The document discusses the impact of COVID-19 on online commerce and payments. It finds that online shopping surged during the early months of the pandemic as consumers avoided physical stores. However, cross-border e-commerce declined as international logistics were disrupted. While online payments grew, total payment transaction growth forecasts were revised downward. Specific sectors like fashion retail face sales declines, though online fares better than physical stores.

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1. COVID-19 Impact on B2C E-Commerce 03 - 04
2. COVID-19 Impact on Online Payments 05 - 06
3. COVID-19 Impact on Selected Online Verticals 07 - 08
4. COVID-19 Impact Data Highlights 09 - 12

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Surge in online shopping during the pandemic; cross-border
E-Commerce challenged by COVID-19.
Newsflash: COVID-19 Impact on B2C E-Commerce, April 2-8, 2020
A Double-Digit Share of Consumers Shopping Online More Due To The Pandemic
➢ A survey conducted in three European countries between March 24 and 30, 2020, revealed that 19% of online shoppers made more
purchases over the Internet in the previous two weeks as the outbreak continued, and 25% planned to buy more online in April. The
number of digital purchases made by the respondents increased by +6%, driven by food and groceries (+97%), health products and
food (+47%) and take away food (+32%). At the same time, purchases of tickets were down by -75% and travel and transportation
bookings by -67%. Also in the U.S., one in four consumers surveyed in mid-March reported making more online purchases.
Sources: Afterpay, Shopkick
Cross-Border E-Commerce Put To Test By The Pandemic, China to Take Revival Measures
➢ The disruption of international logistics and shifts in consumer demand due to COVID-19 has affected cross-border E-Commerce.
China, which the world’s largest cross-border digital commerce player, was the first to be hit by the pandemic and go on a lockdown,
with major consequences for international online shopping. Web traffic to China-based cross-border shopping platform
AliExpress.com of the Alibaba Group declined from 600 million visits in December 2019 to 525 million in January 2020 and less than
400 million in February and March 2020. A March 2020 survey conducted in Brazil revealed that 20% of Internet users stopped
buying goods online from China amid the COVID-19, previously a top cross-border destination for shoppers in this country.
➢ Nevertheless, in the first two months of 2020, cross-border E-Commerce imports to and exports from China increased by +37% to
CNY 17.4 billion (USD 2.5 billion), according to official statistics. While March data is not yet available, the figures could be different,
as countries in Europe and North America were hit by the coronavirus outbreak and international logistics capacities were reduced or
came to a halt. As a result, costs of air charters shot up, which could have an effect on delivery times and costs.
➢ With the objective of assisting international online trade recover, China announced plans to open 46 additional integrated pilot zones
for international E-Commerce trade, in addition to 59 existing ones. The zones offer special regulations for cross-border online
purchases, such as tax exemption. The government also encourages businesses to build and share new warehouses.
Sources: Similarweb, America Economia, South China Morning Post, Business Times, Ministry of Commerce

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1. COVID-19 Impact on B2C E-Commerce 03 - 04
2. COVID-19 Impact on Online Payments 05 - 06
3. COVID-19 Impact on Selected Online Verticals 07 - 08
4. COVID-19 Impact Data Highlights 09 - 12

