Last week, we discussed the impact of COVID-19 on the tech market and it was tempting to feel some sort of relief as promising news surface about Apple reopening 29 of their 42 Chinese stores, more and more recoveries from infections were being reported, new infections coming down and production sites seemed to be gradually restarting again. But then the coronavirus impact on retail started to become a hard reality.
The following hits came from outside of China: Samsung had to close a mobile device factory in South Korea due to an outbreak, and in Vietnam, the Ministry of Trade warns about supply chain issues delaying smartphone production. And on February 21st, the outbreak in Northern Italy led to a shutdown of “red zones” one day later.
COVID-19 impact on production drags down global distribution market by –5% in the last 4 weeks
“The consequences of the Italian shutdowns and further spread across multiple countries already affect supply chains and distribution markets heavily,” says Tatjana Wismeth, GfK expert on Global Distribution providing supply chain insights. GfK’s Distribution Panel is evaluating these effects by tracking the sell-through of distributors to retailers and resellers on a weekly level.
Italy, as one of the most affected countries in Europe, is currently showing one of the highest declines in volumes. In the last 4 weeks, distribution markets in Italy decreased by –9% on average which results in over 828,600 sales less compared to the previous year period. Other European countries like Great Britain and France are following this trend – however, at a weaker pace with –4%, respectively –2%. Sector-wise, the IT industry is currently contributing most to this picture. For Telecom, the downward trend is not yet clearly visible as stocks at the distributors level currently seem to be cleared since the demand of retailers

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