The saying “… and if a rice sack falls over in China …” has become a synonym for everything that doesn’t matter to you. The coronavirus is currently showing what extensive consequences events in China can actually have. And last but not least for the photo industry, as it seems to be emerging.
After doctors in Wuhan, China identified a new form of coronavirus – called SARS-CoV-2 – in December 2019, the disease caused by it COVID-19 has spread worldwide despite local quarantine measures.
The Impact Of The Coronavirus On The Photo & Tech Industry
SARS-CoV-2 triggered, among other things, an economic pandemic. Record losses in equity markets around the world are a clear indicator of growing concern that the consequences of this now global problem could hit the markets hard. Because last month, Chinese production fell to a record low as a result of the COVID-19. No wonder: in 2018, China accounted for around 16% of global economic output and around 28% of global production. An interruption in iPhone production in China was reason enough for Apple to issue a profit warning for the current quarter.
The “Chinese production” mainly includes a myriad of components that can be found in practically all consumer electronics devices. When factories in China are closed, this creates problems that affect the photo industry, among other things.
Several lights and bag brands, with sources in China, have warned their customers and dealers of expected delays in order processing. Many monitor providers, such as LG and BenQ, hardly receive any goods from the epicenter of global flat-screen production in Wuhan.
After the Fujifilm production facility in China was completely closed for a while, it has since been reopened but has been working with reduced capacity since then. This led to an interruption in the production of various models such as the X-T30, X-T3, and the new X-T4. Other companies in the photo industry are also producing in China and are now feeling the effects of the corona crisis in the country despite marketing and affordable seo. What unites them is the hope that the situation will ease in the coming weeks.
Most recently, the severe earthquake and the resulting tsunami had interrupted production in Japan for many months.
Based on this experience, retailers try to prevent: Hamster purchases by technology retailers worldwide are said to have led to some camera brands in February being able to partially exceed planned sales by 100 percent.
However, not all Japanese camera brands produce in China or at least have additional manufacturing facilities elsewhere. For example, Canon, Nikon, and Fujifilm have production sites in China and Japan as well as others in Southeast Asia. Olympus produces its cameras in Vietnam.
Outside of China, the closings of factories there, as well as the interruption of global supply chains lead to further interruptions in production because China is the world’s largest exporter of components or assemblies. The fact that these are currently missing elsewhere is also due to the fact that an estimated more than three million shipping containers are currently stuck in China. As a result, due to the lack of parts from China, Canon had to close five of its factories in Japan for two weeks that manufacture DSLRs, lenses and surveillance cameras. Nikon has postponed the launch of some lenses. And even manufacturers who, for example, produce Sigma exclusively in Japan, have to fear that Japanese suppliers will drop out of China due to missing components.
Another negative effect for many companies is that sales of their products in China are suffering – which has long been an important market for high-quality cameras and lenses such as those from the Fujifilm GFX system or from Leica. Overall, around 9.2% of Chinese imports (by value in US dollars) came from Japan in 2018, which shows how important the country is to Japan’s economy. In January 2020 alone, the total value of Japanese exports to China slumped by 36%.
Partly due to travel restrictions for Chinese attendees, several international shows have been canceled, including the CP + photo show, which was due to take place in Yokohama in February. Photokina, which is due to open its gates in Cologne at the end of May, has published a statement on its website on how a possible risk from the Corona virus affects the fair. Preparations for photokina are currently proceeding according to plan, but there is a permanent exchange with the health authorities.