Date: 12 January 2021

This World Bank discussion note provides an early assessment of the impact of COVID-19 on e-commerce platforms and digital financial services, identifying the opportunities, good practices, and key challenges that have emerged in different regions. The study is based on interviews with some of the largest e-commerce platforms conducted early after the onset of the COVID-19 crisis and an extensive analysis of their corporate media channels, quarterly and annual financial reports, and general media reports.

The project team also engaged with new and emerging platforms that leverage digital channels and digital finance to promote participation of MSMEs in the economy in emerging markets, Africa in particular. The study also benefitted from interviews and discussion with industry experts, entrepreneurs’ associations, and other players in the field.

Extract from the study: We observed the following three trends…

First, new platforms are gaining traction in sectors where large-scale platforms have failed to achieve widespread coverage, including agricultural value chains. In particular, in Sub-Saharan Africa, digital platforms such as Twiga Foods in Kenya and FarmCrowdy in Nigeria have supported agricultural supply chains to leverage digital platform to access markets.

Second, new business models are emerging due to the convergence of ride-hailing apps, e-commerce providers, mobile-money platforms, and social media. (See Box 3.) The research shows that convergence between different business models is growing; platforms that initially focused on transports, logistics, or mobile payments are expanding operations and providing e-commerce functionalities.

Third, evidence is growing of partnerships between fintech platforms and local markets to promote microenterprises to expand online sales during the times of crisis. The COVID-19 pandemic triggered initiatives to help local stores and producers leverage digital channels to survive the pandemic. Most of these initiatives are in their initial stages, and it is unclear whether they will consolidate into viable and financially sustainable platforms in the years to come. Nevertheless, they show the increased interest of MSMEs to participate in the digital economy