To what extent will the coronavirus pandemic change our lives in the long term? This question has been the subject of intense debate across the widest sectors of society for weeks. It has been racking the brains of politicians and businesses as much as the media, science and of course private individuals. While it is not yet possible to give a definitive answer, what is becoming clear is that the virus has accelerated much radical change. Among the sectors to which the disruption is delivering a significant boost is commerce. Abiding by the global "Stay at home" message, during the lockdown many consumers have restricted their purchases in bricks-and-mortar shops to the bare minimum. This is all the more so because shops which do not offer any essential products have had to close. At the same time, online businesses have been absolutely run off their feet with orders. Switzerland's leading e-commerce platform, digitec.ch, has since had to deal with bottlenecks. Customers of the global industry colossus, amazon.com, have also experienced delays in delivery.
The share of online business in total retail trade is still relatively low. In February, the Swiss mail order trade association (VSV ASVAD) together with Swiss Post and the German consumer research firm GfK published an interesting survey on this subject. It revealed that the total volume of Swiss retail trade in 2019 stood at CHFbn 91.6, of which the online segment accounted for 9.1%. While retail as a whole has been more or less flatlining for years, the e-commerce sector is growing strongly. In 2019, Swiss consumer spending online breached the sound barrier of CHFbn 10 (see graph). A good 80% of these purchases were made within Switzerland, i.e. on .ch domains. This ties in with the fact that last year Digitec/Galaxus was the first Swiss company to post online sales of more than CHFbn 1. View more information on investment solutions on the topic “The Corona economy: profiting from the new world”.
It is particularly articles from the non-food sector that more and more consumers are buying digitally. Here the share of total Swiss retail trade is already just under 17%. Adding home electronics, the proportion even rises to more than one third. In consequence, it was the largest segment of Swiss online trading last year with a volume of CHFbn 2.6. For IT products and office supplies, almost every second franc is now being spent on the internet. The home office movement associated with the lockdown looks set to have reinforced this trend. The same applies for the still comparatively small food sector. As a result of coronavirus, the experts anticipate accelerated growth in food online delivery. Overall they see growth rates in Swiss online business of between 8% and 10% a year in the future.
This forecast should be music to the ears not least of the logistics sector. In 2019 a total of 55 million packages were shipped in the Swiss retail trade. The pace of deliveries is picking up: 60% of all packages last year were labelled "Priority". That means the proportion of this delivery option has almost tripled since 2013 (see graph). Online trading also brings opportunities for the financial industry, since in many cases internet orders are being paid for online. Digital payment was on the up even before the crisis. In short, a raft of interesting listed companies are positioned along the value chain of the e-commerce mega-trend. The price trajectories of digital marketplaces such as amazon.com and Zalando in particular have recently attracted attention. Payment equities, too, however, have come back in demand following a sharp decline. In the logistics sector the recovery has been somewhat sluggish, with its dependency on the global economy acting as a brake.
