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DoorDash and Etsy Look To Maintain Online Momentum Post-Pandemic

By Raymond Pucci
March 10, 2021
in Analysts Coverage, Credit, Customer Experience, Debit, E-commerce, Merchant
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DoorDash and Etsy Look To Maintain Online Momentum Post-Pandemic

Online businesses are warily looking ahead to the Great Reopening once Covid-19 vaccinations have been received by most Americans. Restaurant delivery firms and e-commerce marketplaces such as DoorDash and Etsy had a 2020 surge in business that no one saw coming. E-commerce across most verticals doubled and tripled year-over-year compared to 2019. Now what happens in 2021, when probably by May mostly everyone should have received their jab in the arm?

Expectations are for consumers to go back to eating out and traveling in big numbers. Meal delivery and online shopping growth rates will come back down to earth, but consumers will continue to like the convenience of online services. While the stay-at-home lifestyle will recede, e-commerce will still be a part of consumers’ order and pay habits. Curbside pickup will take on a larger share of online order fulfillment. Meanwhile, delivery firms will continue to sacrifice profits by competing on price to gain new customers and market share.

The following excerpt from a Wall St. Journal article reports more on the topic:

Delivery company DoorDash thrived during the downturn as restaurants closed or sharply curtailed indoor dining. In the fourth quarter, it handled 273 million orders, more than triple the amount a year earlier. Its overall performance drove a better-than-expected stock-market debut in December.

But as diners return to eating in restaurants, they are likely to order less at home, and DoorDash, which remains unprofitable, expects growth to slow. Finance chief Prabir Adarkar said on a recent earnings call that while business held up somewhat in markets that have reopened, “vaccination and full re-openings could drive sharper changes in consumer behavior than current data would predict.”

Online marketplace Etsy doubled its revenue in 2020, as shoppers purchased everything from face masks to home décor. But executives have said those purchases could wane.

“We also know, we hope, that as the world opens up later this year, consumers will soon be able to spend more of their money on travel, dining and entertainment, and this will create some headwinds to Etsy’s growth relative to 2020,” financial chief Rachel Glasser said on a recent earnings call. The company still thinks that it can outgrow the broader e-commerce sector.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

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Tags: Covid-19DoorDashE-commerceEtsyOnline Shopping

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