Increase in E-Commerce challenges the World’s Economies


The Story

E-Commerce has been sky-rocketing, forging its presence in the global economies. This increase in popularity can be attributed to the many benefits it affords consumers; including convenience, better prices, more variety, easy price comparisons, no crowds/queues, and privacy.

The market research firm eMarketer forecasted an 18% increase in U.S. e-commerce sales, rising to $709.8 billion for 2020. This can be attributed to Millennials, who make 60% of their purchases online. COVID-19 is also playing a major role, which has put the world’s economies under significant economic tests.

The new generation of shopping trends, coupled with a global pandemic restricting the freedom to shop in brick and mortar stores, make for a long-lasting impact on the way companies conduct their business. As thousands of stores close, large corporations invest significantly in developing their online presence to keep up with the brave new world.

Possible Commercial Implications

The commercial implications are wide-spread. Companies will continue to make significant changes to their business model and how they interact with consumers. This seems to include the closing of brick and mortar stores while increasing their online presence. The effects this has on the workforce are substantial, as running an online business requires significantly less personnel than having multiple different physical stores. The change will continue to increase the unemployment rate, adding to the economic challenges that states are facing.

Further commercial implications include the difficulty for start-ups to enter a market, as online platforms are dominated by household names. Search engine results are, to an extent, determined by companies who pay large sums of money to show up in search results. This makes it increasingly difficult for small companies to reach customers, limiting their ability to sell their products. This further creates commercial issues regarding the lack of competition, as there are significant barriers to entry into the e-commerce market.

Possible Legal Implications

The possible legal implications of an e-commerce-driven economy include the protection of trademarks and copyrights, as it is much easier for a fraudulent website to appear as a legitimate online store than it is for a fraudulent brick and mortar store. This will result in an increase in work for IP lawyers and litigators.

E-commerce makes it easier for individuals to sell their products without having a proper license and without incorporating a business. This creates legal issues surrounding taxes and the maintaining of high standards, ultimately creating work for tax and litigation lawyers. Ensuring that all business abide by the e-commerce transaction rules is also a legal issue that businesses will face, in turn creating work for regulators.

Questions for Individual Thinking:

  1. How can the labour force adapt to a virtual economy?

  2. How can a small start-up survive in a crowded internet populated by giants?

  3. Will search engines adapt a social media-styled ‘blue tick’ to signal genuine stores in fear of online fraud?

Malcolm Zoppi

Born in Switzerland, grew up in the Bahamas, studying in England, completed an Erasmus year in Denmark, and now living in Spain.

Malcolm prides himself on his internationality and ability to analyse current affairs from different perspectives.

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