Coronavirus Impact: 28 Business Experts Weigh In On How The Coronavirus Is Affecting The E-commerce Industry

Michael MicheliniBlog, Business, Manufacturing, Podcast2 Comments

The Coronavirus, now officially known as SARS-CoV-2 that causes the disease COVID-19, has infected more than 70,000 people from its epicenter in Wuhan, China to the world over. It has spread to most, if not all regions and cities in China and other parts of the world including Asia, Middle East, Europe, Australia and the US. Containment, treatment and prevention efforts are scaling up but deaths were inevitable and now has exceeded 2,600.

Part of the containment and prevention efforts undertaken by different countries is imposing travel restrictions and lockdowns. This affected many industries that move the global economy – transport, manufacturing, shipping, finance, tourism, trade, services and many others. One of those industries that are feeling the brunt of this global health emergency is E-commerce.

Straight From The Experts’ Minds

We gathered from 27 business experts within the GFAVIP community, their insights on how the coronavirus scare affected their businesses and the industry as a whole. Now, here’s Mike Michelini to let you in on what these GFAVIP experts have to say on the matter:

Now here’s an audio of this special podcast if you wish to just listen:

The Experts And Their Insights As Mentioned

Check out these experts and connect with them by joining the GFAVIP Community!

How is it affecting you/your business?
Uncertainty surrounds and affects everything that I am currently working on at the moment. I’m just grateful that in mid November I escaped Hong Kong on the day of the worst violence and vandalism and the total shut down of public transportation. At that time I decided to spend more time in the Philippines and make less trips back-and-forth to Hong Kong and Shenzhen.

How is it affecting you/your business?
Uncertainty is the keyword here again. I just don’t know how bad it will get.

How is it affecting you/your business?
It’s a disaster. Only one of the suppliers we have, small one from Nanjing is back to work, and others especially in Baoan area in Shenzhen are struggling to get back – supply chain for them is broken, only part of people are able to enter buildings to work, many are still locked in hometowns. We have around 25+ PO’s frozen with yet to know delivery dates, and for now, our own customers are starting to cancel direct PO’s

to us forwarding orders elsewhere (for higher prices) , same time our stock is depleted to minimum. We are looking for substantial losses not only this quarter but maybe for the whole year.

How is it affecting the industry?
I believe it is devastating. It is going to have a far reaching ripple effect, which is definitely not YET felt now in other countries. However, if closure of ports continue we can see serious out of stock happening for example on Amazon as early as April echoing late into this summer.

How is it affecting you/your business?
Yep, it’s having a massive impact.

My suppliers in Guangzhou and Guangdong are saying they’re waiting on Govt health inspectors to visit their facilities so they can be cleared and certified to return to production.

That’s not likely to happen until the earliest 24th Feb, latest around 17th March.

Things seem to be getting better, but there’s a lot of ‘health’ red tape’ to get through before they can resume full swing.

How is it affecting you/your business?
Optimistic about the opportunity to change my company strategy and business model.

I have started a live blog aimed at people living in Shenzhen.

How is it affecting you/your business?
Being a consultant for Amazon sellers, my business is affected as a direct consequence of the impact that it has on my clients: delay in production and in receiving stock means for us delays in starting new projects, planning inventory, receiving payments etc. Also, all other businesses are affected in the greater area of China, not only in the Mainland. This means big delays with delivery services, customer service, office hours, etc. – I’m still waiting for some documents from my bank.

How is it affecting the industry?
This issue is affecting everyone in the Industry of E-commerce. It is on one side driving demand up because people tend to go out less and buy more online, but is also slowing down the production from China. There are already a few winners that are going to benefit in the short to mid term: other supplying countries as India, Vietnam, Cambodia etc, and Western Brands. Here’s a good article about this by my friend Eric Heller.

How is it affecting you/your business?
I’m approaching it from a manufacturing standpoint obviously.

