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Impact of Coronavirus Lockdown on Online Business and Services

It is safe to say that covid-19 has affected everybody personally, whether positively or negatively. There have been many changes for people running online businesses due to the effect of covid-19, and everyone has to cope with both its positive and negative impact. The changes in people’s way of life (caused by the pandemic) are also affecting businesses online. Some companies hardly get anyone to look at them, while other businesses find it hard to deal with the explosion in demand. The online business sector has sure had its fair share of COVID-19 effects. In this article, we will be looking at some of the impacts of covid-19 on online businesses.

Changing Customer Behavior

As the coronavirus has affected a lifestyle change, people have had to adapt their way of living, which has affected how they purchase products online. For many B2C companies selling online, there has been a surge in the number of people shopping online. The closure of shopping malls and the lockdown restrictions coupled with excess time on people’s hands means that people have had to shop online. This has favored many online businesses tremendously as their sales volume increased massively. Some of the firms that enjoyed increased patronage are online food and beverage businesses, accessories and apparel sellers, home and garden, and toys and games.

Online shopping became a global phenomenon. Many people are buying their groceries online and have continued to buy online even after supermarkets started to open again. The online businesses have  had to look for ways to cope with the sudden burst of demand. Amazon, for instance, has to make its employees work extra hours and increase their salaries while employing 100,000 more staff all in a bid to deal with the rising demand.

One other area that experienced massive improvement is the use of apps for grocery shopping. These apps saw a rapid rise in their number of downloads during this period. For instance, the Walmart app experienced an increase in downloads of up to 160%.

Direct Impact on Small Businesses

Unfortunately, not all businesses enjoyed a positive covid-19 impact. The impact of covid-19 on many small businesses has been devastating, to say the least, especially for B2B companies dealing with non-essential products. These small businesses selling equipment and non-essential products have seen their sales cut down drastically due to the pandemic, which has led to significant revenue loss for them.

It is also the same for those small businesses in the service industry. Many of these businesses did not just get very low to no sales. Some of their customers also changed their purchasing decisions and postponed or canceled existing orders. For instance, furniture supplier businesses would have their orders canceled because there’s no reason to refurbish a business with tables and chairs when it is closed. Businesses like these have had to think of new strategies to help them survive as they experienced a sudden increase in customer acquisition costs.

Related: How Businesses are Staying Afloat During the Pandemic

Negative Outlook for Online Retailers for the Year

The outbreak of covid-19 in 2020, and the lockdown that followed, led to a massive loss of revenue for many online retailers due to the reduction in sales. While some retailers enjoyed increased sales, many others saw their sales and revenue drop during the period, which has defined their outlook for 2020.

A major problem that the covid-19 lockdown created for online retailers was how it was able to affect both the demand for products and the supply chain at the same time. It didn’t just create uncertainty in demand for products; it also created uncertainty in the supply chains too.

The Growth of Online Gaming

The online gaming market was a narrow market that was mainly dominated by young people. However, it has grown and is now very popular. The fact that people had to stay indoors for weeks and months due to the lockdown means that they have to find ways to keep themselves busy and entertained, and playing video games fit the bill perfectly. So, online gaming services and businesses benefited a lot from the covid-19 enforced lockdown, but it’s not just them. Another set of companies that benefited are downloadable video game retailers, as they saw their sales and subscriptions spike within a few weeks. A typical example is Steam, a popular platform for PC gaming, seeing their highest-ever users during the lockdown and getting traffic of more than 20 million players.

Increased Demand for Streaming Services

Streaming services are another set of businesses that grew as a result of the lockdown. The need to entertain themselves led people to stream movies and videos online. This led to the growth of many streaming services, with many of them getting more subscribers and increasing revenues. At some point, Netflix had to reduce its picture quality by 25% to increase its bandwidth capacity. For instance, the growth of streaming services means that in the US, the estimated increase in new subscribers for Netflix is now expected to double. If they were expecting a gain of 2% before the pandemic, it is currently 4%. It isn’t just Netflix benefitting from this. There are many other streaming services like Amazon Prime Video, Hulu, etc. as well.

The Online Travel Industry is still Doing Fine

This is one industry that everyone expects to be hit by the impact of covid-19 because of the travel restrictions. However, they have found their way around this and seem to be doing just fine. While people can’t travel at the moment, they are still willing to research travel locations and book trips for next year’s summer. This will allow them to receive deposits ahead of that and is helping them deal with their cash flow problems.

Online Order Delivery Delays

There were many problems that covid-19 created, and one of those was in the supply chain problem. While many retailers had good sales, many others didn’t. However, one thing was clear; no one was willing to risk exposure. Importation was largely halted because of travel restrictions and factory shutdowns in China and other parts of the world. So, the supply chain suffered significantly, which led to many product delays, and some businesses also had inventory shortages.

Increase in the Sale of Health Products

For online businesses that were into the sale of health products, this period was when they made the most sales, just as you would expect. While there was a global increase in online shoppers, another global thing was buyers seeking out health products, most especially hand sanitizers, face masks, and disinfectants.


The coronavirus infected millions of people worldwide and put a momentary pause on most of our lives. However, it affected many businesses in different ways. While some companies still lament the impact of covid-19 on their revenues and cash flow, other companies benefited greatly from it.

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