Eng
Eng
Senior Consultant
Crisis caused by new Coronavirus accelerated pace of digital transformation even more and forced businesses to include remote work and development of e-commerce into the “agenda”. The other side of the market – consumers remained without digital influence. E-commerce became a replacement or filler of physical shopping for them and presumably, these changes will make deep roots in their behavior and will continue in post-pandemic period as well. However, background of these processes is even more interesting – did every business mange to timely and properly respond to digital challenges, what do international statistics say and what is the vision – did the pandemic landscape of retail trade give businesses time and resources to adapt?
International trends – are businesses ready for digitalization?
It’s been a long time since change in consumer behavior and their readiness to engage in e-commerce processes became one of the main focus of studies conducted by international organizations. For example, United Nations Conference on Trade and Development (UNICTAD) annually measures B2C e-commerce index, which combines levels of internet consumption by individuals, share of protected internet servers and data on owning accounts in financial institutions. Similarly, International Tele-communication Union (ITU) offers information and communication technologies (ITC) development index [1], which is also oriented on online shopping behaviors of consumers and channels utilized in this process. This list also includes statistical data gathered by Organization of Economic Cooperation and Development (OECD).
If we have a look at e-commerce report called “E-commerce during the COVID-19 pandemic” conducted by OECD in October of 2020, we will clearly see that online commerce is very quickly developing. According to the report, retail sales (orders) made through e-mail and internet in EU member countries increased by 30% in April of 2020 compared to the previous year. Trends are similar in USA, where e-commerce orders increase by 14%-16% (see chart N1). The said report also highlights dynamic development of e-commerce in Europe, Northern America and Asia-Oceania regions in the first half of 2020.
[1] The ICT Development Index (IDI)
Source: OECD, E-commerce during the COVID-19 pandemic, 2020, October. Calculations are based on EUROSTAT statistics.
UNICTAD report “COVID-19 and E-commerce” published in summer of 2020 shows quite an interesting picture, incorporating experience of 257 companies from 23 less developed countries [1]. Some of the identified trends truly deserve our attention:
[1] These countries mostly cover Africa and Asia – Pacific Oceania regions.
Source: UNICTAD, COVID-19 and its impact on e-commerce of businesses, 2020
ACT’s role – experience from even broader geographic area
The 2020 pandemic and economic crisis enabled ACT through cooperation with different countries and international organizations (EBRD, World Bank, UNDP, USAID) in various projects to contribute globally in increasing sustainability of business sector and identifying pandemic channels affecting them. The said projects enabled us to study e-commerce development issues in focus regions (Caucasus, Western Balkans, South-East Europe, Central Asia and South and East Mediterranean) and do a research on the impact of the pandemic on businesses. As expected, business operating in focus regions shows different types of readiness for digitalization (chart 3). However, regardless of such different results, it is important to mention the overall attitude inquired respondents had in common – small and medium-size businesses have a desire to involve in e-commerce but they hesitate because of lack or complete absence of information and digital tools.
Source: ACT Research, 345 SMEs inquired in Caucasus, 827 SMEs inquired in the Western Balkan region
Our team had a chance to additionally study challenges of small and medium business operating in Central Asia, South-East Europe and SEMED countries during the pandemic within the scopes of the EBRD-sponsored project “Impact of COVID-19 on small and medium businesses”. As a part of the given study, we asked respondents representing small and medium-size businesses what percentage share of the company’s sales switched to online platforms after the pandemic started. Overall picture is also very interesting, as declared by the majority of small and medium businesses from the listed regions, sales did not switch to online shopping at all, while only a very small part of companies managed full digitalization. Businesses operating in South-East Europe (chart 4) appeared to be the most prepared for such transformations, this can be explained by the fact that logistic services were already well-developed and organized in this region and already established practice of e-commerce.
Source: ACT Research, 570 SMEs inquired in SEMED, 598 SMEs inquired in Central Asia and 184 SME inquired in South-East European region
Unplanned changes with long-term results
The new Coronavirus pandemic turned digital development into inevitable reality. When searching for answers, we clearly saw that this seemingly simple way is actually quite complex process and to pass this road, only “desire to digitalize” is not enough. Businesses had to cope with all the problems which already accompanied the process of switching to a new platform: absence of relevant experience, lack of resources or infrastructure. Even though supporting business became main migraine for every government, the majority (more than 50%) of businesses participating in different studies unanimously admit that unfortunately, their government, when working on development of priority sectors, left this part behind and online commerce still remains as unsolved issue.