The obvious thing is that most factories aren’t open yet & if they are they have bare-bones operations up. So every process is slower than usual, getting responses, quotes, samples etc. Even the local & intl shipping companies are operating with bare-bones structures. At our office building in Guangzhou and I’m sure most offices in China, you have to apply for

a permit that allows you to resume working in your office. Not necessary for us, I’d already told my team to work from home until it’s safer to travel – our shipping agent is still working from home too!

Speaking of shipping, individual packages & mass productions can still be shipped in and out – there is just more scrutiny on each of the shipments. For example, we had about 4 new clients ship us samples in the last 2 weeks and every single shipment got flagged for inspection/additional customs fees. To put this into perspective we had over 250 shipments in the entire of last year and only 2 got flagged…

We have clients that were mid-production or had completed 70-80% of their order prior to the holiday, who chose to wait until the productions were done after the CNY holiday – instead of splitting the shipments in two. They’re going to start running out of inventory because the productions have been pushed back at least 2-3 weeks.

I predicted in my video because it would be a disaster if factories don’t start producing soon, that the Chinese gov would implement stringent health code laws for suppliers that wish to resume and that’s exactly what’s happening. The main issues are who knows how many factories can afford or how long would it take them to implement these processes in their factories? How many workers are even willing to go back to work now?

I’m personally affected by this because I can’t fly back into China, touch base with my team face to face after the Chinese New Year holiday and resume normal work. And although I’m currently in the process of moving out of China, I currently still have an apartment there, containing some precious items like my childhood pictures and my cat!

I am optimistic though, some of our factories are starting to return and I’m sure there will be more this and next week. And the more I talk to my team and friends that are on the ground the less worried I am because they’re all healthy. The real negative impact their feeling right now is the restrictions on their lifestyles.

How is it affecting you/your business?
Our service business, on the ground in China, is at a standstill. It is resuming very slowly, as our inspectors are allowed to get into some factories.

How is it affecting the industry?
Several of our clients (importers selling ‘FBA’) have been unable to get responses from some of their Chinese suppliers. We fear the worst in those cases — the

factories might have closed forever (it often happens at Chinese New Year, but this year it will probably be more common), the tooling might be lost, and finding an alternative source might take a long time.

All other importers are worried about delivery delays coming from (1) production delays and (2) shipment delays, as shipping quickly by air is very hard right now and even seaports have reduced their capacity.

How is it affecting you/your business?
I couldn’t manage to ship one order before CNY. We missed the boat for a few hours or a day at max.

The situation was a bit frustrating but I just told myself that it would just be a matter of a 2-3 extra weeks of patience. Then the Coronavirus situation started and up to today, the shipment has still not left the warehouse in Guangzhou.

How is it affecting you/your business?
Cut back on travel plans. Normally bouncing around a lot this time of year going country to country in Southeast Asia. With the unknown potential of this virus, I’m playing it safe so I can continue to travel in the future.

The countries aren’t going away but maybe some of the inhabitants are taking a break from this world easier than they expected. It’s frightening.

How is it affecting the industry? For travel bloggers, its’ a two-sided coin. On the one hand, there are many travel deals to be had at the moment thanks to the downturn in both leisure and business travel. On the other hand, there is increased risk as concerns of a global pandemic are spreading daily on social media and in the mainstream gory updates, not to mention sites tracking the death counts. It’s a bizarre time to be a travel junkie.

How is it affecting you/your business?
Keeping me working more. Since I work online in Hong Kong, I’m working from home and going out only once a day for a walk, with a mask of course.

How is it affecting the industry?
Not sure, I’m kind of cloistered in my own home.

How is it affecting you/your business?
My whole life is upside down. My wife and kids are in China and I’m in Manila. Borders locked down. Factories are still not open even weeks after the Chinese New Year. Our investment company of Amazon Businesses (Alpha Rock Capital) has enough stock – but still we are not sure how long these factories will be closed. Looking for US wholesalers of the products just to hedge in case factories don’t re-open for the next month or two.

How is it affecting the industry?
Similar to the above – many i talk to are going through this.

