COVID-19: Impacts And The Way Forward For E-commerce Businesses

With the COVID-19 global pandemic being one of the most defining events of 2020, it is safe to say that it will have implications on businesses for years to come. Before the pandemic, the e-commerce industry was experiencing strong growth with rising awareness of online shopping, the ability to launch products online, and low costs due to bulk purchases. 

However, the pandemic has drastically changed things. Social distancing and the policy to stay at home are affecting consumer buying behavior, as more and more people are looking for alternatives to brick and mortar stores for their shopping needs. Restaurants, bars, clothing stores, and gyms are closing down due to dwindling customers.

Online shopping has become the new norm for many customers around the world. This has led to a boom in the e-commerce industry which has seen a huge increase in sales during the pandemic. A recent survey on consumer behavior shows that 21 percent of the respondents claimed to be shopping online more now than before the outbreak.

However, not all segments of the e-commerce industry are impacted in a positive way. An increase in demand has also led to some challenges for both new or established big sellers. Many businesses have taken a hit while others have flourished. There are many long term implications of the pandemic that businesses of all sizes need to consider while moving forward.

Impacts on e-commerce businesses

e-commerce businesses

➢    Tax Obligations

The sales tax landscape is always changing. COVID-19 has placed more tax obligations on online business than ever seen before. Whether you are starting an online business or already an established business, understanding and managing your tax compliance is of paramount importance. Otherwise, you are in deep trouble.

Remote sellers by law are required to meet their tax compliance. As online sales increase, there is a potential of new tax obligations on businesses. These obligations become even more complex and out of control if your business sells internationally. Since consumers can buy your products from anywhere in the world, this access to the global market can bring about some tax complexities such as tariffs and customs duties.

For online businesses that were doing their tax compliance manually, a boost in sales has made this task a big hassle and nearly impossible to handle.

➢    Interruptions in the supply chain

COVID-19 being a global pandemic has affected businesses in nearly all parts of the world. The consequence of this pandemic is a disruption in the supply chain felt by the manufacturers all the way to consumers.

Research has shown that the outbreak has interrupted the supply chain of almost 75% of companies in the US. Moreover, 82% of SMEs in the UK are facing a hit to their supply chain. With no effective measures in place to combat a rise in demand, companies are facing extreme difficulties in managing their supply chain. This has also led to frustrated customers and order cancellations.

The electronics industry is the worst affected by the pandemic. Most of the companies in the electronic industry rely on Chinese products and manufacturers for their supply. As the outbreak worsened, factories in China were shut down causing a collapse to the supply chain.

For new or established e-commerce businesses, it is important to keep track of your inventory to make sure that the products you are selling are always available. It may take a longer time for your supplier to fulfill your orders. The best thing you can do is be transparent with your customers and let them know about the problems you are facing due to the disruption of the supply chain.

Opportunities for businesses

e-commerce business graph

Every challenge in the business world creates opportunities for the future. COVID-19 is no different. On the one hand, businesses around the globe are impacted. On the other, numerous opportunities have come up for businesses to adapt to the future. Here we look at a few of these opportunities.

➢    Tax Automation

As mentioned earlier, businesses these days are facing tax complexities due to increasing sales leading to new tax obligations. Fortunately, businesses can use tax automation technology to track these changing tax obligations in real-time. This allows businesses to remain compliant while also saving tons of time spent on tracking new obligations manually.

➢    Automated supply chain management

To combat disruptions in the supply chain, businesses can make use of enterprise resource planning systems. These systems are useful in tracking real-time resource consumption. This automates inventory management and helps businesses plan their product delivery dates in advance to avoid potential shortages.

Some other things that e-commerce businesses can do are as follows.

  • Display stock levels in real-time.
  • Provide customers the ability to track their orders for managed expectations.
  • Out-of-stock items should be displayed properly, and customers should be informed when to expect them back in stock.

➢    Optimising your website performance

Companies that are facing issues with site performance and stability due to an online traffic influx can explore the following opportunities.

  • Implement the right web store host to support the site.
  • Delay certain web page elements from loading for a smoother experience. What you can also do is optimise the images on your website. This will provide a faster page load speed and overall a positive user experience.

➢    Optimising your digital strategy

In these times, it is crucial to adopt smart digital strategies for achieving long-term profitability. Here are some ways businesses can do that.

  • Managing PPC budget efficiently by cutting back on non-essential keywords that do not generate conversions. Instead, invest in keywords that are more likely to generate conversions.
  • Retain organic visibility by investing in the latest SEO practices. Businesses with optimised SEO will be in a better position to do business when compared to the rest.
  • Due to work from home policy, a lot more people will be using social platforms. This is a great opportunity for businesses to reimagine their social media strategy. One of the ways to do this is by letting your customers know that we are here to help you.


Millions of consumers around the world are changing their buying behavior. How e-commerce businesses choose to react will define their future. For businesses wanting to go online, there are tremendous opportunities available to explore. There is no doubt that COVID-19 will stay and change the retailing landscape for years to come.

If you are an individual or a business wanting to go online, take a look at our e-commerce development services.

Leave a Reply

Your email address will not be published. Required fields are marked *

4 − 1 =

Call Contact Us