The Worldwide Business Impact of the Coronavirus and How to - - PowerPoint PPT Presentation
A DUN & BRADSTREET WEBINAR The Worldwide Business Impact of the Coronavirus and How to Safeguard Your Supply Chain MARCH 16, 2020 Todays Panel of Experts Brian Alster Markus Kuger Andrew Wu General Manager Chief Economist General
MARCH 16, 2020
A DUN & BRADSTREET WEBINAR
Markus Kuger
Chief Economist Dun & Bradstreet
Brian Alster
General Manager Third-Party Risk & Compliance Solutions Dun & Bradstreet
Andrew Wu
General Manager Mainland China & Hong Kong SAR Dun & Bradstreet
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Brian Alster, General Manager Third-Party Risk & Compliance Solutions
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World Health Organization (WHO) has now declared the coronavirus outbreak a pandemic
performing ongoing analysis of cities and locations most impacted by government-enforced restrictions to determine supply chain and customer portfolio risks
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Source: World Health Organization, Esri | WHO; as of March 15, 2020, 4pm CET
CONFIRMED CASES OF THE CORONAVIRUS
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SUPPLIERS
In locked down cities and territories
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
26.2% 21.7% 11.6% 10.6% 9.8% 8.5% 7.1% 4.3% 0.2%
0% 5% 10% 15% 20% 25% 30%
BUSINESSES IN MOST IMPACTED LOCATIONS: DISTRIBUTION BY INDUSTRY
Source: Dun & Bradstreet; March 12, 2020
companies worldwide have one or more Tier 1 suppliers
companies have one or more Tier 2 suppliers
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16.4% 10.0% 9.3% 8.4% 6.2% 49.8%
GLOBAL HEADQUARTERS DISTRIBUTION OF BUSINESSES IN THE MOST IMPACTED REGIONS: TOP 5 COUNTRIES
USA France Germany Spain UK Others
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Source: Dun & Bradstreet; March 12, 2020
businesses in impacted areas have corporate ties throughout the globe businesses operating in impacted areas are branches or subsidiaries
headquartered elsewhere
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
21.8% 17.6% 4.8% 3.2% 2.6% 2.5% 2.3% 2.2% 2.0% 1.9%
0% 5% 10% 15% 20% 25%
Electrical machinery, equipment and parts Nuclear reactors, boilers and parts Apparel and accessories Furniture and related articles Plastics and articles thereof Vehicles; parts and accessories Optical and photographic equipment Iron or steel articles Organic chemicals Toys, games and sports requisites
TOP 10 EXPORTS TO THE WORLD FROM THE MOST IMPACTED LOCATIONS AS A PERCENTAGE OF TOTAL EXPORT VALUE
Source: Dun & Bradstreet; March 12, 2020
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Source: Dun & Bradstreet; March 12, 2020
86.4% 85.0% 84.7% 84.2% 75.5% 73.0% 69.5% 69.0% 65.7% 62.8%
Light Fittings Tableware & Household Articles Toys, Scale Models, Puzzles, and Parts Floor & Wall Covers Hand tools and parts Electric Water, Space, and Oil Heaters Plastic Articles TV Receivers, Video Monitors and Projectors Articles and Equipment for Physical Exercise Plastic or Rubber Footwear
U.S. IMPORTS FROM THE MOST IMPACTED LOCATIONS AS A PERCENTAGE OF TOTAL IMPORTS
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Develop a risk- based assessment process for your supply chain – both
Monitor your full supply chain – both Tier 1 and Tier 2 Understand and identify alternative suppliers – limit dependencies
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TOP PRODUCTS IMPORTED FROM CHINA AND POSSIBLE ALTERNA TIVE SUPPLIER COUNTRIES
Product Possible alternative supplier country
Electrical machinery, equipment, and parts Brazil Nuclear reactors, boilers, and parts Chile, Singapore Furniture and parts Mexico T
Mexico, Brazil Plastics and articles made of plastic Mexico, Brazil Motor vehicles and parts Chile, Colombia, India Apparel and clothing accessories Brazil, Canada Optical, medical, and surgical instruments Colombia, Brazil, India
Source: UN Comtrade and Dun & Bradstreet; February 5, 2020
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Markus Kuger, Chief Economist
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
“What we’ve actually done is utilize our supply chain data and we’ve found that over five million companies around the globe have a direct, or a second tier supplier in the impacted region, which really goes to tell you how impactful this has become.” –Brian Alster, General Manager, Third-Party Risk & Compliance, Dun & Bradstreet “A Chinese quarantine applying to roughly 60 million people – more than the population of Spain – interrupted routine business operations for almost every member of the Fortune 1000 list.” –Dun & Bradstreet "A special briefing issued by global business research firm Dun & Bradstreet analyzed the Chinese provinces most impacted by the virus, and found they are intricately linked to the global business network."