How is it affecting you/your business?
PCB Trading/Services Biz
Basically everything has slowed down and/or stopped completely in some cases for the time being. Face-to-face collaborative activities have been halted and instead virtual meetings are taking place (this pans out to less efficient communication and time lost in resolving issues). Although production activities have resumed for many of my suppliers their production capacity is reduced due to

workers inability to return to work and general difficulty with movement of people and goods throughout the country.

Swim Training Biz
My swim training company (and the larger team sports / sports training activities industry) has experienced an outright halt to all services. Swimming is a communal activity involving a lot of contact with other humans and as such nobody is swimming right now. Luckily for us winter is the slow season but it’s still hampering our abilities to prepare for the upcoming season (i.e. – arranging meetings and negotiating with schools/pools/etc., executing on initiatives to secure talent.. etc) We’ve resolved to focus more on planning and to do what we can in terms of execution in line with the fluid situation on the ground here as it unfolds.

Personally the self-imposed home isolation in adherence to the guidelines put out but the local government (Shenzhen) is producing a slight amount of cabin fever for me. Although not outright forbidden to leave my living complex there is little to do outside of my home as all major shopping complexes and other places where I might meet with friends are either closed or on reduced hours.

2-3 trips to the grocery store a week are the highlights of my week.

How is it affecting the industry?
PCB Industry
A generalized slowing of all activities. Pushed out delivery dates. Slow down of sales related activities overseas due to some aversion westerners are exercising in regards to traveling to China. Several trade fairs in my industry have been postponed, customers have cancelled their visits.

Sports/Sports Training
Halting/drastic reduction of all activities for the time being.

How is it affecting you/your business?
So far, manufacturing has been affected for me, my suppliers are back to work just now, which delayed production by 3 weeks or so.

As far as logistics go I am lucky with my warehouse as their warehouse team was only off for 3 days during Chinese New Year, but express services were shut down for about 2 weeks and I had trouble sending to some countries.
I didn’t have any issues so far with customers being scared to get the virus from packages, so orders are still fine.

How is it affecting the industry?
I think many companies will go out of stock due to suppliers extended off time. Shipping can also be a problem at the moment.

How is it affecting you/your business?
I do consultancy on development of suppliers for sustainability areas such as CSR, circular economy and energy areas. Right now, suppliers are focusing on getting the workers back to their posts and getting productions up and running. Sustainability is not a priority in their agenda unfortunately and we are looking at delays of at least 1 month with a new batch of suppliers. However, the situation is stabilising and Chinese government

police and medical teams have shown amazing assertive leadership and commitment to narrow down the outbreak. It reminds me of a story from 1972 with Yugoslav smallpox outbreak where after quickly introducing Martial Law, smallpox was stopped and eradicated in 3 months time. I think we will see a similar scenario with COVID-19 as well.

How is it affecting the industry?
Electronic industry supply chain is facing challenges in materials supply at the moment and working hard to find alternative solutions. I would say that this could be a valid opportunity for some factories to expand their client base at this moment and get into the supply chain of big corporations.

How is it affecting you/your business?
Regarding our business, wholesale. Since canton fair is cancelled, and I am in the seasonal decor business, I am expecting the impact to hit me for Q4 when the containers of March and April should be arriving and products being stocked on the shelves. I expect products not to arrive and not being stocked on shelves, so what I am doing is slowly starting to buy up out of season (meaning halloween decor, christmas decor etc..) products.

This way I hope to build up inventory by the time the season comes. Also, right now these products are on sale and I am expecting demand, thus prices to rise for the season so I hope to be able to sell them at higher prices since the competitors not necessarily have the working capital to buy inventory ahead.

How is it affecting the industry?
Right now the corona virus is mainly impacting manufacturers. Big manufacturing companies where I used to work at shuts down two factories as there are no supplies from China, thus employees have nothing to work with.

I also just had a few talks with chinese friends and business partners. I heard BMW is unable to ship BMWs with extras. So in case you are about to buy a new beamer from the factory, you cannot get seat warming and extras to your car, because most of these come just in time from China, and guess what. They are not coming just in time.

