Impact of COVID-19 on eCommerce and Web Hosting Industry

In 2018-19, experts predicted the directions of growth, changes in the scope of the industries, and most importantly, the emerging trends in consumer behaviour.

Brands created marketing strategies based on these well-calculated predictions that were the results of data and trends. Global investors invested billions of dollars in different industries hoping that the year 2020 would be the year of great ROI. 

Everything was going more or less according to the plan until China’s WHO office reported the first case of an unknown virus on Tuesday, 31^st December 2019.

Within the five months of the first officially registered case of coronavirus (COVID-19), the global pandemic has shaken the world upside down, expected trends and predictions have gone out of the window.

The global lockdown affected not only the mental health of students and office workers but also resulted in a loss of jobs and negatively impacted the GDPs of every country. Among the global chaos and uncertainty, few industries flourished and achieved their growth predictions. eCommerce and Web Hosting (PHP Cloud Hosting and Managed or Dedicated Hosting) are among the fortunate industries which are doing well despite the prolonged lockdown and ongoing pandemic.

The growing eCommerce industry is one of the major reasons why the web hosting industry is doing well. Now, more than ever, brands are focused on quality online presence and ensure flawless eCommerce experience. Delivering a great UX and UI requires a powerful and extensible hosting infrastructure.

COVID-19 and eCommerce Industry

The COVID-19 pandemic is the defining event of the year 2020 and the implications are being felt as businesses remain closed because of the lockdown. Taking businesses online is the only option to sustain operations. In many cases, the process of transitioning businesses to the online model is really easy as modern eCommerce platforms very effectively mimic the processes of offline businesses. With that said, be careful for online fraudsters that are more present than ever because of COVID-19. There has been a spike of over 20% of online fraud during COVID.  There are a number of precautions an eCommerce business can take to prevent fraud such as staying PCI compliant, encrypting your connection and putting difficult password restrictions on all accounts being created.

Changing Consumer Behavior

Along with the new wave of online trends, one of the most significant trends is the changes in the behaviour (what they buy, how, and when) of online buyers. The focus has moved to bulk-buying (because of unsure conditions) and brands need to accommodate this change in their online commerce industry. 

eCommerce fueling the Web Hosting Industry

In 2018, the web hosting industry was predicted to grow at 13% CAGR and one of the key drivers of the market growth is the growing eCommerce industry. The market is expected to add $72.79b by 2023. With the current global conditions, the industry seems to be reaching the 2023 numbers much earlier because of the induction of local brands and small businesses focusing solely on the online business.

Businesses that were operating out of small product pages on Facebook or Instagram now aim to organize themselves better in order to compete with thousands of similar competitors. It goes without saying that these emerging businesses will be the new face of eCommerce and will bring in new customers for the hosting industry.

Competition Within the Web Hosting Industry  

Web hosting industry reached the saturation point in 2019 when we have big names in shared hosting (GoDaddy, NameCheap, Hostgator), cloud IaaS (DigitalOcean, AWS, and Google Compute Engine) and many providers with several hybrid infrastructure models. Add thousands of their resellers and affiliate sellers and you can imagine the density of offers and choice. The only thing that distinguishes a web hosting brand from the rest is the quality of customer support and flexibility of operations.

The competition is by no means over as brands transitioning to online commerce continue to fuel the web hosting industry. This is a positive sign for eCommerce businesses as well, because, in order to get more business, web hosting brands have to increase their quality of services and deliver them at very competitive pricing.

What to Expect in the Rest of 2020?  

To be fair, this is a difficult question to answer because COVID-19 conditions are changing very quickly. China has removed the lockdown in Wuhan, and counties like New Zealand and Australia have managed to contain the spread of the virus by implementing early lockdown strategies. As a result, these countries have been able to resume day-to-day business. However, the global business centres, the USA and Europe are still fighting hard and trying to contain the epidemic ASAP.

Ecommerce and web hosting industries are going to flourish and grow rapidly in 2020 and onwards. There is no denying the fact that the eCommerce industry has become more competitive because of the influx of new brands. Add the changes in consumer psychology to the mix and you can easily imagine the stiff competition that would benefit both the consumers and the overall eCommerce industry.

For eCommerce businesses, this is a time to experiment with new strategies in order to adapt to the change and tweak operations to capture a larger piece of the pie.

Conclusion

eCommerce and web hosting industries are rapidly evolving in the ongoing COVID-19 crisis and it is too early to fully understand the magnitude of the impact. However, experts are certain about fast track changes in both industries. 

For entrepreneurs, this is a good time to get into the eCommerce arena with new ideas and experiments. What worked for the industry just six months ago is simply not valid anymore. With the right strategy, the eCommerce industry can be disrupted all over again.

Let’s keep a positive stance on the overall global conditions forced by the virus by allowing the businesses to grow along with the change.

What do you think is the biggest opportunity available for vendors in both industries? Let us know in the comments below. 

Photo by Austin Distel on Unsplash