When the Wuhan coronavirus first emerged, most payed it no mind. It was brushed-off as a minor issue that would be easily resolved. Unfortunately, it has now become apparent that this new virus is a lot more serious than we first believed it to be. With more and more cases appearing every week, paranoia is setting in with consumers; leading to negative consequences for businesses and the global economy.
In China itself we can already see major shops, restaurants, and tourist destinations closing their doors. Beijing has made the critical decision to extend the Lunar New Year holidays to 2 February in an attempt to keep people at home and reduce the risk of spreading the contagion.
Huge names such as Starbucks, KFC, McDonalds, and Disney have announced their intentions to temporarily close down; fearing that the large crowds they draw might provide a new avenue for infection.
With cases being confirmed in other nations like Japan, the US, Australia, and more; consumers around the world are beginning to worry as well. The result is a global slowdown in business and spending.
From what we can see, nearly all industries are being affected. Industries that usually draw in large crowds such and leisure and F&B are seeing much less traffic. Retail, which has been suffering due to the dominance of ecommerce, are seeing even less numbers now. Even ecommerce has taken a hit; especially since so many products today are being manufactured in China. It goes without saying that the travel and hospitality industry is also taking a big hit at the moment.
On the other hand, demand for hand sanitisers and surgical masks are increasing as consumers are scrambling to take preventative measures. It Pharmaceuticals are also likely to see an increase in demand. However, with a large majority of pharmaceutical production being based in China, paranoia might affect the final demand for such medications.
Analysts have predicted that the coronavirus issue is likely to last for months before being fully resolved. With the trade war between US and China still ongoing, the hit to the global economy as a result of the virus comes at an unfortunate time. As of now, businesses will have to adapt and persevere through this economic lull until consumers regain confidence.