Business leap to the Internet: 1000 online shops in one place, every tenth - a new one
In the first week of quarantine, the entrepreneurship and export development agency “Enterprise Lithuania” initiated the business support initiative “No quarantine on the Internet”, which per one month gathered 1000 Lithuanian online shops under one domain www.internetekarantinonera.lt. It brought together 100 professionals who have become mentors for businesses that are looking to digitize their activities and 20 partners who have offered support to make it as easy as possible for the businesses to move into a virtual space.
“Probably no one has ever made the digital transformation of businesses more important than the quarantine has. It is like a tsunami sweeping away traditional business models that have not tended to adapt to alternative options. One month later, it is gratifying to see that this tsunami was not so strong, and the Lithuanian business is successfully transforming, acquiring new competencies, stepping up to a higher level of digitization, introducing more innovative solutions into its daily routine. After the quarantine, they will not be able to operate without these solutions successfully. This guarantees even greater competitiveness of both local and global Lithuanian businesses”, says Elijus Čivilis, Vice-Minister of Economy and Innovation.
According to Daina Kleponė, the General Director of “Enterprise Lithuania,” the business support initiative “No quarantine on the Internet” consists of three main parts: Development of the Lithuanian e-shops’ database as a virtual shopping center, business digitization assistance by providing consultations, business mentoring, organizing e-learning and support for businesses by providing special discounts or free services.
“The way the businesses were digitized during this month of quarantine could be classified into several stages. First of all, those who already had online shops began to look for opportunities to strengthen digital marketing, used the necessary tools to do so and began to qualitatively develop this online sales channel, which until now was a side trading channel to the main physical trading channel. New e-shops have started to emerge in the market since the first week, which was created by entrepreneurs on their own through online shops’ rental platforms and by following simple steps to move into e-commerce that was developed by our consultants. A wave of new, higher-quality e-shops emerged around the second or third week of quarantine and their analysis showed that companies that had been on the market for decades had finally started online trading, new business niches and e-commerce opportunities emerged. These new opportunities were not considered by anyone before, fearing of risks or seeing no need. The most gratifying thing is that e-commerce is active in the regions, where the new e-shops have also appeared,” says D. Kleponė.
According to D. Kleponė, currently, there are 100 business mentors who, as specialists in various fields of e-commerce, provide free advice to less experienced entrepreneurs, leading them towards a digital and successful business. “We are extremely grateful for sharing the most valuable assets – knowledge and experience. We will soon be able to present specific stories of successful mentoring. We were also pleasantly surprised by Lithuanian companies, which send us their offers every day to provide significant discounts or provide services free of charge to businesses, which are having difficult times. This solidarity gives a lot of hope, and in this difficult period, it is really gratifying to see this” emphasizes D. Kleponė.
The analysis of e-shops brought together by “Enterprise Lithuania” shows that out of 1,000 registered e-shops, 10%, which is a 100 of them, were created after the announcement of quarantine, when businesses were forced to close their physical stores temporarily. While looking at the registration statistics, it can be seen that moving your business from physical stores to e-shops took from one to two weeks. Most of the e-shops created during the quarantine were created in the last week of March and the first week of April.
According to the product categories, the vast majority (25%) of e-shops created during quarantine sell food and beverages, second place (10%) – clothing, footwear, and accessories, in the third place (6%) – technical and electronic goods.
Of all registered Lithuanian e-shops, the largest category (20%) is clothing, footwear, and accessories, in the second place (13%) – food and beverages, in the third (11%) – furniture and home interiors.
E-commerce in Lithuania is carried out not only from major Lithuanian cities but also from regions. In the e-shop database of the initiative “No quarantine on the Internet”, almost a quarter of companies are from smaller Lithuanian cities. E-shops registered in Vilnius make up a little more than 50 percent, in Kaunas – 18 percent, in Klaipeda – 6 percent of all e-shops.
E-shops located in Lithuanian regions offer a wide range of goods, and they have similar supply as the big cities. Among the local e-shops, the most common category of goods is clothing, footwear, and accessories (20%), followed by furniture and home interiors (13%) and food products (11%).
Interestingly, almost 4 percent of the e-shops are family businesses with traditions passed down from generation to generation, and people have a strong desire to keep the family business alive during the quarantine. Therefore, they use e-commercial opportunities.
The quarantine, that lasted for three months in Lithuania, not only has stimulated the business to reorient and to pay close attention to e-commerce, but has also changed consumer habits. A poll of Lithuanian population revealed that during the quarantine every fifth person bought more than usual online, and nearly a fifth of the respondents intends to continue buying more online. During this period, the scale of e-commerce in the Baltic States in general has increased by 80%, and consignment flows in Lithuania grew by 54%.
Lithuania lost two positions in the IMD World Competitiveness Index, calculated by the Swiss Institute of International Management and dropped from 29th to 31th place. According to the four groups of criteria for the assessment of countries, Lithuania has significantly improved its position in the field of economic development but has declined in the areas of business efficiency, public sector efficiency and infrastructure assessment.