Recession-Proof Your E-Commerce Business Operations


A Look into E-Commerce for 2023

E-commerce merchants have had to deal with an onslaught of change recently — an acceleration of online shopping, disruptions due to COVID-19, inflation, and a possible recession — which has significantly impacted how online businesses should be operating to remain viable now.

The aforementioned events have given way to a few trends that online sellers must be ready to adopt. “Because of inflation, I see consumers looking for more bargains when they shop online,” said Ya Wen, SVP of Americas at Payoneer. “Since COVID conditions have improved, more shoppers are shopping … however, people are more cautious about their wallet. I predict that market players will do more and launch more tools and resources to provide better deals for consumers.”


Optimizing Operations to Recession and Inflation-Proof Your E-Commerce Business

PaymentsJournal Optimizing Operations to Recession and Inflation-Proof Your E-Commerce Business

Apart from focusing on budget-friendly offerings, merchants must be ready to optimize current strategies to draw in more customers. For merchants that have significant resources, the trends point to building an omnichannel strategy. Small and medium-sized businesses (SMBs), on the other hand, need to take a careful look at the cost of acquiring customers across different channels. These costs seem to be increasing and, therefore, merchants must rework their e-commerce tactics, focusing on their marketplace power, their traffic, and their economies of scale.

If the rising cost of customer acquisition isn’t enough, merchants must also contend with another possibility of supply chain disruption and take appropriate actions to minimize impact. Merchants can begin by looking at their supplier base and determining where they want to take action to offset this risk. China is a prime supplier for many businesses and recent news only emphasizes this need.

“We already know the latest news from Apple, as they are looking to move manufacturing from China for iPad and iPhone products,” said Wen. “What that means to the e-commerce seller is that they will start thinking about their supplier and their supply chain strategy overall and try to diversify their supply chain, looking more toward Southeast Asia, Latin America, even parts of Europe. This trend will continue and accelerate in 2023 and beyond.”

That said, Wen noted that as the Chinese government continues to ease its COVID-19 restrictions and reopens its borders, Chinese merchants are eager to expand their businesses on a global level. This expansion means more bargains, more selection, and more competition.

Another trend merchants should watch closely is the rise of the creator economy, which is also expected to accelerate this year. Creator platforms such as Instagram, TikTok, and Twitter are social commerce platforms where creators have amassed a significant following and are looking to monetize the traffic they have.

One event that cannot be ignored by merchants is the potential recession and its impact on e-commerce throughout this year. “One big trend I’m looking at is what the potential for recession means for e-commerce ,” said Daniel Keyes, Senior Research Analyst of Merchant Services at Javelin Strategy & Research . “I’m interested to see how the industry responds. The reflexes will be negative: demand goes down, online shopping goes down. We don’t really know how the modern e-commerce market will respond to a recession. When you add the supply chain issues, then you get into shipping problems, making e-commerce more complicated. If there is a recession, there are a lot of areas in e-commerce that will change.”

“I think it will definitely change the economics both on the consumer side and on the seller side, and frankly, the marketplace side,” said Wen. “The prospect of having a real recession will have a bigger impact on the e-commerce trend overall.”

How Fintechs Are Equipping E-Commerce Merchants to Navigate the Changes

In answer to the extreme challenges e-commerce merchants continue to face, some fintech players have stepped in to help.

“Payoneer really adds value and helps e-commerce sellers in a tough macro situation. Payoneer moves faster than traditional banks, something that SMBs have really been relying on. Payoneer offers products like working capital, [which is]  sometimes a lifeline for small and medium-sized sellers in a tough environment. We help them to build their selection by buying the important inventory and being competitive in spending on some of the online advertisements. We provide an end-to-end, money-in, money-out service. This is much nimbler and cheaper and faster in a time of real-time changes in the economy.”

These financial and payments-related products will continue to grow, fueling more innovation. As Wen explained, now Payoneer can help relieve their clients of tax issues and accounts receivable issues, just to name a few.

“There are plenty of problems that businesses could use help with,” agreed Keyes. “There’s always an opportunity to step in, especially during a recession.”

What’s Ahead in 2023

Despite many news outlets and thought leaders warning of a potential recession, there are important reasons to be positive this year.   “I think the competition in the e-commerce space will continue to heat up,” said Wen. “We’ll see more players coming into the space —spending billions of dollars trying to build that fulfillment capacity, build[ing] their local regional sales and marketing capacity to really drive seller recruitment, [and] offering a deeper selection and better pricing globally — so that competition will heat up further as China opens up. That’s great news for consumers.”

Wen emphasized the importance for small and medium-sized businesses to look beyond their own backyard and think globally, not just in terms of new customers, but also suppliers and partners. Demand is strong, both domestically and beyond our borders, and companies should consider partnering up with Payoneer to leverage their account receivables and supplier payment solutions to facilitate global growth.


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