FACULTY OF BUSINESS AND MANAGEMENT

DIPLOMA IN BANKING STUDIES

(MBA1194A)

INFORMATION TECHNOLOGY IN BUSINESS (MGT300)

TITLE: E-COMMERCE AS A PLATFORM FOR BUSINESSES

DURING COVID-19 PANDEMIC

PREPARED BY:

NURUL EZATUL NAZIRA BINTI AYOB (2018644398)

PREPARED FOR:

MADAM NURHARNIYATI BT HUSSIN

SUBMISSION DATE:

15 MAY 2020
 1.0 Introduction

Coronavirus, or better known as COVID-19, has became a global pandemic and

has not only affected the health and economy of the countries around the world, but
the virus has brought volatility in the balance sheet almost to all businesses out there,
regardless small or big companies. According to Olivia De Beukelaer (2020),
disruption in Supply Chain Management (SCM), changes in customer behaviour,
store closures are the examples of harsh impact of COVID-19 to businesses.

Every brands and retailers are uncertain what the future holds for their businesses,
as there is no guarantee to return “business as usual” aftermath of this pandemic.
COVID-19 totally changed the consumers dynamic overnight as consumers are
advised to stay at home, only go out if necessary and practise social distancing
measure when out public.

This is because almost every country follows the lockdown procedures as a

preventing measures and this includes Malaysia as well. Malaysia’s Prime Minister
Tan Sri Muhyiddin Yassin announced that the government has decided to implement
the Movement Control Order (MCO) starting 18 March 2020 under the Prevention
and Control of Infection Diseases Act 1988 and the Police Act 1967 (NST, 2020). The
question is that how to ensure business continuity during this pandemic?

2.0 Coronavirus (COVID-19)

According to World Health Organization (WHO), coronavirus disease

(COVID-19) is an infectious disease. It is important to practice respiratory etiquette
such as cover our nose when coughing or sneezing and wash our hands frequently.
This is because when an infected person coughs or sneezes, the virus can spread
through droplets of saliva or discharge from the nose.

People that are infected will develop signs of respiratory illness and have chance
to recover. However, risk to develop serious illness if being infected is high for older
people and those with serious medical problems like cancer, cardiovascular disease,
diabetes, and chronic respiratory disease.
 The best way to prevent transmission is by well-informed about the virus such as
how it is spread. Humans can take precaution measures by washing hands frequently
or using an alcohol based rub and not touching face directly. According to World
Health Organization (WHO), there are many ongoing clinical trials evaluating
potential treatments at this time as there are no specific vaccines or treatments for
COVID-19.

According to Johns Hopkins University & Medicine on 14 May 2020, at least

297,000 people have died from COVID-19 while 4.3 million infections have been
confirmed in at least 188 countries and territories. Over 1.6 million people have
recovered from the virus.

2.1 Impact of COVID-19 to Businesses

The impact of COVID-19 to businesses are only selected economic sectors are
allowed to operate during Movement Control Order (MCO) period, subject to
approval and health & safety protocols (MITI,2020). This forced the non-essential
brick and mortar retailers such as factory, warehouse or small business such as street
vendor stall to shut down their businesses to limit the physical contact during this
COVID-19 outbreak.

Next, customers that traditionally rejected online ordering are now slowly
adapting to it. According to Scott Clarke (2020), China has recorded 54 percent
increase in online shopping. Globally, 40 percent of consumers use online shopping
subscriptions meanwhile another 36 percent said they would turn to subscriptions in
the future. This became huge opportunity for brands that have managed to pivot
quickly with direct-to-consumer (DTC) e-commerce capabilities, hence changing the
retail landscape.

3.0 Electronic Commerce (e-commerce)

According to Andrew Bloomenthal (2019), e-commerce can be describe as

business model that let firms buy and sell things on the internet. There are four types
of major market segments that operate under e-commerce such as Business to
Business (B2B), Business to Consumer (B2C), Consumer to Consumer (C2C) and
Consumer to Business (C2B).

The term “electronic” in e-commerce means the transactions can be conduct

using smartphones, computers or tablets. The history of e-commerce begins when a
man sold a CD by the band Sting to his friend through US retail platform called
NetMarket on the 11th of August 1994. This marked the first “secure online purchase”
or e-commerce transaction in the history (Tucker Schreiber, 2016).

