09 Mar The Shifting Economic Wake of the Coronavirus
Posted at 09:00h
in Business Blogging
The outbreak of the novel coronavirus is daunting, not only to the lives of human beings but also to businesses that currently base much of their production of goods and trade through China. The impact of the virus has caused many Chinese factories to halt operations and require employees to stay home. Goods manufactured in China with the intent of being sold in the United States are currently being intercepted and set aside as a safety precaution despite ongoing arguments that the virus is not spreadable through the mail. Businesses such as Amazon are voluntarily halting the distribution of Chinese products in an attempt to prevent the spread of the virus further. The chain reaction of actions like this will most likely continue until more is known about the virus and how it’s transmitted. The negative repercussions of the coronavirus to the stock market and e-commerce businesses are already evident.
Stock Market Sell-Offs
The stock market is taking a huge hit from the closure of Chinese factories. Large companies continue to see mass sell-offs based upon the effect of factory closures and predictions of conditions getting worse. Although some Chinese factories are attempting to begin production again, the setbacks have already made their mark. This massive market slide due to the coronavirus is undoubtedly a debacle, however, is recoverable if the proper steps are taken after viewing the outcomes in the next few weeks and months. Although it is unpredictable what will result from the virus, not only financially but for worldwide health, the effects on the stock market so far are well known.
Apple has taken a huge hit as the iPhone, which has components that are primarily manufactured in China, has suffered a massive drop in sales. Furthermore, the demand for iPhones within China itself have dropped drastically, which has a large effect on overall sales as China is one of the largest buyers of Apple smartphones. Although it is too early to tell whether the tech monarch’s earnings will suffer on a greater scale, it is evident that the coronavirus has played its part in affecting the largest centerpiece in U.S. and worldwide technology consumerism.
Walmart has also seen a significant drop in earnings and revenue in the recent wake of the shutdowns of factories that produce games, toys, and clothing for the enterprise. Walmart’s quarterly revenue missed its target by 850 million, and although this may not be directly due to the outbreak of the coronavirus, the effects of the virus on the production of goods for Walmart in the near future will most likely be negative.
The Effect on E-Commerce Businesses
One of the biggest markets for E-commerce in existence is Amazon. This is well known, and is also disheartening to the fact that Amazon has been greatly impacted by the outbreak of the coronavirus through halting of manufacturing, production, and trade with China on a vast majority of products. With roughly 200 million people utilizing Amazon monthly for online purchases, and many of those purchases being on products created fully or in part by Chinese manufacturers, the closure of factories and stockpiling of Chinese made products is having a huge effect on buyers and sellers alike.
Many E-Commerce businesses are beginning to reduce the amount of advertising and promotion they do for their products that are sold via Amazon in an attempt to avoid running out of stock. Amazon has been reaching out to the third party sellers of products manufactured in China to inform them of the outbreak, its impact on the market, and to gain insight into whether it is affecting their e-commerce business. The feedback provided by e-commerce businesses that utilize Amazon will help determine the trickled down effect of the virus on the direct sellers and buyers.
As factory operations halt in many providences in China, consumer behavior, digital advertising, and online businesses are all shifting. Although the vast majority of consumer good sales are taking a large hit, online sales of food and supplies, hygiene products, and health products have actually risen. Despite the rise in sales of these types of products, most products, regardless of what they are, which are manufactured in China are suffering a pause in sales.
What This Means for E-commerce Advertising
A shift in advertising for E-commerce products will begin. Sellers might have to determine which products they sell are manufactured in China if they don’t know already, take a current inventory of products, and advertise in a way that keeps in mind scarcity and priority of those items. Marketing strategies for many businesses may have to be redesigned or altered in accordance.
Once Chinese production begins again, and sales start to rise, focused advertising in the future can help to ensure that E-commerce businesses can continue to reach their sales and branding goals. Digital marketing continues to be the best form of advertisement, and strengthening advertisement efforts in the coming months will be important for all businesses. Competition in advertising is shifting on certain platforms, and many businesses are going full force with their marketing campaigns due some uncertainty of the future. Advertising in general, however, may have to be strengthened for all businesses and products moving forward, regardless of if they have ties to China.
How To Strengthen Online Advertising
Advertising for products and services can be strengthened in a number of ways. Social media marketing, email marketing, and business blogging are all ways that a business can ensure that their products, services, and relevant information reach their target audience.
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