Coronavirus lockdowns give major boost to global e-commerce

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Updated 31 August 2020

Coronavirus lockdowns give major boost to global e-commerce

  • The benefits are being reaped by those companies which were already carrying out a sizeable chunk of their activities online

PARIS: While large traditional retailers announce big layoffs because of the pandemic, sometimes shedding thousands of staff, coronavirus lockdowns have in contrast given e-commerce a major boost.

Recent data shows a shift to shopping online — according to Kantar consulting group, international e-commerce grew 41 percent in only three months compared with 22 percent growth for 2020 as a whole to date, as the pandemic “transformed” retail habits.

The trend was brought into sharp relief on August 18, when British high street mainstay Marks & Spencer announced it was culling 7,000 staff.

Hours later, in contrast, online behemoth Amazon said it was hiring 3,500 in the United States.

The M&S slimdown is only one part of the picture in the UK, with 2,500 more job losses announced at department store Debenhams, which in April entered administration for the second time in a year. Hundreds more jobs are also to be lost at other well known British high street chains.

By contrast, Britain’s largest supermarket chain Tesco placed a sizeable feather in its online cap by saying it was creating 16,000 permanent jobs to deal with strong growth in its online activities.

“It is very clear that the digitization of commerce, (even) if in place for a long time, is accelerating enormously,” said Herve Gilg, managing director and distribution specialist at Alvarez & Marsal corporate transformation services.

The benefits are being reaped by those companies which were already carrying out a sizeable chunk of their activities online.

That troupe is led by Amazon, which doubled its net profits in the second half of this virus-challenged year.

Following was Germany’s fashion and lifestyle e-commerce heavyweight Zalando, which saw its active customer base rise 20 percent in first half 2020 to 34 million.

US giant Walmart, although not an online “pure player,” has also shifted in that direction to benefit from the upswing in virtual commerce in the US and its second quarter results soared past estimates on an e-sales jump of 97 percent.

In France, the United Kingdom, Spain and China, the average market share of e-commerce went from 8.8 percent of value (in 2019) to 12.4 percent in second quarter 2020, said Kantar.

It added that in China, online shopping already amounts to “a quarter of expenditure on mass consumer products.”

The trend was already under way before COVID-19 began to batter the global economy.

But the brutal falloff in out-of-home spending has had “a major knock-on effect for nonfood commerce dependent on physical sale points,” Gilg said.


Taps and reservoirs run dry as Moroccan drought hits farmers

Updated 22 October 2020

Taps and reservoirs run dry as Moroccan drought hits farmers

  • The problems caused by increasingly erratic rainfall and the depletion of groundwater are growing every year in Morocco

RABAT: Two years of drought have drained reservoirs in southern Morocco, threatening crops the region relies on and leading to nightly cuts in tap water for an area that is home to a million people.

In a country that relies on farming for two jobs in five and 14 percent of its gross domestic product (GDP), the problems caused by increasingly erratic rainfall and the depletion of groundwater are growing every year.

In the rich citrus plantations of El-Guerdan, stretching eastward from the southern city of Agadir, more than half of farmers rely on two dams in the mountains of Aoulouz, 126 km away, to irrigate their trees.

However, that water has been diverted to the tourist hub of Agadir, where mains water has been cut to residential areas every night since Oct. 3 to ensure taps in households did not run entirely dry.

“The priority should go to drinking water,” Agriculture Minister Aziz Akhannouch said in parliament last week.

In El-Guerdan, Youssef Jebha’s crop of clementine oranges has been compromised by reduced water supply, he said, which affects both the quality of fruit and the size of the harvest.

“The available ground water is barely enough to keep the trees alive,” said Jebha, who is head of a regional farmers’ association.

“Saving Agadir should not be at the expense of El-Guerdan farmers,” he added, speaking by phone.

‘We hope for rain’

El-Guerdan is not alone in facing drought. Morocco’s harvest of cereals this year was less than half that of 2019, meaning hundreds of millions of dollars of extra import costs.

Despite lower production, Moroccan exports of fresh produce have risen this year by 8 percent. 

Critics of the government’s agricultural policy say such sales are tantamount to exporting water itself, given the crops use up so many resources.

A report by Morocco’s social and environmental council, an official advisory body, warned that four-fifths of the country’s water resources could vanish over the next 25 years.

It also warned of the risks to social peace due to water scarcity. In 2017, 23 people were arrested after protests over water shortages in the southeastern city of Zagora.

In January the government said it would spend $12 billion on boosting water supply over the next seven years by building new dams and desalination plants.

One $480 million plant, with a daily capacity of 400,000 cubic meters, is expected to start pumping in March, with the water divided between residential areas and farms.

Until then, “We hope for rain,” the agriculture minister said in parliament.

In El-Guerdan, the farmers are digging for water. A new well costs $20,000-30,000. However, “there is no guarantee water can be found due to the depletion of ground reserves,” said Ahmed Bounaama, another farmer.