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Home > Amazing FBA > Ecommerce and Coronavirus with Jason Somerville
Podcast: Amazing FBA
Episode:

Ecommerce and Coronavirus with Jason Somerville
Category: Business
Duration: 00:33:11
Publish Date: 2020-06-11 18:01:09
Description: eCommerce and Corona Virus  Global Wired Advisors are experienced M & A Advisors for digitally native enterprise E-Commerce and Coronavirus with Jason Somerville of Global Wired Advisors Supply side effects of Coronavirus Started in China - supply chain effect A lot of ecommerce sellers and businesses had stocked up on inventory going into CNY - which mitigated supply chain issues As it spread into EU and USA it became a broader issue Demand side effects of Coronavirus As effects more acute, ecommerce has been affected Quarantine or stay at home order, that’s when bigger picture effects really started. Ecommerce has tended to be affected uniquely compared to others Public Capital markets effects of lockdown Mid march - stock market fell a lot. Business activity ground to a halt Except “essential” businesses Rotating from Virus discussion to post virus discussion. Ecommerce and Corona Virus   When people forced to stay home, many buy goods online. Many other businesses eg travel, airlines, restaurants, local stores been effectively shut off from economic activity for over a month. A lot of businesses that sell consumer goods that are “non essential” A number of clients march sales 4X Q4 in 2019 Supply side challenges for eCommerce and Amazon sellers It’s more an inventory management exercise to fulfil demand Amazon FBA issues Limit inbound Deprioritise non essentials Recession for eCommerce due to Coronavirus Most e-commerce businesses don’t have the downward trend. It’s more like a hockey stick! Within bigger picture, there is a big downward push in sales and economic activity. It’s not so much a V, it’s like a backwards checkmark. So in the short term, the left side of the V is There is a dramatic bounce say 50% of the depth of the left side Then you enter into recovery period The shape of that will be driven by How long the shutdown lasts Every week matters The longer it goes, the longer it takes to come back It won’t be a 1-month bounce back to the usual economy Government stimulus prog’s will also change it How effective How big Eg Federal Reserve etc. has tried hard but they’re inefficient, ham handed. Don’t always work the way they are supposed to work. It’s not just how many $, it’s about how they are delivered. ecommerce and Coronavirus short term -short term shift to online shopping Market share shifts from traditional to online This benefits a lot of ecomm business What to expect for ecommerce after Coronavirus -in the economic recovery stickiness is the key! This is bringing a lot of new customers to online shopping It’s bringing those who were online already, into categories they would still purchase in a retail outlet How sticky is that once economy starts to open up? It won’t be 100% stickiness but it may be 30-40% of that demand stays around for the long term Next factor - consumers damaged in downturn Discretionary items usually  go down in a recession Luxury good or high end (premium) these categories tend to go down first and sharpest Then you move into a new consumer behaviour model The changes in behaviour are correlated to depth and breadth of downturn How to shore up the value of your ecommerce business as an asset? Bucket 1 -  if your ecommerce sales have reduced seriously during lockdown Try to access as much liquidity as you possibly can In USA, a number of progs allow smaller progs to access liquidity for the businesses The investment in the future you make now will pay dividends Because This event is likely to affect consumer behaviour for the long term Ecommerce businesses are a lot more attractive as an asset than historically Get smart about stock management If you’re in a cat that you feel will take off after crisis, be ready!
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