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How the pandemic has shifted the consumer behavior progressed digitally

Delima Meylynda

The Jakarta Post

Jakarta  /  Mon, April 5, 2021  /  02:34 pm
How the pandemic has shifted the consumer behavior progressed digitally

While conventional shopping is still an option, people are flocking to online shopping because of the convenience. (Courtesy of ANTARNEWS.com/.)

It has been more than a year since the government declared COVID-19 a public health emergency, nearly a year since the first large-scale social restrictions were imposed in Jakarta and for most of us, almost just as long since nonessential workers started working from home (WFH).

Stores everywhere are also closed now. No more late-night chats at coffee shops and no more leisurely strolls at the mall in compliance with the health protocols that are keeping you safe from the virus. And no more going out of the house unless it’s urgent, so this cuts out daily errands like shopping for groceries.

Amid all this and more, where should you turn to in order to fulfill your shopping needs? Online marketplaces, of course.

Take Tokopedia, for example, the e-commerce platform has become a household name in Indonesia and a house for over 10 million merchants to date, of which 86.5 percent are first-time entrepreneurs. In addition, 76.4 percent of business owners said Tokopedia gave them flexibility in managing their businesses, hence the rush to get onboard.

Business has been good for both the platform and its merchants, with the majority seeing an increase in sales volume: 7 out of 10 businesses on the platform reported experiencing a median increase in sales volume of 133 percent.

The figure relied heavily on the digital shift in consumer behavior, with a sharp 71 percent rise in monthly expenditure on online shopping during the health emergency. Not only that, Tokopedia recorded an increase of more than 10 million new users since January 2020 to total more than 100 million users today.

According to United Nations Conference on Trade and Development (UNCTAD) Secretary-General Mukhisa Kituyi, the pandemic has accelerated the global shift toward a more digital world.

“The changes we make now will have lasting effects as the world economy begins to recover,” Kituyi said in an article published on the UNCTAD website.

We had many other alternatives besides online shopping platforms and delivery services before COVID-19. Office breaks could be used for some window shopping or eating out at a local diner or warung. This is not the norm now.

After seven to eight hours of WFH, going out just to get some groceries for that day’s meal would feel like a hassle these days. But there’s no need to fret, because you can simply shop online.

What if you suddenly craved some sushi for dinner, but the restaurant closes at 7 p.m. and you won’t finish work until 8 p.m.? Well, it’s also available online and through food delivery mobile apps.

There’s always a silver lining to life’s problems and digital technology has made everything much simpler for us.

But that wasn’t always the case. When the pandemic arrived in Indonesia, some people became paranoid that they won’t be able to go outside the house again, which prompted panic buying.

The buying frenzy is no longer happening, according to “Online Shopping Motives during the COVID-19 Pandemic—Lessons from the Crisis”, a study led by Julia Koch of Muenster University’s Center for Management and published in a special issue on consumer behavior of online journal Sustainability 2020. In it, the authors state: “However, the ongoing uncertainty evoked by the pandemic may lead to transformative consumption patterns in the long term. Consumers hesitate to purchase goods at stationary retailers due to government restrictions and fears of infection.”

Furthermore, the study distinguished two “purchase intentions” among consumers regarding e-commerce, “utilitarian” and “hedonic”, with the former motivated by “usefulness of a behavior” and the latter by “entertainment and enjoyment experienced from engaging in a behavior.”

“Utilitarian values include, for example, time savings, judgments of convenience, and economic aspects in the context of online shopping. Hedonic values focus on experiential benefits such as experiencing enjoyment when shopping online,” the authors write.

To indulge these purchase intentions, many e-commerce platforms offered countless promotions or discounts to attract more consumers and scale up sales revenues.

These sales programs proved efficient, as digital payments are on the rise according to the University of Indonesia’s Institute for Economic and Social Research (LPEM FEB UI). E-wallets and digital banking were the two most popular financial products among new Tokopedia users during the pandemic. More specifically, the LPEM FEB UI study found that 56.7 percent of online shoppers used virtual accounts while 56.6 percent used e-wallets.

As attractive as the sales promotion campaigns seemed to be for many consumer segments, senior economist Aviliani at the Institute for Development of Economics and Finance (Indef) said that consumer behavior changed primarily in the middle to upper classes.

“They’re not affected by the economic situation since they have money [from their jobs]. They save up some money and can still participate regularly in online shopping,” Aviliani told The Jakarta Post in a phone interview on March 18. “For lower class workers, they’re usually active in purchasing food,” she added.

Aviliani mentioned that physical exercises, such as cycling and jogging, were the latest trend.

“No more parties [or events], so we don’t have to shop for fancy clothes and shoes anymore. People tend to shop for their hobbies and interests instead,” she noted.

Besides personal health and wellness products and foods, Tokopedia found that many users were actively purchasing goods for their hobbies and interests, particularly sports. Reading, gardening and painting follow close behind, with the most popular shopping items being fitness equipment, self-improvement books, and gardening and painting tools and materials.

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