Transformation of Traditional Retail Industry

Covid-19 outbreak has affected the global economy, citizens around the world cannot visit the stores and shop in person. The pandemic has severely impacted the physical store businesses of the traditional retail industry around the world. The retail industry is facing an unprecedented crisis during the pandemic. Many small and medium-sized retail brands are forced to close down. Multi-national chain retail groups have also closed down their physical store operations in some regions, and focus on their online store sales, and use online and offline data to help retail businesses to capture the sales opportunities and respond to changes in consumption patterns brought by the pandemic during this time.

Before the Covid-19 outbreak, expensive store rents and labor costs have weighed on the operating cost of retail industry. With the development of smartphones and the Internet, the rise of online shopping trends compete against traditional retail operations. Multi-international chain retail brands have successively announced the reorganization of their operation model, the termination of some physical store operations, and the shift to online platforms to explore new markets and business opportunities. The Covid-19 pandemic has also created an opportunity for the traditional retail industry to accelerate the transformation from physical store business to online sales operation.

Under the pandemic outbreak, online business of e-commerce platforms globally have surged, which has become a good opportunity for the retail industry to break through traditional business patterns. In recent years, e-commerce platforms users can buy everything they need for food, clothing, housing and transportation with a mobile app. The platform will also provide one-stop digital supply chain network such as online inventory monitoring and logistics, making sales faster and easier and connecting different businesses and customers across borders. Therefore, in addition to developing self-operated online store business, the retail industry will also actively cooperate with e-commerce platforms to sell goods through the platform and use the platform’s sales data in addition to their offline data to target customers more accurately and directly.

Although selling on online platform have brought business opportunities to the traditional retail industry, the increase of orders and supply logistics are not properly managed, it will increase the working capital needed for the online retail business. With the increase in demand for the products, stores needs to have sufficient cash flow to prepare for the increase in sales. There are also online platforms that provide supply chain financing for e-commerce companies, which can provide funds within a short period of time and allow e-commerce merchants from the traditional retail industry to grab new online sales opportunities.

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About FundPark

Founded in 2016, FundPark is a trusted online trade finance platform in Asia striving to provide simple and effective solutions with innovative financial technologies to help corporates transform invoices and purchase orders into cash and improve corporate’s cashflow sufficiency. FundPark provides different supply chain financing solutions to corporates and innovative investment opportunities for institutional investors, commercial banks and other financial institutions.

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