Amazon In Japan Could Face Inventory, Production Impacts From Coronavirus

The coronavirus (COVID-19), which began in China, has far-reaching impacts that extend beyond health, with a wide range of economic effects in sectors from travel food firms to Amazon marketplace sellers and the workforce in Japan.

With the coronavirus causing a drop in global and domestic aviation travel, U.K. travel food firm SSP cautioned about a 50 percent drop in February sales in the Asia Pacific region, Reuters reported. SSP indicated that both domestic and global air passenger numbers in China were down 90 percent from a year prior. Hong Kong passenger numbers were down approximately 70 percent. SSP handles 1.5 million clients each day in train stations and airports in 35 nations.

Meanwhile, Paolo Gentiloni, the European Union’s economics commissioner, has indicated that it is premature to determine the impact of the coronavirus on the economy of the bloc, Reuters reported. Gentiloni said “an assessment and a serious forecast is not yet possible.” Northern Italy experienced an outbreak last week. That event elevated concerns of a bigger-than-forecasted impact on the economies of Europe and the world as a whole.

In other news, Amazon sellers who developed businesses around the inexpensive and efficient manufacturers of China are reportedly in a tough position due to the coronavirus as the contagion closes production facilities, The Wall Street Journal reported. A number of sellers are reportedly increasing prices to make sales slower and trying to move production to other nations. Amazon’s technology reduces the rank of out-of-stock merchandise. A kitchen products merchant said, “I don’t think the Amazon platform has seen such a massive amount of inventory problems as we are about to see.”

On another note, Papa John’s has temporarily shuttered approximately 50 locations in China because of the coronavirus, Bloomberg reported. The quick-service restaurant (QSR) chain has a total of 210 stores in the country. A number of those stores are in public places as well as malls that have closed. At the same time, however, it was noted that the company’s same-store sales in North America increased 3.5 percent last quarter and came out ahead of the forecasts of analysts.

In other news, the coronavirus has caused sporting events to be delayed, and it could lead to the cancellation of the upcoming Tokyo Olympic Games, the Financial Times reported. An International Olympic Committee spokesperson said, however, that “we are still absolutely heading for the games on July 24” but noted that organizers of the event are watching the situation. Analysts, as well as economists, in Tokyo have said they have been swamped with investor requests during the past day to determine the financial effect of a cancellation or delay of the games.

And, companies in Japan are being urged to have staff work from their residences as a preventative measure for the coronavirus, Reuters reported. The country has 160 cases of COVID-19 in addition to 691 found on a cruise ship, the Diamond Princess. A government plan to combat the disease seeks to have firms recommend remote work and shifts to be staggered. Those who have signs of a fever or cold were told to remain in their homes. Organizers of events were told to think about if they should move forward with their arrangements.