poll of 3,700 consumers in nine emerging and developed economies also found that changes in online activities are likely to outlast the Covid-19 pandemic, with most respondents, especially those in China and Turkey, set to continue shopping online and to focus on essential products in the future.