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Total payment transaction growth is expected to slow down through
2023 in China and the UK due to the coronavirus.
Newsflash: COVID-19 Impact on Online Payments, April 2-8, 2020
Total Payment Transaction Growth Forecasts Revised Down in the UK and China Due to COVID-19
➢ The growth forecast for total payment transactions in the UK and China has been revised downward to reflect the expected slow-
down of growth in 2020 due to COVID-19 and a potential recession of the world economy in the years to follow. The value of total
payment transactions in the UK is now expected to increase at CAGR of +2% between 2019 and 2023, down from the previous
projection of +3.8%. For card payments, the growth rate was reduced from +5% to +3%. Cash payments are to decline at an even
faster rate than previously expected, with CAGR of -4%, compared to CAGR of -3.3% forecasted previously. A similar trend is
witnessed in other countries worldwide. The forecast for China’s payment transactions growth was reduced from CAGR of +16.5% to
+13.6% through 2023. Cash transactions are to decline at CAGR of -5%, an acceleration from -4.3% forecasted prior to the COVID-
19 outbreak, while card payments are expected to increase at +10% CAGR, down from +11.8% in the original projection.
➢ The acceleration of cash decline could trigger a widening gap in access to payment instruments between consumers with and
without a bank account. Scientific studies indicate that cash is no likelier to be a virus transmitter than PIN pads or card terminals, but
the paper notes are seeing a decline in usage amid the pandemic, accelerating the shift to digital and contactless payment.
Sources: GlobalData, BIS
Online Payment Transactions Maintain Growth Amid The Pandemic
➢ Online payments are expected to be more resilient to the effects of COVID-19 and even receive a boost from an uptake in online
shopping transactions. Digital payment solutions such as PayPal, Visa Checkout and Masterpass are well positioned to reap the
benefits. However, the decline in cross-border transaction activity could have an impact on the digital payments business. PayPal
expects a one percentage point decline in y-o-y revenue growth due to the negative impact of COVID-19 on cross-border shopping.
Sources: GlobalData, Seeking Alpha
Mobile Payments Resume Growth in China Post-COVID-19
➢ The adoption of contactless payments may be boosted by the pandemic outbreak in Europe and the USA, but in China, which has
the world’s highest proximity mobile payment penetration, mobile payments were negatively impacted by COVID-19. The main driver
of the rapid growth of mobile payments in China over the past several years has been QR-based payment at offline stores. The
volume of these transactions was negatively impacted by the coronavirus outbreak and the resulting lockdown and store closures in
China. WeChat Pay, one of the leading mobile payment solutions in China, reported a decline in activity during the Lunar New Year
holidays as the pandemic broke out, but resumed growth in March.
Sources: China Morning Post, TechWire Asia

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1. COVID-19 Impact on B2C E-Commerce 03 - 04
2. COVID-19 Impact on Online Payments 05 - 06
3. COVID-19 Impact on Selected Online Verticals 07 - 08
4. COVID-19 Impact Data Highlights 09 - 12

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Global fashion sales projected to decline despite the online channel
doing better than brick-and-mortar retail during the coronavirus.
Newsflash: COVID-19 Impact on Selected Online Verticals, April 2 – 8, 2020
Fashion Retail Sales To Contract Due To The Coronavirus Outbreak, Outlook For Online Is Also Challenging
➢ The fashion industry has been hit hard by the pandemic. Clothing retailers were forced to close down brick-and-mortar stores, and
many of them also either temporarily closed or reduced online operation. For the full year 2020, global apparel and footwear sales
are expected to fall by between -27% and -30% versus 2019. The luxury segment is to suffer even more, with a -35% to -39% decline
in revenues. The growth could resume in 2021, with +2% to +4% for the apparel and footwear and +1% to +4% for luxury goods.
➢ Online sales of fashion stand stronger than in-store channels, but surveys of U.S. and European consumers indicate that only 18% of
them plan to increase online spending on fashion in April 2020, compared to 44% who plan a decrease. These figures are similar to
the share of surveyed consumers planning to increase (14%) or decrease (49%) their spending in the offline channel.
➢ Quarterly earnings recently published by H&M exemplify these trends. The company reported a +5% increase in Q1 local currency
sales, but a -46% decrease for the month of March following the outbreak of the pandemic in Europe and the U.S. This is despite
online sales being up by +17% in March, compared to +48% in the first quarter. In Q2, the company expects to see losses. Due to
COVID-19, H&M temporarily closed 3,778 out of its 5,065 retail stores worldwide, but kept 47 out of its 51 online shops running.
Sources: McKinsey & Company/Business of Fashion, Retail Gazette, Internet Retailing
Online Travel Companies Valuation Drops; Airbnb Raises Investment
➢ The decline of the global travel industry due to COVID-19 caused the stocks of Booking Holdings and Expedia Group, the largest
U.S.-based online travel agencies (OTAs), to fall by around -17% and -40%, respectively, in March 2020. The valuation of Airbnb,
which has not yet gone public, also fell, from USD 31 billion in 2017 to approximately USD 26 billion in March 2020. In early April, the
company raised USD 1 billion from investors including Silver Lake and Sixth Street Partners. Airbnb’s initial plans to go public in
2020 remain uncertain. In Q1 2020, the number of Airbnb bookings in major cities worldwide declined sharply. The company
changed its cancellation policy, offering guests full refunds for their bookings in the period from mid-March to end of May. In early
April, it also announced a relief plan for hosts, setting up a USD 250 million fund. Hosts are eligible to receive 25% of their normal
cancellation rate from this fund if a booking was cancelled due to the coronavirus. In addition, a separate USD 10 million fund was
announced to support superhosts.
Sources: CNBC, Financial Times

