Most small firms in China yet to reopen after virus outbreak
Most small businesses in China have yet to reopen and are struggling with supply chain obstructions after the new coronavirus epidemic triggered a national shutdown, officials said Monday.
Authorities extended January's Lunar New Year holiday and ordered the closure of schools, factories and railways to try and halt the spread of the outbreak, which has killed more than 2,500 people.
Some industries have since resumed operations but only around three in 10 small and medium-sized enterprises were back to work, industry ministry spokesman Tian Yulong said Monday.
Ongoing transport disruptions make it hard for workers to travel and has prevented the shipment of raw materials, he added.
Officials pledged finance and aid for smaller enterprises on Monday, including preferential tax treatment for transport, catering and tourism businesses.
Key industries dominated by larger firms appeared to be in stronger shape. Cong Liang, an official at China's top economic planning agency, said the steel industry was operating at nearly 70 percent capacity while rail freight had almost returned to normal.
Small and medium-sized businesses account for around 60 percent of China's economy, and the crucial sector is reeling from the impact of the global public health crisis.
At least six in 10 small firms risked running out of cash to cover regular payments in the next two months, the Economic Daily state media outlet reported last week, citing a survey by a national representative body for small business.
President Xi Jinping said Sunday the overall economic impact of the virus would be "short-term" and manageable.
But economists have forecast a significant hit to overall growth, with Moody's Analytics revising full-year GDP projections down from 6.1 to 5.4 percent -- the lowest rate in three decades.
Hong Kong sees almost 25 percent decrease in sales
Reuters has reported that Hong Kong has seen a 24.1 percent decrease in retail sales amidst the coronavirus outbreak. The health crisis already made things worse for a market that was already struggling thanks to months of anti-government protests. Tourist traffic, which helped drive retail sales, continue to be on the decline in Hong Kong, and likely will not pick up again for a considerable amount of time.
January marked the 12 consecutive month of retail sales declines in Hong Kong, with sales dropping to 4.86 billion dollars. This marks the longest downward trajectory for Hong Kong's retail sales in three years.
The Hong Kong tourism board says that average daily traffic to Hong Kong plummeted to 3000 people. Data compiled by Bloomberg shows that is a 99 percent decrease from tourism traffic one year ago.
Lululemon confident in long-term China growth amid Coronavirus impact
Athletic apparel company Lululemon Athletica Inc. said that it remains confident in the long-term opportunities in China, despite the current disruption to its growing business in the region due to the coronavirus outbreak.
In the update on the outbreak, the company said it continues to work closely with local authorities to prioritize the safety of its people and guests in the region.
The majority of lululemon's 38 stores in China have been closed since February 3, while some are now operating on a reduced schedule. The company's online business has continued to operate.
Calvin McDonald, Chief Executive Officer, said, "We're inspired by the resilience and commitment of our team in China as we navigate the emerging impacts of the coronavirus. The safety of our people is our highest priority, and we are adjusting store operations based upon the recommendations of local authorities."
The company said it continues to monitor the situation and will provide an update on the financial and operational impact on its fourth quarter fiscal 2019 earnings call, to be held in late March.
How B2B marketplace TradeGala is offering buyers a real alternative to Fashion Trade Show
The industry is also witnessing significant effects following the recent outbreak of coronavirus. Fashion Trade Show has already been forced to reschedule this year. Meanwhile, in the UK, unprecedented winter storms caused travel chaos for buyers making their way to Fashion Trade Show recently, forcing many to completely abandon their buying trip.
So, how is the industry going to make it easier for buyers and brands? Digitalisation of the wholesale model is already offering a much-needed alternative to Fashion Trade Show. Thanks to a new wave of B2B marketplaces such as TradeGala, it is now possible for buyers to hunt out new products from the comfort of their smartphones.
While social media can help retailers discover small independent brands online, TradeGala allows buyers to browse entire collections and place orders.