Besides supply chain impact, coronavirus pandemic is a severe demand shock Dun & Bradstreet has downgraded country risk ratings for several economies in response to the recent developments Several central banks have cut interest rates (including the US Federal Reserve and the Bank of England) Governments have announced fiscal stimulus packages and measures to help ailing businesses
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Oil prices dropped by more than 20% on 9 March (biggest drop since 1991) Other commodity prices also falling (except gold) Pandemic comes at a time when global economic headwinds were already high. Economies like Italy and Japan are probably already in recession with others to follow Stock markets are highly volatile with airlines, tourism, and banks currently seeing above-average drops in share prices Exchange rates: US dollar is gradually losing its interest rate advantage as the US Federal Reserve has cut rates, thereby creating upward pressure on currencies like the Euro and the Swiss Franc
ADDITIONAL FACTORS ADDING STRAIN TO SYSTEM
Andrew Wu, General Manager Mainland China and Hong Kong SAR
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
CURRENT CONFIRMED CASES
National Hubei Non-Hubei
CURRENT CONFIRMED CASES/SUSPECTED CASES/ CUMULATIVE CONFIRMED CASES
Current Confirmed Suspected Cumulative Confirmed
(Data as of Mar 12) (Data as of Mar 12)
Data Source: https://voice.baidu.com/act/newpneumonia/newpneumonia/?from=osari_pc_1 Chinese Only
MAR 12: Current Confirmed Cases: 13,607 Suspected Cases: 147 Cumulative Confirmed Cases: 81,003 MAR 12: National: 13,607 Hubei: 13,171 Non-Hubei: 436
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CURRENT CONFIRMED CASES BY PROVINCE CUMULATIVE CONFIRMED CASES BY PROVINCE
(Data as of Mar 13)
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
(Data as of Mar 13)
Data Source: https://voice.baidu.com/act/newpneumonia/newpneumonia/?from=osari_pc_1 Chinese Only
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City Lockdowns:
Chinese authorities implemented agile “social distancing” measures across the entire country to contain the spread of the coronavirus
Mar 9th
Low Risk Medium Risk High Risk
Mar 3rd RISK LEVEL IN HUBEI PROVINCE Low Risk
confirmed cases for 14 consecutive days Medium Risk
cumulative confirmed cases ≤ 50
cluster outbreak in 14 days High Risk
cluster outbreak in 14 days
Social Distancing in other regions: Self Quarantine:
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Data Source: Wechat Article
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
D&B China’s Efforts:
provided 10,000+ overseas medical suppliers directory to public
a free credit check offering to the public to help
trade risks as our contribution to battling the coronavirus in China China has rolled out perhaps the most ambitious and agile disease containment effort in history China is meticulously expanding business
precise approach that prioritizes regions
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2020 Migration scale index
(2020 CNY Holiday Travel Season)
2019 Migration scale index
(2019 CNY Holiday Travel Season))
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Shanghai Beijing Wuhan Shenzhen
Baidu Migration scale index reflects the size of the population moving in, and can be compared between cities
Data Source: https://qianxi.baidu.com/?from=shoubai#city=0 Chinese Only
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Intracity Transport Intensity Index:The index reflects the ratio of the number of people who travel within the city to the
resident population of the city
2020 Intracity Transport Intensity Index
(2020 CNY Holiday Travel Season)
2019 Intracity Transport Intensity Index
(2019 CNY Holiday Travel Season))
(Data as of Mar 13)
Shanghai Beijing Wuhan Shenzhen
Data Source: https://qianxi.baidu.com/?from=shoubai#city=0 Chinese Only
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‘Impact Assessment of Pandemic to China Business’ section in the Business Intelligence Reports performs