Business can ensure its continuity during this pandemic by moving their
customers online using the e-commerce platform. They need to remind their
customers that their business is still operational and there are other ways to buy their
products even though the physical stores are closed. According to Olivia De
Beukelaer (2020), online sales have increased by 52% year on year and the number of
online shoppers by 8.8% since the coronavirus pandemic began.

3.1 Advantages of E-commerce

Advantages of e-commerce is that we can protect ourselves and communities

during this pandemic. As stated earlier, coronavirus can spread primarily through
droplets of saliva or discharge from the nose when an infected person coughs or
sneezes (WHO,2020). Hence, it is very important to practice social distancing with
one another to reduce risk of being infected.

By using e-commerce as a method of selling and purchasing goods, it is much

more safer as transactions are conducted online. This is because customers do not
need to go to physical stores such as shopping malls. Delivery of products can be send
directly to customers’ homes via courier company. For example, PosLaju, DHL or
GD Express (GDex).

Next, e-commerce is helping global economy during this unsteady time. There
are lot of retrenchment happening all around the world due to COVID-19. According
to New Straits Times (2020), many workers have been either retrenched or put on
unpaid leave to save cost. However, e-commerce industry is creating new economic
opportunities. According to Day One Staff (2020), Amazon announced that it will hire
175,000 new workers in response of rising customers’ demands.
 Last but not least, advantages of e-commerce is that it create opportunities for
retailers and brands to build loyalty and connect with customers during this extremely
stressful time. For example, retailers offer communication of comfort and support
such as letting their customers know about how they are handling the situation or
offer customers in worst-affected area an additional discounts or service such as free
delivery (Olivia De Beukelaer, 2020).

They will be remembered as brands that adapted to “new normal” and supported
them at the time of uncertainty. This is important because according to a report by
Capgemini Research Institute (2020), it is found that consumers appetite for online
shopping and convenience will continue to grow once the lockdown is eased.

3.2 Challenges for E-commerce During COVID-19

The COVID-19 outbreak is rising the demand for certain products, while
disrupting supply chains with transportation restrictions. This is because mostly of the
supplier of the immediate products for manufacturing company are from China.
Companies also have responsibilities to take care the health of their employees such
as the supply chain workers. According to a poll by the Institute of Supply Chain
Management, it is found that nearly 75% of companies have already reported supply
chain disruptions (Olivia De Beukelaer, 2020).

Next, not all customers are familiar with e-commerce in terms of online ordering,
method of payment and others. According to Sarah Assous (2020), 67 percent of
customers agreed that brands and retailers need to do more guideline on purchase
decision online and they are more prefer to visit physical store rather than using
e-commerce platform.

As customers are adapting to use the e-commerce platform to purchase products

during this pandemic, there are possibility that there will be peak in traffics when
using the website. For example, the website would not load or crashed. This would
affect customers’ experience and customers might choose to purchase products from
other brands and retailers.
 3.3 Solutions

There are ways to minimal the impact of supply chain disruptions such as brands
and retailers display the real time stocks level and pricing, let customers track their
own parcel, ensure products that are out of stock is marked correctly and notify
customers when it back in stock (Olivia De Beukelaer, 2020). This will increase
transparency and trust between retailers and customers. This is crucial because there
are lot of competitors in the e-commerce market right now hence retailers and brands
must step up their games in order to gain trust and loyalty from existing or new
customers.

Next, brands and retailers must engage and cater all problems that customers
might face during purchase decision on the e-commerce website. For example,
making guidelines showing steps to purchase and check out order for the first-time
customers. According to Sarah Assous (2020), this to ensure brands and retailers
deliver a stress-free shopping experience for customers.

Last but not least, retailers and brands must improve the performance of the
e-commerce website to avoid peak traffic due to high demands. According to Olivia
De Beukelaer (2020), using large and stable infrastructure to support the website,
“load balancing” and “lazy loading” are some of the ways to optimize e-commerce’s
site performance.

4.0 Current Issue

Air Asia Offers e-commerce Platform For Small Businesses Hit by COVID-19

Low-cost airline Air Asia offered its platform and infrastructure to all local
businesses affected by the COVID-19 pandemic through the Save our Shops (SOS)
campaign. Air Asia will be opening its OURSHOP e-commerce platforms to traders
and businesses to sell various range of products from the household items to beauty
items products as well as essential products like face masks and hand sanitizer. The
products will be delivered via the logistics arm of the airlines which is Teleport.

