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All businesses are affected by Covid 19

All businesses are affected by Covid 19

Wednesday 19, 02 2020
Both major and minor businesses have announced the difficulties due to the sluggish business situation and the declined revenue after the Lunar New Year,

Which was also the time of acute respiratory infection due to a new strain of corona virus (Covid-19) outbreak in Hubei, China

Empty and gloomy fashion shops

V-SixtyFour's fashion retailer stores - Viet Thang Jean Co., Ltd. (Vitajean) are going through sluggish days in the first half of February, although this is a special time because of Valentine’s Day. Mr. Phan Van Viet, Chairman of the Vitajean Board of Directors, said the V-SixtyFour brand revenue in shopping centers during the days of the disease caused by Covid-19 has been reduced by 80% over the same period last year.

This decline of Vitajean sales, excluding the factor that after the Lunar New Year the number of fashion shoppers is normally low, have been negatively impacted since the outbreak of the disease information. In the anxiety of the disease outbreak, consumers rarely go to crowded places, so the shopping centers become deserted, making the inner fashion stores also fall into a gloomy situation.

This situation is similar in most fashion stores, accessories, souvenirs, cosmetics, perfumes ... in big shopping centers. Many salespeople at Vincom centers, such as Takashimaya in district 1, complained that there were many times during the day, the number of visitors coming in and out of the shops was less than the number of the sales staff. The period after the Lunar New Year holiday is the low season for fashion items and accessories; In addition, the impact from information about the Covid-19 epidemic has also caused the fashion retail business to be sluggish. According to Mr. Phan Van Viet, the V-SixtyFour brand now has several dozen stores in major shopping centers across the country.

According to Mr. Viet's calculation, the cost of renting premises at these centers accounts for 20-25% of total revenue (about 22% on average). With this business situation declining, the whole revenue of February and maybe even that of the first quarter will not be enough to pay rent for space. Other costs such as staff rental, electricity, product costs are worth mentioning. Notably, due to the lack of sales, the product will likely be redundant, leading to seasonal and out-of-date clothing, which greatly affects the company's operations.

Vitajean has sent recommendations to the management units of the commercial centers that V-SixtyFour rented premises to ask them to reduce the rent by half to jointly overcome difficulties in this unpredictable disease situation. In the context of these empty shopping centers, Mr. Phan Van Viet believes that the managers of the shopping centers will probably accept Vitajean's proposal.

​All industries are facing difficulties

Not only the fashion industry but many businesses operating in other industries have reported that the business in recent years is very difficult. A business specializing in providing food for some schools in the area of Ho Chi Minh City said that in addition to accepting losses in the first week (due to unforeseen circumstances), in the next vacation weeks of February, they could not do any business with the group of school customers.

In the segment of customers which are restaurants and bars, the number of orders is also reduced by 50% because these restaurants are also sluggish and have to cut down the amount of food purchased. According to a large enterprise supplying poultry eggs in Ho Chi Minh City, this kind of product is also affected. The sharp decline in demand has forced the company to cut prices of its fresh chicken eggs by 50% to cope with high inventories.

All businesses are affected by Covid 19

In fact, ever since the news of the acute pneumonia epidemic caused by Covid-19 occurred at the time of the Lunar New Year, many economic activities such as tourism, trading, and trading have been almost paralyzed, and even the daily activities of people have also been significantly disturbed.

At the meeting with the Department of Industry and Trade of Ho Chi Minh City on production plans of professional associations in the city in 2020 last week, representatives of some professional associations also mentioned the difficulties of member enterprises operating in the field of foodstuff, textile, footwear, rubber, plastic, etc. These associations are also facing difficulties due to the inability to sell products or the lack of production materials due to the heavy dependence on the supply in the Chinese market. According to Ms. Ly Kim Chi, Chairman of the Ho Chi Minh City Food Association, many businesses have reduced their revenue, so they need the City to support debt rescheduling and interest rate rotation to help businesses stabilize production and business in the fluctuation period.

If possible, she said, she could consider tax-free solutions for businesses directly affected. The enterprises proposed that the city also should come up with solutions to help businesses overcome the difficult period due to Covid-19 influence. Notably, the fields that are significantly affected are the services for the tourism industry. A businessman in Ho Chi Minh City who has a hotel in Da Lat said he had accepted the cancellation contracts because of this flu.

According to him, his hotel has long been used by group guests, of which Chinese guests account for only about 30%. However, not only Chinese but Vietnamese have also canceled reservations due to concerns about the Covid-19 disease. According to the businessman, not only at his hotel, but some other partners in Dalat are also facing similar difficulties.

Although Da Lat has not detected anyone infected with this epidemic, the gloomy tourism atmosphere has not been restored and businesses have to accept losses because of the cold climate (the condition for Covid-19 to exist) causing anxiety. Ms. Nguyen Thi Nguyen, Director of the Department of Culture, Sports and Tourism of Lam Dong, said that in February, according to statistics retrieved from 14 3-5 star hotels in the province, guests had canceled more than 10,000 rooms, resulting in a decline in revenue of other services.

Not only Da Lat but a series of other tourist destinations such as Nha Trang, Phu Quoc, whose business activities depend on many Chinese tourists are also struggling with the epidemic. In this difficult context, a number of businesses and business households have been flexible in business such as promoting online sales, home delivery or preferential promotions for customers to stimulate demand or partially remove existing difficulties. In addition to proposing supporting agencies and bank proposals to consider excluding interest at this time, some businesses are also asking suppliers and partners to share difficulties until the Covid-19 epidemic cools down.

>> Impact of novel coronavirus on Vietnam’s economy

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