The 21st century is digital or not at all. That’s how the current decade should have started, and 2020 is bringing, sadly not for the right reasons, an acceleration of digitization and businesses moving online, just as social interaction is slowly moving online. This series of articles will therefore explore, in the new global context, how the private sector is trying to fight both the healthcare crisis and, more importantly, the social and economic crisis. We will first present how companies or entrepreneurs have adapted to this situation and how some of them have adapted to remain relevant.

The analysis covers sectors as diverse as retail, culture, professions, education, creative industries, financial banking, and government institutions.

In the last few weeks, as a result of the Covid-19 pandemic, we have been witnessing a forced and, we hope, at least in a few areas, definitive digitalization, with no return to the classic, conventional mechanisms of communication or consumer relations. The relatively timid (in terms of the size and potential of commercial, business online) but growing attempts to at least move commerce online, accentuated in recent years by the growing demand for this sales channel, are now turning into a sometimes desperate, but, at the same time, understandable rush on the part of several businesses to remove the physical barriers imposed by the current situation and to gain at least a percentage, if not more, of the consumers affected by the restrictions on their freedom of movement. 30% represents the growth of online commerce in the last month and this trend is expected to continue at least in the next quarter.

According to RAOS (Romanian Association of Online Shops) estimates, the e-commerce sector exceeded the €4.3 billion thresholds at the end of 2019, 20-22% more than in 2018. Initial estimates for 2020 showed that the value of online shopping will exceed 5 billion euros, but in the current situation, this value will likely be even higher. With only 23% of the modern retail space in Romania open, it is clear that online platforms will grow exponentially because the demand is there.

We already have some best practice cases in the industry, such as eMAG.ro, the platform that paved the way for online commerce a few years ago.

In the current context, eMAG’s position has been strengthened, thanks to the massive transition to online shopping, but also thanks to the awareness that the platform has gained and the partnership with fast courier companies, in particular with the home company, Sameday. The latter also owns the locker division, Easybox, where social interaction is kept to a minimum. Thus, eMAG reports over 30% growth in direct sales and 40% on the marketplace platform. Furthermore, eMAG announces the launch of a delivery service for basic products, especially food, in the immediate future, which will be operational initially in 6 cities. Also part of the eMAG group is fashion retailer Fashion Days, which recently has been hit hard by falling sales due to a lack of interest in products other than necessities. Fashion Days is thus opening its platform to offline retailers as a first step in the launch of its marketplace service. Manufacturers and retailers are provided with the technology and marketplace platform, access to customers in three countries (Romania, Bulgaria, and Hungary), and the logistics infrastructure, plus promotion and sales services.

Another example that comes strongly in the background is the elefant.ro platform, which has just accelerated the launch of its marketplace solution for partners and companies that want to sell online, offering them logistics services as well.

However, the repositioning of some retailers that mainly specialize in food and non-food products on this channel is also worth mentioning. According to a study by industrial real estate agency Dumwell, more than half of the retail chains in Romania have an online delivery platform, with the possibility of delivery or pick-up from specific points, and they are expanding thanks to the record demand registered recently. Regional distribution centers are open and operational, so that retailers’ activity is not restricted but, on the contrary, expanded online.

Hence, while physical stores still exist and are open, some retailers have developed their virtual stores to meet demand and to consolidate or complete their market share.

The best example is Mega Image, which has increased its own online sales platform; in partnership with eMAG.ro, it opened the first 100% online supermarket, with delivery also in the country, in 2015, a move that, these days, has proved to be a good omen considering the significant increase in orders (eMAG Supermarket). The same goes for Carrefour, the first retailer to open its online platform and which, in collaboration with Bringo, has increased its order volume 10-fold in the last 3 weeks.

In the medium term, it is expected that this market share gained from offline commerce will continue when the economy gets back to normal, especially for long-established retailers and those who have invested during this period in consolidating and expanding their existing platforms.

Andreea Brutaru

Account Manager Minio Studio