Shows Axed Concerns Over MWC As Coronavirus Spreads
The coronavirus has struck the trade show sector with the Canton Fair where Australian distributors source new products for the appliance and consumer electronics markets cancelled also tipped to be cancelled is the Hong Kong Fair in April there is also concern about Mobile World Congress which is attended by thousands of Chinese nationals and some of the biggest smartphone Companies in China.
Overnight Nintendo admitted that there will be supply problems for the Nintendo Switch with the Japanese Company blaming the Coronavirus.
Reserve Bank governor Philip Lowe said earlier today that the economic risk of the coronavirus is greater than SARS, as the infection rate surges and countries shut their borders.
Dr Lowe said there were hopes the number of cases would fall and the economy would bounce back but he said, “it is possible the number of cases escalates and so does the interruption to China’s economy”.
The number of cases of the virus has risen by up to 20 per cent each day this week. There are now almost 30,000 confirmed cases from the flu-like disease, including 14 in Australia. On Monday there were 14,550. Of those, 565 people have died and 1382 have recovered.
Dr Lowe said the response from China compared to the severe acute respiratory syndrome epidemic in 2003 is “much more extensive”. The SARS epidemic cost the global economy $60 billion and hit Australian tourism and export sectors, but China only accounted for 5 per cent of global GDP at the time. It is now worth more than triple that.
Among the Companies set to be hit are Chinese TV manufacturers including Hisense and brands such as JVC, Blaupunkt, and even Sony who source their TV from Chinese factories.
Hisense is set to be one of the hardest hit with the Company already reeling from oversupply of TV’s that were set to be sold in the Chinese domestic market during the Lunar New Year holidays when up to a third of all TV’s in China are normally sold.
Insiders are telling ChannelNews that some of these TV’s could be reconfigured for International markets.
Also set to be hit is Huawei who were already reeling from a ban by US and Australian Federal Governments.
Another Company facing major problems is Oppo and Realme who were banking on 2020 to grow sales of their smartphones.
Chinese factory executives have said that the ban by the Chinese Government on Companies reopening their factories could have a major impact and any prolonged epidemic will take a heavy toll on both the supply chain and consumer demand, they claim some retailers and even local distributors who rely on Chinese factories to manufacture goods for retailers could go broke because of a lack of supply.
Key to many of the Chinese smartphone brands is the Chinese domestic smartphone market which is now facing a major fall in shipments in the first-quarter 2020, and in a more optimistic scenario, smartphone shipments to the China market will drop 9% if the outbreak can be contained by the end of February, according to some observers.
This is bad news for everyone involved in the smartphone market, including vendors of mobile processors claims DigiTimes.
Questions are also being raised about Mobile World Congress in Barcelona a show where several big Chinese brands exhibit. It’s also a show thats attended bt thousands of visitors from China.
LG and ZTE have already cancelled plans for the show with observers claiming, it’s hard to imagine there won’t be further disruption.
MWC 2020 was set to feature an even larger Chinese contingent than ever before, with all of the country’s major smartphone brands planning to showcase their offerings.
So far the Spanish Government has not said whether they will actually let Chinese nationals fly into Barcelona with several Australians telling ChannelNews that they will not attend the show if Chinese nationals from Companies in affected Provences are attending the event.
ChannelNews has decided not to attend this years event because of the Coronavirus and the risks associated with an event like MWC where so many Chinese Companies are exhibiting.
Oppo, Xiaomi, TCL Vivo, and Realme all claim remain intent on attending.
Huawei is planning to make announcements at the show despite recently cancelling its Shenzhen developer conference.
Qualcomm and Chinese Companies Lenovo, and Motorola also plan to send executives to MWC.