What’s the impact of the war in Ukraine on global ecommerce? [Ecommerce checklist]

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The impact of the war in Ukraine on business & ecommerce

It’s only the beginning. Nobody knows what to expect or what the final outcome will be.

Still, the effects of the crisis in Ukraine on the world economy are already visible. Huge losses are certain and many business areas will be affected, including global ecommerce. The Russian invasion can have a domino effect on global supply chains.

The (potential) impact of the war in Ukraine on ecommerce and business

• The impact on the world economy and the flow of goods and services due to economic sanctions and asset freezing on Russia as well as shutting airspace to Russian planes.
• Closing of factories by global companies (affecting the production and shipment of goods and components).
• The impact on gas prices and on other products, such as food, materials for chip and automotive production (Bloomberg).
• The impact on the production of specific products and raw materials, for example nickel for lithium-ion batteries (Russia is the third largest supplier), copper, platinum, palladium.
• Chip manufacturers can expect supply chain disruptions due to stockpiling and diversified procurement of components.
• The impact on the agricultural industry (both Ukraine and Russia play a key role in the agricultural industry on a global scale).
• The risk of long-term cyberattacks (for example on banks) and the impact on cybersecurity and IT infrastructure.
• Concerns about using software that originates from or has been produced in Russia.
• The impact on some digital products, for example games and apps originating from Russia.
• The impact of a halt on Russian oil and natural gas exports to Western Europe.
• Vendors with a prominent Russian developer headcount may have to move their labs to different territories.
• The risk of long-term unexpected currency fluctuations.

According to Fitch Solutions Country Risk & Industry Research:

Disruptions to the flow of (…) materials would have a costly effect around the world, particularly in Europe and North America.

The war in Ukraine: ecommerce checklist

The current situation is difficult and unprecedented, but you don’t have to sit idle. Take a proactive approach to protect your online sales business against any potential disruption, e.g. by ensuring you have enough stock or by relocating inventory if need be.

Ask yourself these questions to minimize the impact of the war in Ukraine on your ecommerce business. The list is not exhaustive, but it’s a good starting point.

The bottom line: stay proactive.

There are things that you can do to minimize the impact of the crisis in Ukraine on your online business.

A few examples of what you can do:

• Secure your inventory.
• Keep an eye on your supply chain and prepare for different scenarios, e.g. longer lead times.
• Consider diversifying your supply base.
• Secure your home and office network.
• Address customer concerns who are likely to expect an appropriate attitude from companies.
• Monitor the situation closely.

The war in Ukraine & ecommerce: conclusion

We don’t know the final outcome of the war in Ukraine. Above all, war is bringing a catastrophic loss of life, human suffering and widespread destruction.

However, unity and a proactive attitude will help us get through these difficult times and hopefully, come out of them wiser and stronger. This relates to both our personal and business circumstances on both individual and collective levels.

Webinterpret will do its best to support ecommerce sellers in the case of any unexpected events.

Sources

• War in Ukraine will compound global supply chain problems
• How Russia's invasion of Ukraine threatens the IT industry