At Payoneer, we have been keeping a sharp eye on the coronavirus. Like much of the world, the epidemic has hit us personally. To all of our customers, partners and team members in China who have been impacted by the virus, we’d like to send our support and prayers for a speedy resolution to this global health emergency.
With some 87,000 infections and more than 2,900 recorded deaths, the virus’s repercussions are being felt worldwide, threatening not only the health of millions of people, but also the global economy. This is why we thought it appropriate to break down coronavirus’s potential impact on cross-border eCommerce.
This topic is especially relevant now, as Lunar New Year celebrations have ended and hundreds of millions of people in the Chinese manufacturing, shipping and supply industries are hoping that they’ll be able to return to work – an unlikely prospect for many, given the Chinese government’s 14-day (the virus’s incubation period) quarantine policy for anyone who might have been exposed to the virus.
For eSellers, this is likely to mean additional disruptions to your business. Here, we want to outline the different measures being taken to contain coronavirus, the possible impact of the epidemic on your business and steps you can take to weather the storm.
In the absence of a coronavirus vaccine, governments and businesses worldwide have taken steps to stem the spread of the virus. This includes the United States, which suspended non-Americans travelling from China from entering the country and issued a mandatory 14-day quarantine for any American arriving from China. An additional 71 countries have implemented travel restrictions to and from China.
14-day quarantine notification for American travelers from China. Source: US Center for Disease Control.
On the business front, many international organizations are forcing any employee who might have been exposed to coronavirus to stay home for 14 days. Additionally, more than 70 airlines have either canceled or reduced flights to China – likely a significant blow to the industry, given the high levels of air traffic normally recorded to and from China.
It’s far too soon to tell whether these measures will successfully contain the virus until a vaccine is found. What is certain, however, is that the coronavirus outbreak in China, as well as dozens of countries worldwide, will continue impacting the eCommerce industry for the foreseeable future.
The outbreak of coronavirus and the subsequent disruptions to Chinese manufacturers reinforce a longstanding best practice for businesses: diversifying supply chains. While China is undoubtedly the largest low-cost manufacturing hub in the world, other countries, including Vietnam, Thailand, Indonesia, India and Malaysia, have strong manufacturing bases and the infrastructure to support export. Outside of Asia, Mexico has become a low-cost manufacturing hub for consumer products, including electronics and clothing/apparel.
For those businesses working with Chinese manufacturers, it’s reasonable to assume that any orders you placed with your suppliers will be delayed. Still, there are steps that you can take to help weather the coronavirus storm.
Source: World Health Organization
The devastating impact of coronavirus is likely to be felt for some time. While we are all anxious for a vaccine to be developed and a swift end to the epidemic, we’re also cognizant that business must go on. Payoneer works with sellers and suppliers all over the world and is uniquely placed to offer input and guidance as you look to diversify your supply chains and maintain business continuity.
To learn more about diversifying your business and paying your different global suppliers, please contact one of our customer service reps.
Editor’s Note: The original post was updated on 01.03.2020 for accuracy and comprehensiveness.
