Money makes the world go round.
But occasionally something big and unexpected happens
that slows or even forces businesses to a halt.
Most recently, it was a novel coronavirus
that originated from here in Asia.
The disease, known officially as COVID-19,
has spread to here in Europe, the Americas and beyond.
And now with all our economies so closely intertwined, industries of all shapes
and sizes are feeling the effects, wherever they are.
So as governments and companies take precautions
to limit the spread of the disease, how are industries adjusting?
We met with a few people who gave us an early look.
I start our journey by visiting London’s bustling Chinatown.
I want to find out if businesses in the iconic destination
have been affected by the viral outbreak.
I would say it’s one of the most busy restaurants at Chinatown.
Really?
That’s Derek Lim, manager of the neighborhood’s popular restaurant, Dumplings’ Legend.
Like weekdays we serve around seven, eight hundred.
Seven, eight hundred?
A week?
A day.
Yes.
Since the first few cases of coronavirus were recorded in Europe in January,
he says he’s seen business drop by as much as 50%.
Tourists is close to zero now.
I would say, like, per minute, just walking past, I think, less than 50.
Now tourists is almost stopped.
Mere doors away from Dumplings’ Legend, I meet up with David Tang,
the Vice President of the London Chinatown Chinese Association.
David told me Chinese restaurants in several countries are experiencing
similar issues for a fear he says is “unfounded.”
Because the virus is originally from China,they feel that by going to Chinatown
you have more chance of catching the virus, which is not true.
It’s not just Chinatown in London, you’ve got Chinatown in Italy,
Paris and the whole Europe.
And not just Chinese restaurants in Chinatown.
And if things stay the way they are, what will happen?
A lot of owners, restaurant owners will not be able to carry on.
They will not be able to afford to pay the current rate and
rent unless the rates and rent are suspended.
He says restaurant workers, from managers such as Derek Lim
to waitstaff to delivery workers, are all impacted.
They deliver fruits, vegetables, seafood.
And now they’ve been told to take time off
on a rota basis because they're not as busy as before.
And it’s all because of the coronavirus?
All because of the coronavirus problem, yeah.
I work here every day, I spend 12 hours here a day, I have my lunch here,
I have my dinner here, and I don’t wear masks.
See, I’m still healthy. So I don’t think that there is anything to worry about.
So with less people heading into physical restaurants,
are food delivery services feeling the benefit?
Turns out it’s not as simple as it seems...
Rita Zahara is the CEO of an online food delivery service
operating in Singapore and Hong Kong.
We’ve heard the news of how the brick-and-mortar businesses
have seen a drop of 20 – 70% in their business, in their sales revenue.
But all these people still need to eat.
That decline has translated into a greater demand for food delivered
straight to your doorstep, but Rita says the business must still take precautions.
So we are very particular during this time, that there should not be any lapses in safety measures.
It’s not just the food, but it’s the entire supply chain.
And while it’s been a field day for food delivery services in Singapore,
the outbreak in Hong Kong poses a different challenge.
What we have done is to shrink the manpower and the size in Hong Kong,
and to suspend the business in Hong Kong for a while,
until the safety measures for the staff and crew and the customers goes back
to a certain level of assurance.
Likewise for food delivery giant Deliveroo.
We have seen an uptick in delivery volumes in Singapore as well as in Hong Kong.
Having said that, this is a very challenging period of all stakeholders.
Consumers, restaurants, riders.
Making sure that we have enough riders at the right place at the right time
to be able to meet the increase in demand.
The Singapore government will be giving food delivery workers
about a 70 U.S. dollar daily allowance if they are placed under quarantine.
Deliveroo and its competitor Grab will also provide riders with a one-off allowance.
Around 1,000 restaurants in Hong Kong are getting a 20%
decrease in their commission for one month.
This is the commission that Deliveroo takes from the restaurants, right?
So this helps them during times of stress.
As we monitor the situation, and as it progresses,
we will put more measures in place.
The global luxury sector is particularly vulnerable too,
due to its heavy dependence on Chinese tourists.
Chinese consumers are the fastest growing luxury shopper demographic in the world
and up to 70% of them make their purchases overseas in
major cities like Paris and here in London.
But now 70 million of these potential shoppers are in quarantine.
Let’s find out more.
I met up with Elspeth Cheung, an analyst in the luxury industry
at a popular shopping hub, Bond Street.
She’s been monitoring consumer patterns in this sector closely,
especially since the onset of COVID-19.
That was definitely the Chinese Dream that the government promoted a few years ago.
So, it’s a very secure country, a very promising future.
So for the younger generation they see that for this,
we don’t have to save, we can spend whatever we can.
Chinese consumers are expected to make up more than
40% of global luxury spending by 2025.
