Coronavirus chaos: How Amazon could lose billions as China remains in turmoil

One huge company set to be hit by coronavirus woes is Amazon, which is now stocking up on Chinese products in a bid to ease the potential damage that could ensue from travel restrictions. The tech company was forced to increase its intake of Chinese-made products with sudden, off-cycle orders, a leaked email obtained by Business Insider claims. In the message, it is stated that the move is preparation for possible supply chain disruptions due to recent global events originating in China.

Despite Amazon telling Reuters this week that its logistics had not been compromised by the growing coronavirus crisis, it appears the company owned by Jeff Bezos is still fearing the worst.

To “ensure shopper experience and seller account performance,” Amazon also published advice on its Chinese website for third-party sellers bracing for the market impact of the coronavirus outbreak.

The corporate giant has said the move is only cautionary, but with China’s economy, transport and other infrastructure ground to a halt, big losses could be just around the corner.

This is because a substantial 40 percent of Amazon’s sellers on its US market are from China, where factories have become dormant amid fears of coronavirus spreading.

Employees in the world’s most populated country have either refused, or have been unable to work and many have stayed at home, causing local and larger businesses to see a drop in custom.

Amazon’s total revenue in the country for the last quarter was a staggering £67billion, according to Statista, meaning the damage done to the Chinese economy as a result of coronavirus chaos will inevitably hit the multinational company – particularly if the Chinese government persists with strict quarantine measures introduced as a result of the outbreak.

While Amazon is the largest internet company in China, competition is fast emerging.

China’s equivalent of Amazon – Alibaba – made around £18billion in total revenue, but it also beat Mr Bezos’ company for operating profits in the last quarter.

With its hegemony being challenged, the coronavirus comes as yet another unwanted hurdle for Amazon to overcome.

Along with Sony, the company has also pulled out of the Mobile World Congress this month.

Amazon said in a statement: “Due to the outbreak and continued concerns about the new coronavirus, Amazon will withdraw from exhibiting and participating in Mobile World Congress 2020.”

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Another corporate heavyweight – Apple – has also released concerning news.

The company has stated that it will likely fail to meet its quarterly revenue forecast because of lower iPhone supply globally and lower Chinese demand as a result of the coronavirus outbreak.

It initially said that it expected to report net sales between £45billion to £51billion in its fiscal second quarter, but did provide a new forecast.

The concern in China remains prevention of further loss of life, with the overall count of confirmed infections up to 72,531 and the number of deaths to 1,870.

Amazon UK told “We are monitoring developments related to the coronavirus and taking appropriate steps as needed.”

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