Corona Virus Update: How it Impacts Importers & Amazon Sellers

The Coronavirus Covid-19 has been causing severe disruptions for Chinese manufacturers, and thereby their customers around the world. In this article, we’ll keep you informed about the latest events and how importers and Amazon sellers are affected.

Do you have any questions?

Feel free to write your comments below if you have questions about the situation.

Video

In early March, Fredrik Gronkvist from Chinaimportal.com co-hosted a webinar with Renaud Anjoran from Sofeast Limited, on how the coronavirus impacts importers.

Update: March 10, 2020

Trade Shows Cancelled

Trade shows have been canceled or postponed across Asia. Here are some highlights:

• Globalsources announced the cancellation of all April-May 2020 trade shows in Hong Kong
• Saigontex and VIFA Home in Vietnam have both been postponed
• HKTDC has postponed some trade shows from this month to this summer
• The Canton Fair is still expected to go ahead next month (but things can still change)

Importers will need to get used to managing their imports online for the time being.

Are Chinese factories open yet?

Yes, most factories are operational at this point. Our customers are working on RFQs, samples and placing orders. Material and component suppliers are still slowing things down.

We have not heard that order backlogs have been slowing things down as much as we expected… maybe because some factories were not exactly thriving before this started.

Can we book quality inspections?

Yes, our quality inspection partner is operating as usual for around 2 weeks already.

Can we book lab tests?

Yes, QIMA and other testing companies are operational.

Can we book shipments?

Yes, both ocean and air freight are up and running. We’ve seen an increase in air freight/express rates but can’t say if that has anything to do with the virus situation.

Update: Feb 20, 2020

We’re starting to see some semblance of normalcy this week:

• Suppliers respond to questions
• We’re helping clients get price quotations
• (Some) product sample orders are moving forward
• Some customers are paying deposits

That being said, many factories are still waiting for permission to open. Those who are open operate at a limited capacity (often with less than 50% of the workers).

Some suppliers claim to start operations on Monday next week (but that’s what we’ve heard for the last 2 weeks).

The goods news: You can submit your spec sheets, request and negotiate prices, and order product samples. In other words, you can start working on new products.

The bad news: Production is mostly standing still, or is delayed. This is also the case for product samples/prototypes that weren’t finished before the CNY. Trade shows are also delayed until later in the spring.

At least things seem to move in the right direction. It’s also hard to gauge how serious the situation really is for the manufacturers, as the post-CNY is slow every year.

Update: Feb 14, 2020

1. Some factories in Mainland China opened earlier this week. We’ve been calling factories all week and it seems factories in certain regions are allowed to open.

2. Some factories in Shenzhen and Dongguan (most of our customers work with suppliers there) are still waiting for instructions… or so they say at least. Some claim that they may be able to open as soon as this weekend, or early next week.

3. I hope we’ll see more factories back online staring this coming Monday, with the rest following the Monday after that.

4. It’s still unclear if the trade shows will go ahead in April and May. We’ll know in the coming weeks.

Our situation

1. It’s business as usual at our Hong Kong office. I’m currently in Ho Chi Minh City in Vietnam, and will likely stay here for another two weeks or so (for business, not due to the virus).

2. We’re helping our customers with everything that doesn’t require input from factories.

Update: Feb 2, 2020

Chinaimportal.com: The situation is currently stable in Hong Kong. We are operating as usual. If things take a turn for the worse, our employees will be instructed to work from home, but we are not suspending operations.

When are most factories operational again? I’ve spoken to a few suppliers over the weekend. The current plan, for most of them, is to resume operations this weekend or early next week. This is in line with what would have been the case even without the outbreak. However, that can quickly change.

Risks (Important)

1. Even if the factories open “on time”, expect delays as many factories will be understaffed. Most “export factories” are not based in Hubei, but many of their employees (including managers) and material suppliers are.

2. This situation will likely remain for at least a few months. It’s possible that limited outbreaks may occur in other parts of the country, which in turn will force the authorities to restrict movement in affected areas. This would be especially problematic if it happened in Shenzhen, Dongguan, Ningbo or other major export hubs. Hopefully, it will not come to that.

3. Many Chinese factories have been under severe financial stress in the last year. Some factories may not recover from this hit, which increases the risk of supplier bankruptcy.

4. It’s unclear how/if this situation will affect quality inspections and lab testing.

5. Material and components delays will not only impact Mainland China but also manufacturers in Vietnam and elsewhere in Southeast Asia. Further, rapidly shifting to factories outside of China can make sense, but only if you have the buying power to reach the MOQs.

6. The April-May 2020 trade show season may also be impacted. We’ll simply have to wait and see at this point.

7. Airlines are cutting flights to and from Mainland China. This will likely result in higher air freight costs.