The death toll from the coronavirus is mounting. The global impact is worsening. And business, increasingly, is feeling the pinch.
A few weeks ago it seemed the focus was on the drastic falloff in Chinese tourism — and indeed, as noted in The Economist, as many as 400,000 Chinese tourists will have likely canceled trips to Japan by the end of next month.
But more recently, there have been ripple effects seen in getting goods to consumers and businesses in a timely manner.
The initial headlines may have focused on Apple and other multinational businesses that have supply chains that reach far into China. Airlines had started canceling flights to China. And at the same time, with several Chinese plants idle, production has stalled across a number of verticals.
The anecdotal evidence is there, dotting the landscape across fashion firms, tech firms and retailers. In one example, Under Armour said shipments of packages and fabric will hit first-quarter results by as much as $60 million.
The intertwining of China, and, well, pretty much everyone else can be seen in the fact that as estimated by UBS (in a report cited by AP), China is home to more than 80 percent of smartphone and notebook production and 55 percent of handset exports, and 27 percent of auto production.
Wells Fargo has warned that big-box retailers in the U.S. — a roster that includes Target and Best Buy — could see empty store shelves by mid-April. Target and Walmart “are more heavily dependent on a shorter lead time replenishment model,” said the Wells Fargo analysts in their report.
That implies barren store shelves, should the current state of affairs across supply chains stay the same, or worsen. “While there is finished product sitting in factories and distribution centers in China, our contacts have indicated that almost nothing is moving over the water or by air at the moment,” the Wells analysts said.
The ripple effects of 60 million Chinese workers staying home will have impact far beyond China.
Cross-Border Payments: Cross-border transfers over SWIFT’s global payments innovation (also known as gpi) topped $77 trillion last year, almost double the $40 trillion that moved through the service in 2018. And at its investor day this past week, Visa said that within the B2B space, cross-border flows represent a $10 trillion opportunity.
Voice-Activated Speakers: New estimates show that Amazon holds the dominant edge in the market for smart speakers. As much as 70 percent of people in the U.S. who use the devices are using an Amazon Echo.
Messaging and Milestones: Facebook-owned messaging offering WhatsApp passes a milestone, with the announcement that it has 2 billion users.
The Cost of Love: Broken hearts club: Consumers report losing more than $200 million to romance scams last year, as estimated by the FTC. That’s up 40 percent over 2018.
B2B Targeted: The FBI reports that Business email compromise (BEC) scams are on the rise. And as of last year, according to the bureau’s latest cybercrime report, and now are half of all losses from cybercrime. An estimated $1.77 billion in losses were due to BEC fraud last year.
Big Tech and Expanding Probes: A Federal Trade Commission (FTC) investigation into the biggest five tech companies in the U.S. has broadened to examine acquisitions. Among those firms in the crosshairs: Apple, Amazon, Facebook, Alphabet and Microsoft. Those companies have been asked to turn over documents to the FTC related to acquisitions spanning 2010 to 2019.