Here at our CUSEF blog, we share news, updates and stories about China and the United States. We provide more than a cursory glimpse of what’s going on between the two powers - here, we offer an in-depth look into their current state of affairs.

News Highlights

Moving Online: E-Commerce Surges Amid Coronavirus

2020-05-29
After the pandemic, e-commerce may be the way of the future. [Photo Credit: Forbes]
After the pandemic, e-commerce may be the way of the future. [Photo Credit: Forbes]

With governments throughout the world limiting public gatherings, malls shutting their doors, and individuals restricting themselves to only essential travel, many retailers have sought new ways to sell their wares to their previous clientele. With face-to-face transactions drastically reduced, the avenues of e-commerce have become critical in many businesses’ efforts to not only make a profit, but remain afloat amid these uncertain times. For many years, China in particular has served as an intriguing case study for e-commerce, and the coronavirus pandemic has only expanded this truth while also pushing other countries to explore this new economic opportunity.

Prior to the virus, e-commerce companies in China were the talk of think-tanks, economic experts, and moguls throughout the world - with powerhouse e-commerce platform JD.com making headlines for its innovative logistics and ability to connect customers in heavily rural areas of mainland China and metropolitan consumers alike with bustling businesses throughout the country. The platform experienced strong competition, particularly from Alibaba owned online marketplace Taobao.com and Pinduoduo; but once the COVID-19 struck communities throughout China and other platforms suspended their deliveries - JD.com stood alone, serving as the sole platform for customers to receive a variety of products amid lockdown.

This trend is seen similarly in the U.S., where over 300 million people have had their lives impacted by various stay-at-home orders and social distancing requirements. American retailers reported in mid-April that their online year over year revenue had increased by 68%, higher than the previously reported increase of 49% in January 2020. Popular online marketplace Amazon.com, often described as the U.S. equivalent of JD.com, exemplified the mass shift to e-commerce in its first quarter earnings report, which stated net sales of more than $75 billion, a 26% increase from one year ago.

Earnings similarly demonstrated continuous e-commerce power in China. Publishing their first quarter earnings reports, China’s ‘Big 3’ e-commerce firms, JD.com, Alibaba, and Pinduoduo posted stunning numbers as Alibaba alone reporting that its gross merchandise value had reached $1 trillion for the year ending March 31. This value is an estimated one-sixth of China’s total retail sales according to analysis from Forbes.

The stories of JD.com and Amazon are two examples of the power that e-commerce currently, and will likely maintain, in a world impacted by the memory of coronavirus. Operating on the experiences of 2020 and its social distancing regulations, it is reasonable to predict that consumers will become patrons of platforms and businesses that can still the desired goods and services in a manner that is not only convenient and reliable, but also safe. With this knowledge, businesses may look creating operating structures that have a decreased vulnerability to pandemic-related interruptions of service; and integrating partnerships or presences on e-commerce platforms will be a critical aspect of this process. It cannot be denied that the coronavirus pandemic dramatically changed the way everyone around the world lives day to day. For e-commerce, the pandemic illustrated the convenience, affordability, and diversity of this sector - drawing in new consumers while also bolstering the loyal customer base of old. As countries seek ways to boost their virus-impacted economies, the strength of the e-commerce sector will be an alluring opportunity for all to capitalize on.

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