It’s a fact – digitalization has not entered our lives just temporarily. These are more unplanned changes which will bring prolonged, long-term results.
In 2002, for the purpose to promote books and reading, UNESCO started a large-scale project – “World Book Capital” when one specific city is nominated each year to be designated as the world book capital. On April 23 of 2021, this honorable status was designated to our capital city and consequently, Tbilisi will turn into world book capital for a year.
We all agree that during the world pandemic, Coronavirus to some extent helped us to push forward topics that are top priorities for us. Each of us had different ways to balance aggravated stress level by means of relatively pleasant activities, however, the choice was limited by the pandemic. Fortunately, reading books is on the small list of activities which, together with gaining knowledge, is a great way to relax.
If we say that the pandemic changed life for many of us, logically the question arises – did it make in influence on our habit of reading books?! In reality, did this suddenly spared time pushed our society to read more or in contrary, elevated stress turned us into passive readers?!
“Consistently studying change in the behavior of readers is well-established practice all over the world. Georgian market also needs such constant monitoring, as collected information acts as a foundation for right development of the book market. This topic is particularly important during the pandemic, which made significant changes in publishing industry” –declares executive director of Georgian Publishers and Booksellers Association, Tinatin Beriashvili.
In compliance with a joint request of Georgian Publishers and Booksellers Association and House of Writers, ACT conducted a large-scale study on the Georgian book market, certain tendencies have been identified based on the study results.
- Reading books once a year, once in 2-3 months or every day
According to the study conducted in February of 2021, our society is divided into two exactly equal groups: half of respondents who managed read fictional or non-fictional literature in 2020 and the other half, who could not read even a single book throughout the year.
Study results also clarify that more than half (56%) of readers read books at least once a week, among them – 19% managed to read intensively – every single day; almost one fourth of respondents reported on reading quite passively – once in two-three months at maximum. Number of such passive readers is even bigger in regional cities compared to Tbilisi.
It was of course interesting to get an answer on one of the main questions and find out whether the frequency of reading changed during the pandemic. As it turns out, the pandemic did not make any impact on reading habits of half of our reader respondents, while one third of respondents “blamed” pandemic for reading more frequently. 15% of respondents noted that unfortunately, they can spare even less time to read books.
Readers manage to read averagely 13 books throughout a year (the list starts with Georgian and translated literature leaving books published in foreign language in the minority), however more than half of residents (55%) report on reading 1-6 books. The study tracked some differences between those living in the capital city and regions – number of books read by Tbilisi residents is two times higher than number of books regional residents read during a year.
- Favorite in locked space – fiction
It is interesting to find out what is major factor when selecting the book to read? How popular the book is or something else? 46% of inquired respondents are guided by recommendations of friends and family when selecting a book, 42% of respondents focus on the contents and annotation of the book while 31% of readers make choice on their favorite authors.
As the study demonstrated, a vast majority (86,5%) of respondents prefer to read fiction mainly, while 13.5% of respondents love reading non-fictional literature. The most actively read categories of fiction over the past 1 year include modern literature, classic literature and detective/horror/mystics. As for non-fiction, readers are mostly inclined to books covering historical, political and cultural thematic.
“The pandemic did not affect my choice of fiction I read” – days 9 out of ten inquired respondents. However, the pandemic drove the remaining 10% of readers towards science fiction/fantasy/utopic and detective/horror/mysticism.
- Where do we read, where do we buy
It is quite logical that bookshops are prevalent among all other places where books are sold. Before the pandemic, 75% of readers would visit them, followed by the attendance rate on book fairs (18%). As for libraries, our respondents were even less active in visiting libraries. Not to say anything about the pandemic period, 77% of respondents did not have experience of visiting libraries even before, which they mostly explain with lack of time and need.
We were interested to find out what respondents think about updating their personal library in near future. According to the results, 14% of respondents are less likely or completely exclude the possibility of buying books this year. However, it’s not that bad, because 6 out of ten readers (64%) are still ready to visit places where books are sold, half of them (31%) are sure of it.
Regardless of the turbulent zone we are all in now, fortunately, books are still in demand and readers still intend on buying them. As it turns out, this new pace of life did not make any significantly negative impact on reading habits. However, it is impossible not to notice that half of residents cannot read books at all. This makes it even clearer and obvious, that habit of reading books needs to be encouraged and promoted.
