The new coronavirus is not just taking its toll on China, Italy and Korea: retailers worldwide are suffering as well. The efforts of Coolblue are a painful reminder of how dependent from China we really are. Is a new massacre looming in our shopping streets, virtual or otherwise?
Samsung factory and Armani catwalk empty
As the coronavirus is not just limited to China any more, but is spreading through South Korea and Italy (at least), a new series of economic victims is on the way. Is a show like Armani’s, held behind closed doors but streamed live from an empty location, becoming the new normal?
In South Korea the number of infections is rising as well, causing a panic in one of Samsung’s smartphone factories. The Korean electronics producer had hoped to outsmart the virus as it has no more factories in China, but now an infected employee was found and one of the factories was closed. However, the quick reopening of the factory seems to mean there will be no real implications on Samsung’s production.
Barbie with coronavirus
Several European companies have however said they did notice a drop in Chinese exports, even though most of them say it only concerns a small part of their product range. Dutch companies Blokker and bol.com signalled stock problems and warned for possible price hikes, while Philips issued a profit warning for the first quarter. Primark sees no short-term problems, but warns for stock problems if the epidemic keeps its hold on Chinese production.
Toy stores are starting to feel the consequences as well: Barbie’s Mattel sees production slow down, while Nintendo already signals stock failures in Japan – and if the crisis continues, the same problems may occur in Europe by April.
So far the most remarkable example is Dutch Coolblue, which deliberately tries to limit its sales in order to keep at least some items in stock for when the crisis really hits. To achieve that goal, the company has issued huge price hikes and suspended its marketing campagins, signalling it fears supply problems in the coming weeks and months.
Worse to come in Benelux?
Worse is still to come, ABN Amro’s Albert Jan Swart confirms in Dutch newspaper De Telegraaf: at least one in five container ships from China has not sailed towards the Benelux, causing not only problems on the Benelux markets but also having a knock-on effect. There already is a shortage of cooling containers in the Netherlands, which combined with this crisis leads to a problem for the transport of meat and fresh vegetables.
Another knock-on effect is starting to gather momentum as well: as three dozen Dutch companies have already received permission to work shorter days (and more applications are being reviewed), this would mean that people receive a lower salary while prices go up. All the ingredients seem to be in place to cause yet another another massacre in European shopping streets. In the Netherlands, car sales have already almost halted, De Telegraaf reports…
