Online commerce would destroy 85,000 jobs in ten years

Emily Zapalsky for Localtis

Between 2009 and 2019, the development of online commerce destroyed 85,000 net jobs in France*, according to the NGO Les Amis de la Terre, which published a study on the topic on March 23, 2022. The NGO warns in its press release that “ This is the largest social plan currently underway in France.” For 2019 alone, the balance was destroyed at 3,800. Retail is paying the highest price, with 8,400 jobs destroyed. On the other hand, 4600 have been established in wholesale trade.

The smallest trading companies (0 to 19 employees) are always the first victims of the digitization of trade, details of the study, developed using the methodology of Kavala Capital, which has already worked on this topic. They lost about 7,600 employees in 2019. However, they lost less than before; This number is already lower than the annual average during 2009-2018 (12,100). The NGO offers two explanations: the slowdown in the growth of e-commerce, after a boom period (though the study is not about the Covid period that was favorable for it), and the presence today of resilient players limiting jobs after natural selection that led to the bankruptcy of the most fragile companies.

Medium-sized companies (20-249 employees) are hardest hit than before. They lost about 1,020 jobs in 2019, compared to an average of 900 over the period 2009-2018.

All sectors involved

For its part, the largest companies (more than 250 employees) continue to benefit from e-commerce development “but to a lesser degree than during 2009-2018,” the document identifies: only 173 additional employees in 2019 versus an annual average of 1,600 between 2008 and 2018. “This is particularly visible in the electronic equipment, computers and home appliances sector, where large companies are now also the victims of job destruction,” explains the study, which outlines succinctly the following principle: “For every job created in a company with 50 employees or more, nearly 2 were destroyed in the smallest companies in 2019.”

All sectors are affected by this negative impact, with the exception of the electronics and computers sector. In the latter, job creation among wholesalers has offset job destruction in retail. The apparel sector is hardest hit by the impact of e-commerce, with 4,800 jobs destroyed in 2019.

Unpleasant prospects for the future

For Friends of the Earth, the prospects for the future are not encouraging. The association in particular fears that large companies will be the next victims of the digitization of trade, with more jobs affected. This trend will already be felt according to the report with the closure since 2020 of stores of brands such as Conforama, Naf Naf, André, La Halle, Célio, Devianne, Orchestra or Camaïeu. “H&M and Inditex (Zara) are also in the process of shutting down hundreds of others in order to digitize their activity and take on the major players in online sales,” asserts the NGO, which regrets the government’s lack of action. Even worse, the association believes that the tax breaks and other administrative and political support provided encourage the creation of logistics warehouses for e-commerce companies such as Amazon. “From the 4 warehouses built by Amazon in 2017, France has grown to 44 today and there are an additional 14 warehouses planned,” laments the association that stresses the environmental impact of these buildings. The development of dark stores and online grocery stores, which have been favored by the coronavirus crisis, could sharpen the movement.

*The figures take into account the creation and destruction of jobs in all retail and wholesale sales including support jobs needed for the activity (transportation, logistics, associated services) to show whether the balance is positive or negative.

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