As noted by consultant of international projects at House of Writers – Natia Lursmanashvili – “House of Writers is a living organism and publishers as well as readers are its beneficiaries. Accordingly, change of their behavior over the recent years (including the influence of the pandemic) is directly connected to defining future strategy of the organization”.
* Survey was conducted through random sampling among 1000 adult (16+) residents of Tbilisi, Batumi, Kutaisi, Telavi, Gori and Zugdidi in February of 2021. Utilized method – FTF interview. Statistical error of data does not exceed 4.4%.
The efficacy of combating Coronavirus declared as an invisible enemy is gradually becoming tangible. While the global vaccination campaign continues, according to Bloomberg, the vaccination process has begun in 111 countries with a total of more than 279 million doses of vaccine entered. Some countries were capable to accomplish the full course of vaccination (2 vaccinations at several-week intervals), with a total of 28 million people worldwide already completely vaccinated.
According to the world map posted on the Bloomberg website, which shows the progress of vaccination by country, Georgia is still left without any data, no vaccine produced by any country has been imported into the country at this time so far.
Before the introduction of the vaccine in the country, ACT interviewed the citizens of Tbilisi and inquired about their attitude towards vaccination and readiness for specific vaccines.
80% of Tbilisi citizens believe that the vaccination process will have a positive effect on improving the epidemiological situation. There is a high level of awareness about vaccination among the population, every second citizen has some information about the vaccine. This can be explained by the urgency of the topic and existing high expectations.
The most active source of information is the Internet, accordingly, 70% of the population of Tbilisi names it as the main channel of information. There exists a high level of information provided through television, especially among the older generation (55+), 18-34-year-olds are mainly informed about the Coronavirus through Internet, but unlike other generations, sharing of information with friends and relatives is higher, every fourth citizen discusses or receives information about the vaccination against coronavirus from a close friend or relative.
Every third citizen of Tbilisi aged 18-34 believes that he will have to get vaccinated next year. Citizens aged 34-55 (26%) are optimistic to plan to get the vaccine in the fall of 2021 if it is in place. 23% of the 55+ older generation also think they will get vaccinated in the fall of 2021. Research shows that, unlike the people who are not at risk and the people with special needs, the ordinary citizens are not probably like to get vaccinated in the spring. However, the small percentage difference in the overall picture and the percentage of "I do not know" answers (12%) shows that the population is confused and is not clearly determined when the full vaccination of the population is likely to start in the country. (კვლევის თარიღი ?)
Vaccination readiness by generation is highly expressed among citizens aged 55+ (43%). This can be explained by the understanding of being at risk at this age. However, every fourth citizen of this age has not yet decided to be vaccinated, and every third is not going to get vaccinated against the coronavirus at all.
The highest rate of ambiguousness regarding getting a Vaccination or not is observed among the millennials, with 32% not knowing if they need to get vaccinated. Only 41% of millennials are saying they are ready for the vaccination process, and 26% of respondents are not willing to be vaccinated at this stage.
The percentage ratio of respondents in the overall picture of citizens’ readiness for the vaccine indicates that the population of Tbilisi is not yet convinced about the uttermost need for vaccination, every third citizen is not ready (31%) for the coronavirus vaccine or has not yet been decided (29%).
The survey shows that in the process of decision-making Tbilisi citizens are likely to consider the opinion of the following community groups: medical staff (59%), familiar competent medical workers (32%), and the church representatives (12%).
The main reason for abstaining from vaccination, according to the survey, is distrusting the COVID-19 vaccine (34%), which is mostly demonstrated in people aged 55+ (40%). Every third citizen is concerned with the side effects that may bring the vaccine (32%). 13 percent of 18-34-year-olds say they are not worried about getting the coronavirus at all.
Against the background of general high distrust, it is of interest to know which vaccine is the most trusted by Tbilisi citizens and which are they categorically against getting. ACT was interested to learn what is the attitude of citizens toward all the famous vaccines existing on the market. The survey found that among the most reliable vaccines are American-made Pfizer and Moderna (50%) and European-made vaccines - Bio-N-Tech and Astrazeneca (46%). The majority of Tbilisi citizens are not ready to get the Russian and Chinese vaccines, moreover, 63% of citizens say they will not accept the Russian-made Sputnik V under any circumstances, and every second citizen (53%) refuses to be vaccinated with the Chinese vaccine – Sinopharm.
