POST TIME: 4 April, 2020 00:00 00 AM
E-commerce sector feels coronavirus pinch

E-commerce sector feels coronavirus pinch

The e-commerce sector of the country has started feeling the brunt of COVID-19, triggering panic amid the global pandemic.

E-commerce has greatly impacted as both rational and irrational fears take hold due to the global outbreak of coronavirus.

Industry insiders said, online orders have declined drastically since the first identification of COVID-19 cases in the country. E-commerce businesses that import goods or raw materials from China are unsure about the impact of the virus on the supply chain and product demand.

A number of retailers are lowering their sales forecasts for the current year as they are still in the dark about the long-term impact of the coronavirus. Many of them have already changed their 2020 outlook from a positive to a negative one—they expect the sale and revenue to fall.

E-commerce sites selling daily essentials and health products, such as masks and sanitisers, have seen a spike in their sales. But fashion, IT services, cosmetics, and sellers of other imported products have taken a hit.

AjkerDeal.com, a top e-commerce site of the country, is keeping a close watch on how COVID-19 is impacting the company’s supply chain and product demand.

“COVID-19 creates a supply chain uncertainty and could create demand uncertainty as well,”

said Fahim Mashroor, chief executive officer (CEO) of AjkerDeal.com.

“Following the government's directives of an unofficial lockdown, all public transport is off now. As the delivery system is not working, e-commerce too is almost off at present,” he added.

A number of companies that import products from China, the epicentre of the coronavirus outbreak, have faced a severe disruption of the supply chain, said Mashroor.

“A few essential products are being sold through e-commerce, but fashion forward products have totally stopped. We are going to face a loss due to the coronavirus. As the situation is worsening, a number of e-commerce companies may have to take harsh decisions like job cuts and total shutdown,” he added.

Asif Ahnaf, chief executive officer (CEO) of Aponzone.com, told The Independent, “We postponed all our B2C activities till April 4. But this has been extended till April 11 as the government has extended the lockdown till that period.”

“The situation is deteriorating every day. We don’t know what lies ahead for us. But it’s certain that we will incur huge losses due to the pandemic,” he said.

Mohammad Sahab Uddin, vice-president of the e-Commerce Association of Bangladesh (e-CAB), said, “As per government directives, most of our companies

have stopped operations due to a shortage of delivery personnel.”

“The companies that sell essential goods and medicines are running their operations. Their sales are shooting up as demand is growing. A2i, post offices, and law enforcers are helping them deliver their products timely,” he added.

“The selling of consumer products, fashion forward products, and IT-related services, has almost collapsed. Outsourcing has also collapsed as the recipient countries are in big trouble due to COVID-19,” Shahab said.

“Both small and large entrepreneurs will be affected negatively. As the global economy is in a tight situation, we are also being hit,” he added.

“A large number of companies will not be able to repay their loans. Some may not be able to pay employees’ salaries, utility bills, and office rent. All this may lead to the shutting down of businesses,” said Shahab.

“According to our estimates, we may face a loss of around Tk. 600 crore for just paying utility bills. Job cuts, company shutdown, and business postponement are out of this calculation,” said the e-CAB president.

To bounce back from this shaky situation, e-commerce companies need the government's help and incentives.

“We urge the government to provide us with interest-free loans, special incentives, exemption from surcharge on existing loans, and postponement of loan installments. We have to revive e-commerce as it is the main industry of the future economy,” said Shahab.

The COVID-19 outbreak is indeed a health concern that is and will continue to impact buying patterns and business execution in the coming months. Major initiatives have to be taken to boost the e-commerce sector.