This is in spite of the fact that, in terms of the number of individuals afflicted by the illness and certainly in terms of the death toll, the coronavirus is almost completely restricted to mainland China, and more specifically to Hubei Province, where it was first detected. As of February 17, more than 71,300 people had been infected, although all but 764 of them inside China, and of the 1,775 people known to have died only five were in countries other than China.
But the centrality of the China to the global economy, both as its being the world’s manufacturing engine and as the second largest consuming nation, means that even a partial slowdown is bound to have an impact.
And the effect on the luxury product markets is likely to be even greater. For a country in shutdown mode, getting access to basic products and services is a primary concern. Handbags, perfume and jewelry purchases are being pushed aside.
“Our understanding is that luxury consumption in China has ground to a sudden stop,” wrote an analyst last week in the research division at the New York-based brokerage firm Alliance Bernstein.
TRADE SHOWS BEING FORCED TO ACT QUICKLY
Among the organizations being forced to make quick decision are the trade show organizers, who have found themselves forced to weigh the cost of delaying a trade show in an already packed calendar along with the health risk posed by thousands of exhibitors and visitors confined in an enclosed exhibition space.
Among the most high-profile cancellations was the Mobile World Congress, which is held annually in Barcelona, Spain, at the end of February, and is recognized as one of the most important showcases for cellphones and cellphone application worldwide. It typically attracts more than 100,000 people, with an estimated 6,000 flying in from China.
Certain jewelry and watch trade show organizers have already decided to play it safe. Switzerland’s largest watchmaker, Swatch, was among the first, when it cancelled its “Time to Move” summit for the media and retailers that was scheduled to take place in Zurich during the first week of March.
The Hong Kong Trade Development Council (HKTDC has announced that the Hong Kong International Diamond, Gem & Pearl Show, scheduled for March 2 to 6, and the Hong Kong International Jewellery Show, scheduled for March 4 to 8, will be delayed to May 18 to 21.
Making a similar decision was the the Hong Kong Trade Development Council (HKTDC), which announced that the Hong Kong International Diamond, Gem & Pearl Show, scheduled for March 2 to 6, and the Hong Kong International Jewellery Show, scheduled for March 4 to 8, will be delayed to May 18 to 21. The two overlapping shows, which usually run at separate locations, will now both be held at the the AsiaWorld-Expo.
May and June have a host of major jewelry trade shows scheduled, including Baselworld, JCK Las Vegas and the Hong Kong Jewellery & Gem Fair. As of yet, their organizers appear to be hold tight and waiting to see how the situation develops.
But, as is inevitably the case, what is a negatively disruptive for some, provides opportunity for others. E-commerce could see even faster growth in the wake of the coronavirus.
E-COMMERCE COULD BE A BENEFICIARY OF THE CRISIS
But, as is inevitably the case, what is a negatively disruptive for some, provides opportunity for others.
On February 11, Chinese e-commerce giant JD.com and its partner, Dada Group, announced they would be creating 35,000 jobs for those unable to work due to the coronavirus outbreak in the country.
“The move aims to minimize the impact of the epidemic on employment in the short term, and to help tide small and medium enterprises over during the period, and overall support stable employment, while seeking to minimize the overall impact of the virus on employment and people’s livelihoods,” the company said in an announcement on its website.
For JD.com, the coronavirus provides a sense of déjà vu. The company started out as a brick-and-mortar store in Beijing in 1998, but was relaunched as an online business following the SARS epidemic in 2004.
The Chinese ecommerce market was already three times the size of that in the United States, before the start of the coronavirus crisis, with a 35 percent share of all retail sales in the country. It now could be set to grow at an even faster rate, given all that has happened during the early weeks of 2020