However, there will be charge for banking transaction 2 per cent of each
transactions made. The Group Chief Executive Officer Tan Sri Tony Fernandes said
Air Asia want to helps anyone who owns a business especially small business during
this tough time.

5.0 Conclusion

As a conclusion, the COVID-19 outbreak is a very challenging time for all and
has impacted various sector in the country including economy sector. According to
Marco Albani (2020), there is no returning to normal after COVID-19. However,
there is an opportunity within every crisis. E-commerce platform creates opportunity
for business that are affected to ensure continuity during this global pandemic. Hence,
businesses must adjust quickly to this “new normal”, stay connected and ensure good
relationship not only with customers, but vendors and suppliers as well.
 6.0 References

Webpages/ Websites:

[1] Andrew Bloomenthal. 2019. Electronic Commerce (e-commerce). Retrieved

from: https://www.investopedia.com/terms/e/ecommerce.asp

[2] Ashikul Hoque, Farzana Afrin, Mashrekha Anwar, Mohammad Waliul Hasanat.
2020. The Impact of Coronavirus (COVID-19) on E-Business in Malaysia.
Retrieved from:
https://www.researchgate.net/publication/340445932_The_Impact_of_Coronavirus_C
OVID-19_on_E-Business_in_Malaysia

[3] Johns Hopkins University & Medicine. 2020. Coronavirus. Resource Center.
Retrieved from: https://coronavirus.jhu.edu/map.html

[4] Marco Albani. 2020. There is no returning to normal after COVID-19. But there
is a path forward. Retrieved from:
https://www.weforum.org/agenda/2020/04/COVID-19-three-horizons-framework/

[5] Ministry of International Trade and Industry. 2020. FAQ on Movement Control
Order (MCO). Retrieved from:
https://www.miti.gov.my/miti/resources/FAQ_MITI_BIL_3.pdf

[6] Sarah Assous. 2020. COVID-19 is a Wake-Up Call for E-commerce Strategies.
Retrieved from:
https://www.mytotalretail.com/article/COVID-19-is-a-wake-up-call-for-e-commerce-
strategies/

[7] Scott Clarke. 2020. COVID-19 Solution: Direct-To-Consumer e-commerce

Capability for Consumer Products. Retrieved from:
https://www.publicissapient.com/insights/covid19_perspectives_on_the_coronavirus/
direct-to-consumer-ecommerce-consumer-products

[8] World Health Organization (WHO). 2020. Coronavirus. Retrieved from:

https://www.who.int/health-topics/coronavirus#tab=tab_1
Blog Post:
[1] Canada Post. 2020. Navigating Coronavirus (COVID-19): Key strategies for
e-commerce retailers. Retrieved from:
https://www.canadapost.ca/blogs/business/ecommerce/navigating-coronavirus-COVI
D-19-key-strategies-for-e-commerce-retailers/

[2] Day One Staff. 2020. Amazon has hired additional 175,000 people. Retrieved
from:
https://blog.aboutamazon.com/company-news/amazon-hiring-for-additional-75-000-j
obs

[3] Olivia De Beukelaer. 2020. B2B e-commerce and COVID-19: The Challenges,
Solutions and Opportunities. Retrieved from:
https://www.sana-commerce.com/blog/b2b-ecommerce-COVID-19-challenges-opport
unities/#6

[4] Tucker Schreiber. 2016. Proceed to Checkout: The Unexpected Story of How
E-commerce Started. Retrieved from:
https://www.shopify.my/blog/69521733-proceed-to-checkout-the-unexpected-story-of
-how-ecommerce-started

Newspaper articles:

[1] News Strait Times. 2020. 14-day Movement Control Order Begins Nationwide
on Wednesday. Retrieved from:
https://www.nst.com.my/news/nation/2020/03/575180/14-day-movement-control-ord
er-begins-nationwide-wednesday

[2] News Straits Times. 2020. Air Asia Offers E-commerce Platform for Small
Businesses Hit by COVID-19. Retrieved from:
https://www.nst.com.my/news/nation/2020/04/581349/airasia-offers-e-commerce-plat
form-small-businesses-hit-COVID-19