Asia Business Economics Health

Small To Medium Scale Businesses Are Placed On Hold Due To Virus

Many small to medium scale companies throughout Asia and Europe are feeling the impact of the coronavirus on the economy. Many business storage facilities in the U.K. facilities are filled to the ceiling waiting for dispatch.

In Korea, companies that produce packaging boxes in Incheon have recently lost 25% of their sales. Because domestic companies exporting to China have reduced box orders. “This situation has significantly reduced exports to China, reducing the number of box orders,” said Kumo, the company’s CEO.

How the coronavirus is impacting the global economy

Recently, the spread of new coronavirus infections is rapidly increasing the number of small and medium-sized enterprises that are suffering from economic hardship. The SMEs conducted an emergency investigation against 250 small and medium-sized companies that have dealt with China or established subsidiaries in China. As a result, 34.4% of respondents said they were directly hit by the situation.

The supply and demand disruption was the highest at 56.4%. As the prices of some raw materials, which are difficult to supply and demand, rise, the burden on the companies is also increasing. As the demand for disinfecting products increased due to the spread of new corona, the price of ethanol, a raw material for detergents, jumped. Even if there are funds to produce disinfecting products, there is still a need to secure ethanol as a raw material to go on with production.

In Japan, auto parts vendors are also concerned about the lack of inventory due to prolonged events. Chairman of the Japan Automobile Parts Sales Cooperative, said, “In recent years, the new corona has reduced the industry’s sales by 20 to 30% compared to normal.”

The difficulty of small business owners is more serious. Most of the small business owners are experiencing a drop in sales due to the reluctance to go out or gather due to concerns about coronavirus infection. Recently, a small business association surveyed 1092 small business owners and found that 97.9% of all respondents said their sales fell due to the new corona. The decline in sales was also large. 44% of respondents (480) said their sales fell more than 50%. 27.2% (296) answered that sales were reduced by 30-50%.

61.4% of respondents (667) responded indefinitely due to the indefinite cancellation for various gatherings, events, and travel. Also, 22.5% (245) of respondents said they are suffering from a decrease in the floating population because of the new corona definite path of movement.