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Online Platforms Help Traders Hit by this Year’s Cancellation

Kathy Burns from Reading, Pennsylvania permanently lost her job as a waitress after her restaurant closed in July due to Covid19. She was working 12 hours a day in 3 different jobs while also selling online different products that she purchased from garage and clearance sales. After losing her second job in the middle of August, she decided to do online selling full-time while staying at home.

Kathy has built a quite good reputation as a seller on eBay but her revenue was not enough to support her family. With the continued lockdown and social distancing and forcing people to stay at home, she decided to bring her business to the next level. This is when she started using other platforms like Craigslist, Gumtree, and Shoppok to name a few to sell her products online.

By November, her sales and revenue tripled and she started ordering products from China to be sold on Amazon.

Online Platforms Help Traders Hit by this Year's Cancellation

“I didn’t imagine I’d be doing this full time but what can I do? I’m making money while enjoying it and being at home with my family,” Kathy said. She credited more than 10 classified ad websites and social media platforms for her little success.

Ronald James of Tampa, Florida is a barber who lost his job in May. With the personal care industry being one of the hardest-hit businesses, he is forced to stay at home. A month later, her Filipino brother-in-law told him all the way from the Philippines that he should try offering his services through classified ad sites and social media.

“You can offer home service if that is allowed in your State. You can start with your regular customers if you have their contact details,” Jaime, the brother of his Filipino wife told him over WhatsApp.

Left with no option, he followed the suggestion, and 5 months later, he finds himself having a steady income by continuously doing what he loves to do – cutting people’s hair in their homes.

“I was adamant at first because I have no idea how this Internet thing works but after getting a few customers through Facebook, I told myself I can do this,” James said.

Kathy and Ronald are just two of the thousands of traders, online sellers, and service providers who are helped by online platforms to sell and advertise their products and services online.

Covid-19 Impact on E-commerce Business

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 operating 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.

Online Platforms Help Traders Hit by this Year's Cancellation

The COVID-19 crisis is likely to have long-lasting effects on e-commerce There has been a shift in demand from brick-and-mortar retail to e-commerce

The COVID-19 crisis has led people in many OECD (Organisation for Economic Co-operation and Development) countries to significantly limit physical interactions. Self-imposed social distancing to avoid contagion, together with the strict confinement measures implemented in many OECD countries, has put a large share of traditional brick-and-mortar retail virtually on hold, at least temporarily (OECD, 2020).

In the United States, retail and food services sales between February and April 2020 were down 7.7% compared to the same period in 2019. However, sales increased for grocery stores and non-store retailers (mostly e-commerce providers),1 by 16% and 14.8% respectively.

In the EU-27,2 retail sales via mail order houses or the Internet in April 2020 increased by 30% compared to April 2019, while total retail sales diminished by 17.9%. The resulting shifts from brick-and-mortar retail to e-commerce are likely significant across countries. For example, while in the United States the share of e-commerce in total retail had only slowly increased between the first quarter of 2018 and the first quarter of 2020 (from 9.6% to 11.8%), it spiked to 16.1% between the first and second quarter of 2020.

The development is similar for the United Kingdom, where the share of e-commerce in retail rose from 17.3% to 20.3% between the first quarter of 2018 and the first quarter of 2020, to then rise significantly to 31.3% between the first and second quarter of 2020.

Similar changes are also observed for other regions, including the People’s Republic of China (hereafter China), where the share of online retail in total accumulated retail sales between January and August 2020 reached 24.6%, up from 19.4% in August 2019 and 17.3% in August 2018.

Although the increase of eCommerce activity is massive, it is still not enough to cover the losses experienced by brick and mortar businesses but shifting online is a big help for traders and small businesses to survive in these difficult times.

Online platforms like eBay, Amazon, Craigslist, Shoppok, and other big to medium classified ads sites are big help not only to small businesses and entrepreneurs but also to individuals who want to sell their products and services online like Kathy and Ronald. Without these platforms, people who have no experience selling online and have limited Internet knowledge like Ronald will be left without a choice.

“Although I have contacts with most of my regular customers, I am finding new ones through Facebook and Craigslist. Without this Coronavirus pandemic, I don’t know if I will ever discover Craigslist”, James said.

Kathy said that even if the pandemic is over, she will continue to do business online and plan to expand it with more platforms to reach more customers.

“I always want to do this full time and I think today is my best chance. People are buying online and I want to take that for granted. I think people will continue to buy online when they realize that it is easier than going to the store”, she said.

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