16. Anonymous
This one shared his thoughts on the matter but requested anonymity

How is it affecting you/your business?
Yes, it of course impacts us. But nothing special I would say. Just all our manufacturing + shipping from China is more or less paused.

Maybe the attached is a unique insight? 😛

This photo just came from a random manufacturer emailing me.

17. SANDRA from Natbay
How is it affecting you/your business?
Regarding the spread of Coronavirus, it is popular to find that related keywords are being searched on the search engine, like Mask, Hand cream killing germs as reflected on our report.

At the same time, the new social media posts on brand masks with design were popular the last few weeks. Fashion lovers showed their interest in carrying the mask with the unique design of some brands.

How is it affecting you/your business?
The issues associated with the virus in China causing significant delays in production times
We see that most Chinese factories are not back from the extended CNY break yet.
Mentioned delays have the most drastic effect on the new business projects:

Example 1. A new seller that is lacking inventory back up and has been waiting for her new products to be produced, takes a hit in terms of lost sales and delayed product launch.

Example 2. A recently signed client of ours delayed a service start date by a few weeks due to his chinese suppliers being still on break.

How is it affecting you/your business?
So from our four main suppliers, we have only one supplier that has returned to work, most suppliers are telling us that they will return to work after the 1st of March.

We are starting to run short of various products and can see that this will affect our sales in the coming months.

I think I’m in a pretty good stock situation, hopefully better than my competitors, but I still think that we will be out of stock in April/May.

How is it affecting the industry?
For sure this is going to affect capacity at suppliers, also it’s going to affect quality at suppliers, due to having new staff, that requires training.

This will also affect freight costs (at this time the costs are cleared) because there is a lack of shipments and a number of containers of building up in China. But in March I anticipate that shipments will start to increase greatly and the cost of shipping will rise rapidly.

How is it affecting you/your business?
Not much yet because I make it a point to have all orders shipped prior to the CNY rush and have all clients avoid the issues involved with up-to-speed immediately thereafter.

How is it affecting the industry?
In a Reuters report today, a survey of small business owners said that about 33% can survive under current conditions for one month and another 33% for 2 and 18% for

3…moreover, the Chief of Virology at the University of Hong Kong said, “it could be unwise for anybody …… be complacent that this (virus) is coming under control at this point in time”. Add to that the efforts to control the truth and rewrite the story. Jerry Lee Lewis sang it best – “There’s a whole lotta shakin’ goin’ on”!

How is it affecting you/your business?
Most of my business relies on the health of the overall ecommerce industry, and Chinese amazon sellers in particular. Chinese sellers have mostly only had their customer support teams working, while the rest of the team is on a forced holiday. Business will be down more than 40% this month and sellers won’t be fully back up and running for quite a while.

Mostly every non chinese national I know in Shenzhen has left. Most are more worried about the containment measures and

getting caught in a lockdown than catching the virus. Even if the situation is resolved, it will take a long time before people come back. It will take months or longer for the ecosystem and community to recover.

On a personal level, When I walked out and saw everyone in masks, I bought the first flight to Thailand and I’ve been waiting for it to blow over. Taking the time to work on some projects that had been on the backburner for awhile, and reassess where I’m at.

I’m thankful that my business is online, and provides me the freedom to move immediately in the case of a situation like this.

How is it affecting the industry?
Coronavirus has been like an atom bomb in the industry. Complete disruption to supply chains, logistics and most brick and mortar businesses. It exposes the failures of “Just In Time” inventory – with entire production lines in foreign countries shuddered because they can’t get the parts they need. Although factories are coming back online, they’re coming online at a vastly reduced capacity. It will take months to push out the orders they already have committed to, and many are not taking new orders at this time. No one I’ve talked to is optimistic about chinese manufacturing for the next year, and this disease has accomplished what the trade war has not – forcing brands to diversify their manufacturing base to other countries. Countries like Vietnam, Mexico, and the US are the real winners.