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1. COVID-19 Impact on B2C E-Commerce 03 - 04
2. COVID-19 Impact on Online Payments 05 - 06
3. COVID-19 Impact on Selected Online Verticals 07 - 08
4. COVID-19 Impact Data Highlights 09 - 12

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14%
20%
22%
53%
56%
58%
33%
24%
20%
0% 20% 40% 60% 80% 100%
Norway
Neherlands
Germany
More Same Less
in % of Online Shoppers
Around one in five online shoppers in Germany and the Netherlands
shopped more online amid the COVID-19 outbreak in March 2020.
Europe: Breakdown of The Perceived Change in Online Shopping in The Past 2 Weeks, in % of Online
Shoppers, by Germany, The Netherlands & Norway, W/C March 23, 2020
Survey: based on a survey of 3,345 consumers in The Netherlands (1,111), Germany (1,178) and Norway (1,056), conducted between March 24 and 30, 2020; all respondents
were aged 18+ and had made at least one online purchase in the previous 12 months
Source: Afterpay, Published April 2 2020

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14%
20%
32%
47%
97%
0% 25% 50% 75% 100%
Home Décor / Furniture
Hardware
Take Away Food
Health / Health Food
Food / Groceries
Percentage Increase of Online Purchases Percentage Decrease of Online Purchases
Online purchases of food/groceries in 3 European markets were up by
+97% in mid-March 2020, while ticket purchases were down by -75%.
Europe: Top 5 Product Categories by Increased and Decreased Number of Online Purchases As Made by
Online Shoppers in Germany, The Netherlands and Norway in The Previous 2 Weeks, by in % Change, W/C
March 23, 2020
6%
6%
11%
67%
75%
0% 25% 50% 75% 100%
Sporting
Goods
Electronic
s /
Telecom
Fashion
Travel /
Transport
Tickets
Increase in Online Purchases Decrease in Online Purchases
Note: the change is indicated in percentage compared to the previous period
Survey: based on a survey of 3,345 consumers in The Netherlands (1,111), Germany (1,178) and Norway (1,056), conducted between March 24 and 30, 2020; all respondents
were aged 18+ and had made at least one online purchase in the previous 12 months
Source: Afterpay, Published April 2 2020

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27%
33%
38%
47%
53%
0% 25% 50% 75% 100%
Can't Leave Home
Stores Out of Stock
Stores Closing
Convenient
Avoid People
in % of Online Shoppers Who
Shopped Online More
in % of Online Shoppers Who
Shopped Online Less
Avoiding people (53%) was the main motivation to shop online more
during the pandemic, according to European consumers in March 2020.
Europe: Reasons For Shopping Online More and For Shopping Online Less in the Past 2 Weeks, in % of
Online Shoppers in Germany, The Netherlands and Norway, W/C March 23, 2020
18%
19%
22%
29%
31%
0% 25% 50% 75% 100%
Virus on
Package
Supporting
Local Stores
Earning Less
Consume
Less
Spend Less
Reasons for Shopping Online More Reasons for Shopping Online Less
Survey: based on a survey of 3,345 consumers in The Netherlands (1,111), Germany (1,178) and Norway (1,056), conducted between March 24 and 30, 2020; all respondents
were aged 18+ and had made at least one online purchase in the previous 12 months
Source: Afterpay, Published April 2 2020

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