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
65% 72% 75% 76% 78% 80% 82% 83% 85% 86% 87% 13% 11% 18% 13% 12% 15% 15% 19% 24% 21% 24%
0% 20% 40% 60% 80% 100% 14-Feb 19-Feb 24-Feb 29-Feb 5-Mar 10-Mar
RESUMING OPERATIONS PERCENTAGE TREND FOR COMPANIES ACROSS CHINA
China Hubei Province
96% 89% 88% 86% 86% 72% 62% 4% 11% 12% 14% 14% 28% 38%
0% 20% 40% 60% 80% 100% Southwest China East China South China Northeast China North China Northwest China Central China
COMPARISON OF COMPANIES RESUMING OPERATIONS IN DIFFERENT REGIONS
Resumed operation Temporarily closed Source: Dun & Bradstreet Business Intelligence Reports for Mainland China and Hong Kong SAR; as of March 10
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57% 64% 70% 93% 0% 0.2% 1% 0% 43% 36% 30% 7%
0% 20% 40% 60% 80% 100% Enterprise services (computer, software, advertising, finance, accounting, law,… Manufacturing and processing (chemicals, metalwork, etc.) Retail wholesale Transportation (air, sea, logistics, travel agency, etc.)
COVID-19 IMPACT ON COMPANIES BY INDUSTRIES Proportion of companies having negative impact Proportion of companies having positive impact
0% 50% 100% Feb 14 Feb 21 Feb 28 Mar 6 Mar 10 (Tue)
RESUMING OPERATION TREND OF COMPANIES BY INDUSTRIES
Enterprise services (computer, software, advertising, finance, accounting, law, management, engineering, etc.) Manufacturing and processing (chemicals, metalwork, etc.) Retail wholesale Transportation (air, sea, logistics, travel agency, etc.)
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Source: Dun & Bradstreet Business Intelligence Reports for Mainland China and Hong Kong SAR; as of March 10
however the impact has been felt widely
transportation most widely affected: 3 companies predict 40%
in e-commerce, respiratory materials, medical equipment, and supermarkets for retail, wholesale, and manufacturing
ANTICIPATED DECLINES POSITIVE RESULTS
Q1 2020 - manufacturing and processing Q1 2020 – retail and wholesale Q1 2020 – corporate services
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According to latest social sentiment research reports, people show a lot of confidence in next phase development of Online Working, Online Education, Online Gaming and Online Video
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Positive anticipation is also shown for the future development of social networks as there has been a significant social traffic increase during the quarantine period.
Online Work Online Gaming Online Video Online Education
The outbreak has speeded up digitization of various industries in China. People are getting used to applying social and digital in their daily work and entertainment
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Contact Dun & Bradstreet to find out about our Supplier and Customer Intelligence capabilities and how we can help you understand your potential risks. Reach out to your Account Executive, local office, or contact us online for country-specific solutions. We have also added a special section to existing Mainland China and Hong Kong SAR Dun & Bradstreet Business Information Reports.
DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
Special Briefing Report: Business Impact of the Coronavirus Global Business Risk Report: Q1 2020 READ OUR LATEST INSIGHTS
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DUN & BRADSTREET WEBCAST | CORONAVIRUS IMPACT | MARCH 2020
CONTACT US DIRECTLY OR VISIT YOUR LOCAL DUN & BRADSTREET WEB SITE www.linkedin.com/company/dun-&-bradstreet and @DunBradstreet Markus Kuger
Chief Economist Dun & Bradstreet KugerM@dnb.com linkedin.com/in/markus-kuger- a4111635 www.dnb.co.uk
Brian Alster
General Manager Third-Party Risk & Compliance Solutions Dun & Bradstreet AlsterB@dnb.com linkedin.com/in/brian-alster- 6908284 www.dnb.com
Andrew Wu
General Manager Mainland China & Hong Kong SAR Dun & Bradstreet
WuA@dnb.com linkedin.com/in/andrewgywu www.dnbchina.com
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