22. ROSE
How is it affecting you/your business?
We want to place orders with suppliers at the beginning of Feb but it was the critical time during the outbreak so we had to wait. Now it starts to get better and we are looking to work with factories as soon as the machines get started.

How is it affecting the industry?
Some customers start looking for alternative suppliers in Thailand, India in case things can’t get back in normal within short time

How is it affecting you/your business?
Orders stuck in China.
Getting fined for late shipping to my B2B accounts.
Factories and logistic companies are closed, can’t even get the right info to offer customer updates on projected delivery times. Fun stuff.

How is it affecting the industry?
Everyone seems freaked out and communication is much slower than normal.. apart from business not happening.

How is it affecting you/your business?
At LandingCube, we’ve noticed a significant drop in traffic from China. And as much of our team is based in Vietnam (which shares a border with China), we are seeing first hand the lengths that governments in Asia are taking to prevent the spread. Schools are shut down. A village of 10,000 has been quarantined. The business side effects of the coronavirus are not likely to end very soon.

How is it affecting the industry?
Employees are being encouraged to work from home in China. Unfortunately, that means many factories must discontinue operations. So many sellers can’t get new orders.

How is it affecting you/your business?
Sales people are working as they can work from home but raw material manufacturers haven’t started at all. At the moment they saying they will start back at the beginning of March.

How is it affecting you/your business?
Adding my experience here, from another perspective…

I have a software team working on data analytics for clients on ecommerce platforms. On Chinese ecommerce platforms there are a steep drop in sales in categories such as luxury products.

When we looked at their competitors’ data, there are certain luxury brands that have

dropped 80%+ in sales (of course there many other factors, but in general we see a drop in non-necessity products).

One of our clients that originally want to enter the Chinese market is holding off temporarily.

Again, as others have mentioned, once the situation gets settled there will be other new opportunities eg. Chinese consumers might have higher demands on personal care products etc. So let’s be optimistic and keep an eye on exploring new options.

How is it affecting you/your business?
Just moved back to HK in time. The virus affected mostly my effort in finding a job here.

Two offerings got cancelled due to the virus.

How is it affecting you/your business?
We manufacture and ship product direct from China so as soon as this came about we knew we were going to have issues.

Last year Chinese New Year was a hardship for us because we over-invested in a hot product that we ended up not being able to sell. This year we were a lot more careful about new products but invested heavily in our long-term stables. It’s very fortunate we were bold in our forecasting here because that overage kept us going during this Coronavirus outbreak whilst maintaining pretty serious sales volumes across our product ranges.

Some of our upsell and cross-sell heavy products ended up selling out but for the most part we kept everything steady and have not had to wind much down, though launching new product lines was put on hold.

In terms of fulfillment: one of our warehouses got shut down up in Hangzhou, but another remained open in Dongguan. Due to this contingency and shifting stock from one to the other we have been able to keep shipping throughout the whole period with only minor delays. Of course, there has been an uptick in concern from customers though about goods coming from China.

How is the Coronavirus Affecting The Industry?
In the performance marketing industry we see a lot of pure China dropshippers who suffered a lot from the Coronavirus shutdowns because they aren’t maintaining stock and likely don’t have very robust logistics options. I expected to see a decrease in advertising prices because of this but the needle didn’t move very much.

In terms of manufacturing though what we’re seeing now are delays in certain products. Not that the factories aren’t open, but there’s a lack of raw materials and some big queues of customers which pre-date Chinese New Year. I think especially trying to manufacture new products where we don’t have a pre-existing relationship with a factory we’re being given some quite substantial lead times and I expect this is likely to be the case for a few months to follow.

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2 Comments on “Coronavirus Impact: 28 Business Experts Weigh In On How The Coronavirus Is Affecting The E-commerce Industry”

  1. alexpaul

    It was a great information from the business experts on the impact of corona virus on eCommerce industry and these tips can help the companies to improve the business.

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