Coronavirus outbreak: Amazon sales could be impacted
The outbreak could have a surprising impact on Amazon's sales
China's e-commerce industry has boomed since the country's Severe Acute Respiratory Syndrome (SARS) outbreak killed almost 800 people in 2002.
As a result of this exponential uptick on e-commerce business, Wuhan's new coronavirus outbreak — which has killed a total of 25 people so far — could have a positive impact on online consumer spending and companies like Amazon if the virus doesn't spook people into storing their cash.
"The direct effect of coronavirus on Amazon’s sales is likely positive to the extent shoppers stay at home rather than frequent brick-and-mortar businesses," Kerry Murdock, editor and publisher of online e-commerce magazine Practical Ecommerce, told FOX Business. "Indirectly, coronavirus could negatively impact all businesses — Amazon included — to the extent [the virus] spooks consumers, prompting them to hang on to their money,"
A man holds an Amazon Prime package on March 20, 2018, in Berlin, Germany. (Thomas Trutschel/Photothek via Getty Images)
"A disruption in the availability of China-manufactured goods could eventually impact Amazon if resellers and direct-to-consumer manufacturers cannot obtain the inventory," Murdock added. "Amazon’s sales in China are small and immaterial to the company’s overall top- and bottom-line results."
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Amazon and other e-commerce giants have already experienced a significant uptick in mask and thermometer sales. Online retailers such as Taobao, Suning and JD.com promised not to let merchants raise the prices of these in-demand products while people are in need. Alibaba said it would subsidize mask products to ensure customers can buy them "at reasonable prices," the South China Morning Post reported.
UBS Global Wealth Management Chief Economist Donovan said in his Thursday economic briefing that social media, however, could scare the public about the scope of the virus and therefore hurt sales.
"Compared to 17 years ago, online spending is more significant," Donovan said. "That reduces the economic impact of the virus. However, most economic damage from a virus comes from fear. Social media is far more widespread today. We know that social media spreads fake news farther and faster than it spreads the truth."
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People wear masks on a street in Hong Kong, Friday, Jan. 24, 2020, to celebrate the Lunar New Year, which marks the Year of the Rat in the Chinese zodiac. (AP Photo/Kin Cheung)
Conversely, the travel and tourism industries in the region have already been hurt by the virus. The Shanghai Disney Resort, for example, is shutting down in anticipation of a worsening outbreak, and a number of events related to the Lunar New Year have been canceled.
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The Hong Kong-listed Huanxi Media Group and Beijing Bytedance Network took an innovative approach to the virus's expected impact on public outings and announced Friday that they would show the premiere of their new film, "Lost in Russia," to fans online.
The U.S. Centers for Disease Control and Prevention (CDC) raised its travel alert for the outbreak to a level 3 Thursday, meaning it is advising people not to travel to Wuhan or any nearby areas where people are at risk of contracting the virus.
