2020 was more than just the closing of a decade; it was an inflection point for individuals, businesses, and economies around the globe. The arrival and spread of the Covid-19 virus slowed several industries, upended the supply-demand balance, and caused many to rethink their strategies for survival and mitigation. On the other hand, the pandemic also piloted innovation, rejuvenated several sectors, and marshalled the growth and adoption of digital solutions and channels that fell in step with virus containment measures across the globe, helping curate the ‘new’ ecosystem. In the days and weeks following the outbreak of the pandemic, consumers and businesses pivoted towards technology, albeit for different reasons: The latter resorted to digitalization to retain customers, capture market share, and emerge gainfully on the other side of the crisis. The former, meanwhile, ventured online to shop, learn and work. E-commerce, having deep interests on both sides, rose as a natural winner.
Looking at recent consumer behavior and spending habits, many companies are now strengthening their online presence and using e-commerce to make their products and services more accessible. In the first five months of 2020, the UAE saw a 300 per cent increase in demand for e-commerce services among consumers. In May 2020 alone, e-commerce represented the highest number of licenses issued to any business sector. Two salient factors will drive this growth: more, newer and digital-savvy shoppers – millennials account for more than 45 per cent of the user base, which is growing at 6 per cent CAGR; and more growth in key segments – online food delivery and grocery are expected to grow by 30 per cent each year until 2025, while fashion and beauty is forecast to experience annual growth of 18 per cent over the same period, the report suggests. Several online platforms shut shop last year, as the economic downturn battered businesses and eroded bottom lines. In H2 2020, UAE-based online marketplace Sprii went into liquidation, while local e-commerce portal Awok ended its operations a year after closing a $30m funding round. Online fashion platforms Nisnass and The Modist to shut shop last year. To boost chances of churning out a profit, companies must stay alert to three stumbling blocks: inefficiencies in the supply chain, changing consumer behavior and an excessive focus on boosting demand through marketing and promotions