In 2018, nearly half of Chinese luxury consumers were under the age of 30.
But Elspeth says the coronavirus outbreak could change this trajectory
by creating economic uncertainty and dampening the spirits of big spenders.
We have talked to a lot of consumers what they’re feeling about this epidemic.
Consumers in China right?
Consumers in China.
And what they say is, around 21% of people are telling us that
they will reduce their luxury spending after the epidemic.
This is a very important change of mentality.
Luxury companies have been particularly hit in China, as consumers opt to stay home.
Many have been forced to close stores.
Burberry announced that it has already shut down more than a third of its stores in mainland China
while Capri, the owner of Michael Kors, has closed 150 of its 225 stores in the Asian country.
People will come out, they will start going to the stores again,
but now since they’ve developed this new lifestyle of living their life online.
So I think it’s more important than ever that brands have to learn how to
engage consumers in both offline and online setting.
One thing’s for sure. Travel, whether for business or recreation,
is already feeling the pinch, with many jet-setters choosing to postpone or cancel their trips.
For the first time since the global financial crisis, air travel is set to decline in 2020.
Before the outbreak, demand in this industry was projected to grow by 4.1%.
It is now set to contract by 0.6%.
That slump could amount to more than $29.3 billion in lost revenues.
The most affected countries by the tourism slump will be in Southeast Asia,
which will see a drop in the number of Chinese visitors by 30 to 40 percent.
In Asia Pacific, Thailand has been cited as one of the countries that will be most affected
by the decline in tourist arrivals.
In 2018, tourist spending accounted for 12% of the country’s GDP.
Down south in Singapore, where I am, smaller groups of travelers
can still be seen gathering at the typical tourist landmarks.
I caught up with Jean Wang, a Singapore-based tour guide, to find out more.
I have been a tourist guide for more than 40 years.
Wow, okay, that’s a long time.
I have memories of SARS, I remember that, we were, I was jobless for like, eight months.
So I hope it doesn’t go that way this time.
Severe Acute Respiratory syndrome or SARS
claimed the lives of nearly 800 people back in 2002 to 2003.
33 of those deaths were in Singapore.
Jean says authorities learned a lot from the epidemic.
We just make it, as calmly as possible, as matter-of-fact as possible,
we can still visit that attraction, if that attraction is open.
Some attractions, they are not comfortable with large crowds at the moment.
But for now, there is still demand for Jean’s tours.
There are tourists who have booked in advance, and they’re here to enjoy the tour.
That has not changed, the spirit of the tourists themselves.
Tourism analyst Dr. Wong King Yin believes the industry will bounce back fast.
Many industry players may try to have some promotions,
maybe trying to attract the local residents.
The tourism industry is known to be very resilient.
When we look at the numbers in 2003 after the SARS outbreak,
they can pick up really fast, within five to seven months.
Travel restrictions have also seriously affected event organizers on this side of the world.
Major events have been postponed or even cancelled
for reasons associated with the coronavirus.
When an event is cancelled or postponed,
the effects ripple across other businesses, including airlines, hotels and restaurants.
Take the world’s largest mobile event, Mobile World Congress, as an example.
Organizers made the call to cancel it for the first time in 30 years
after major tech companies including Amazon, Nokia and Sony
pulled out for reasons associated with the coronavirus.
The four-day event, which attracted more than 109,000 visitors in 2019,
created 14,000 part-time jobs for Barcelona
and brought in revenues of more than a half a billion dollars.
Other high-profile events like the Geneva Motor Show
and Facebook’s developer conference F8 followed.
So how are event organizers responding?
I visited International Confex, a conference
that gathers event organizers around the world to find out.
Some people are taking an ultra-cautious line
and every organizer has the right to do what they think is best.
In Barcelona, that was top of mind for some of the American corporates,
that the Chinese, some of them will not be able to come
and therefore the rationale for doing business is weakened.
The most high-profile event at risk is the Summer Olympics,
scheduled to be held in Tokyo.
The Games, which have already sold more than 3.6 million tickets,
could be in jeopardy as the number of infections in Japan continues to rise.
Athletes today they are super charged animals.
I imagine some of them and their trainers take decisions months out.
There is that anxiety I’d imagine that might play on organizers’ minds.
While rumors have swirled that the Games could be cancelled,
the International Olympic Committee has maintained that the event will go as planned.
The IOC remains fully committed to the success of the Olympic games Tokyo 2020.
I couldn’t see athletes flying into a country that was locked down with coronavirus.
There are still a lot of unknowns about how the spread of the coronavirus
will affect the global economy in the long term.
But experts are advising businesses to start thinking about their recovery plans now
and to better prepare for any potential outbreaks in the future.
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