Corona Trade Impact: For most, no supply chain scare yet; banqueting takes a hit

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March 11, 2020 4:30 AM

Meanwhile, as consumers scurry for protective gears, online (B2B) platform for medical equipment Medikabazaar has seen about 15 times increase in sale of masks in the last two months against the period before the outbreak.

The trade impact of coronavirus for India is estimated to be about $348 million, according to a recent UN report. (Representative image)The trade impact of coronavirus for India is estimated to be about $348 million, according to a recent UN report. (Representative image)

With over 40 people affected by coronavirus in the country, over 29,000 under watch, and global cases of infected patients surpassing over a lakh, companies are gearing up to mitigate bottlenecks in the supply chain. Most firms FE spoke to, however, said they have adequate inventory of products to cater to demand in the near-term and do not foresee immediate impact on sales.

Nipun Marya, director, brand strategy at Vivo India, said the company has been able to meet demand of consumers so far by ensuring consistent stock of most models. “Even in the past, we have borne the cost due to a change in duty, inflation, policy changes etc, and shall continue to do so as much as possible,” Marya said without elaborating further.

Vijay Babu, VP, home appliances at LG Electronics India, said with the onset of summer the company is looking forward to introduce a new range of products in the categories of refrigerators and air-conditioners. “Regarding the supply chain for our products, we have sufficient stocks according to our current manufacturing reports. The peak season is in April which we are awaiting,” Babu said. Babu added that he does not see any major impact on business.

Bishan Jain, director at Mumbai-based Goldmedal Electricals, said the company envisages the possibility of some impact on LED products if the situation in China fails to improve. The firm sources components for LED products from the country that is the epicentre of the virus that has claimed more than 3,000 lives worldwide. “We are closely monitoring the situation and looking at all possible alternatives and options. At this point, the effect on retail sales has been negligible. It is unlikely that prices of our products will increase just yet,” Jain said. Goldmedal manufactures its own range of products including LED lights, wires, cables and home automation systems.

According to reports in international media, factories in China are gradually resuming work. China is a major supplier for both final products as well as the raw material used in domestic electronics industry. A paper by industry body CII said only a mere 10%-12% of the components used in mobile handset industry are sourced locally. As much as 88% is procured from countries outside India, with China being a key exporter.

Havells India said about 95% of the firm’s sales are dependent on products manufactured out of its 12 factories in India. President Saurabh Goel said the company is in “a good position to ramp up production in the short period” should there be drop in supplies by other brands which are heavily dependent on imports.

Voltas, Whirlpool, Orient, Samsung and Bata did not respond to FE’s queries.

To contain the spread of virus, corporates have called off events. Xiaomi said it will not be holding any on-ground launch programme throughout this month in India. The company had earlier said that the extended shutdown in China is likely to have an impact on its supply chain, thereby affecting quantum of component supplies. The firm did not provide any fresh comment on whether it would be increasing prices of products.

Although people have limited venturing out in crowded spaces, retailers are yet to feel the pinch. Anurag Katriar, president, National Restaurant Association of India (NRAI) said no major impact is visible on dine-in and delivery sales. However, the banqueting segment has taken a hit as international travel curbs have led to a spate of event cancellations.

Meanwhile, as consumers scurry for protective gears, online (B2B) platform for medical equipment Medikabazaar has seen about 15 times increase in sale of masks in the last two months against the period before the outbreak. Vivek Tiwari, founder and CEO, said the company has sold around half a million masks last month in the domestic market.

A significant proportion of medical stores in New Delhi including big departmental chains like Big Bazaar have run out of branded sanitizers.

The trade impact of coronavirus for India is estimated to be about $348 million, according to a recent UN report. The chemicals sector is expected to take the biggest hit of about $129 million, electrical machinery at $12 million and automotive sector at $34 million among others.

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