*According to the Kovacs platform vaccine distribution plan, Georgia will receive a total of 215,000 AstraZeneca and Pfizer / Bio-N-Tech vaccines’ supply in two stages, although the plan does not specify when the vaccines are to be delivered to the country. Therefore, against the background of high expectations and existing distrust, it becomes important to provide additional information to the population about the vaccination plan and its positive effects.
*Kovacs platform vaccine distribution plan: https://www.who.int/docs/default-source/coronaviruse/act-accelerator/covax/covax-interim-distribution-forecast.pdf?sfvrsn=7889475d_5
* Survey was conducted through sampling method among 414 adult residents of Tbilisi on 16-18 February, 2021. Methodology used – phone survey. Statistical deviation rate not exceeding 4.9%.
Curfew and other regulations in everyday life that are focused on limiting the spread of virus and prevention still remain topical. After the end of critical second wave, regulations set in force by the government throughout Georgia are gradually lightened, but curfew after 9 p.m. still remains as a painful topic for Tbilisi residents among restriction of the movement of public transport on holidays and online format of educational institutions.
After severe epidemiological situation, virus outbreak and increased death rate as well as high pressure on the healthcare system that occurred during the second wave, the government does not hurry to completely lighten regulations set in force.
ACT conducted another interesting research on this topic covering the residents of Tbilisi. As a result of the study, it turns out that as assessed by Tbilisi residents, in the process of managing epidemiological situation the government is not completely effective, particular criticism came from 18-34 year-old residents of the capital city, their assessment of the government’s effectiveness is 5.25 on 10-point scale. In addition, every second (51%) respondent from this age group believes that the measures taken by the government are too strict compared to the severity of the epidemiological situation.
Loyalty of citizens in assessing effectiveness of the government in managing the pandemic situation increases along with the age, 55+ Tbilisi residents believe that the government effectively manages epidemiological situation (6.12) and measures taken by the government are relevant to the epidemiological condition. Overall, Tbilisi residents rated effectiveness of the government with 5.75 points, while opinions split when assessing the strictness point – almost half of respondents (45%) believe that measures taken by the government are relevant, while the other part (43%) declare that measures are too strict compared to the severity of situation. This assessment does not coincide with Georgia’s rating on the Oxford Coronavirus Government Response Tracker, where the country is on the second step (75-85) of strictness on 100-point scale.
What do Tbilisi residents believe is the most important regulation in the process of fight against the pandemic and which regulation is the hardest to fulfill for them?
As believed by inquired respondents, top three most important regulations against the pandemic are: 1. Restriction of entertainment and cultural events and ceremonies (6.56), 2. Restriction on international flights (6.50) and 3. Restriction on visiting restaurants and food places (6.32). The picture is different for different generations – in 35-55 age group, restriction on visiting restaurants is replaced by the curfew, in addition, this regulation appeared to be lighter than others for 55+ Tbilisi residents, while the most painful regulation is restriction (6.06) of public transportation.
Residents in 34-55 age group believe that the hardest regulation is closure of kindergartens, schools and universities and switching to online format, because logically, number of parents is prevalent in this generation who have to personally cope with this regulation. This generation also painfully perceive restriction on international flights which is also explained by active travelling. Among all the regulations set in force by the government, millennials name regulations associated with socialization as the most important restriction, this imply restriction of entertainment and cultural events, international flights and visiting restaurants.
The study clarifies that youth agrees with parents’ generation on restriction of study process at educational institutions and also are disappointed because of the curfew which is related to active night life lived by this generation. In addition, 18-34 year-old youngsters perceive the said regulation as less effective in the fight against the pandemic similar to restriction of domestic transport and winter resorts in the winter. Such attitude demonstrates that young people do not perceive those three regulations as effective and have high expectations they will be abolished soon. They think that in active fight against the pandemic, it is important to set regulations on entertainment and cultural events, international flights and educational institutions.
The government of Georgia already announces additional relieve of restrictions, presumably, the country’s index on Strictness Tracker will change from March.
The inquiry was conducted through random sampling with 414 adult residents of Tbilisi on February 16-18 of 2020. Utilized method – telephone interviewing. Statistical error of data does not exceed 4.9%.