Exclusive Lynk Expert Insights: The Economic Hit of Coronavirus

With the current coronavirus outbreak, China continues to remain a critical focus for businesses and operations worldwide. 
At Lynk, we have engaged with our leading experts from across various sectors to discuss key challenges, potential threats, and macroeconomic impacts posed by the coronavirus on not only China, but also major global stakeholders.

OIL & GAS 
Director of Liquefied Products of leading Chinese
petrochemical producer

How has the coronavirus impacted oil and gas production and the downstream industry?
“The downstream market is currently almost not operating and there is nearly no production going on, and the demand for the products is looking at a 50-60% drop since commercial use has dropped significantly. Also, the government is imposing measures to limit logistics and it is a barrier for business. In turn, it lowers the upstream factories’ productivity as well. We expect there won’t be much production going on for at least a month until mid-March”

E-COMMERCE
National Operations Manager of NYSE-listed Chinese retail platform

How has the coronavirus impacted the e-commerce industry?
“The virus is also affecting the outlets on our platform because it’s already selling at discounted prices. Some leftover stocks need to be further discounted making little room for revenue. Another problem is not being able to get supplies. This situation is expected to relieve slowly in the next quarter.” 

HOSPITALITY
General Manager of the hotel business of a Chinese online
travel agency

How has the coronavirus impacting the hotel industry?
“We have seen a downturn in the hotel industry in 2H2019, when some local big hotel chains had been selling their equity. Top 5-star global hotel chains might be able to survive through the epidemic, yet many of the 0-3 star hotels might not be able to face the pressure of the epidemic, especially those who are not in a hotel chain but an individual lodging business.”

AUTOMOTIVE
National Chief of New Media Marketing Department at top Chinese
automotive manufacturer

How has the coronavirus impacted the automotive industry and its budget on advertisement and marketing?
“The total advertising volume for us last year was about 3 billion yuan. At present, COVID-19 has not affected it much. There has not been news on the suspension of investment and reduction of production, but internal structure optimization will be carried out soon. It is estimated that sales volume is still slightly increasing, but the increase rate shows a significant downward trend compared with the previous year.

The performance of different markets is not evenly balanced. For example, sales in the Hubei area will definitely decline significantly because of the virus, but we estimate the sales in other regions will not fall sharply. Therefore, the structure will be optimized and adjusted, but there will be no intention to stop investment. In addition, we estimate the impact will last until April or May, and will not have a long-term impact. Our main platform for advertisement is Baidu.”_

ADVERTISING
Global Account Director of multinational advertising agency

Has the coronavirus impacted budgets across your client portfolio?
“Surprisingly not. Spend will remain flat at least in the short term across our portfolio of clients. However, you can expect certain industries will be impacted quite significantly. Airline budgets will take a hit whilst opportunistic antibacterial companies might increase their ad spends.”

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