China-reliant traders affected by lockdown
Supply delay may cause IT goods prices to rise
Businesses relying on supplies and products from manufacturers and factories in major cities in China are feeling the heat of the lockdown due to the coronavirus outbreak.
With several local companies dependent on China’s industrial hub, the shutdown of businesses in its cities has affected the supply of products to Malaysia and the delivery of services to customers.
Syamimi Saidi, a bid and design associate at a furniture company here said there has been a delay in deliveries as items ordered by the company have been put on hold by manufacturers in China.
The company, which designs and manufactures adaptable workspaces, assembles its products at a factory in Shanghai, which has been closed since the start of Chinese New Year.
Its third-party suppliers are also located in the major cities of Shanghai, Zhuhai and Ningbo, where operations have yet to resume since the Lunar New Year celebration.
“We need longer response time in terms of communicating designs and customers’ orders to our engineers and manufacturers in China.
“The lockdown in China is slowing business processes, but customers continue to make orders and inquiries,” said Syamimi.
She said workers in China were mostly working from home and there were currently no production line workers at the factory.
“When customers make orders, we are unable to check shipping times due to the absence of workers at the factory.
“Our factory and suppliers in China were due to resume operations by Feb 3, but it was extended till Feb 10. We hope there will be no more further delays,” Syamimi said.
A shop assistant at a mobile phone and repair shop, Hidayah Ismail, said the store has not been receiving spare parts from China and technicians needed to find alternatives for phone repairs.
“We’re unsure when supplies from China will arrive, but if the situation persists, prices for phone repairs may rise as there are limited spare parts available,” she said.
Marketing manager of an IT company, Alicia Chui, said while the store was currently well stocked with no increase in prices, any drop in supplies from China may affect future costs.
“We are uncertain how long the situation will persist but we foresee prices will rise if we are unable to receive our stocks from China.
“Most of our IT products will be affected because they are made in China, or certain parts are supplied by China,” she said.
Chui noted that with the increase of prices in IT products such as storage devices like hard disks, solid-state drives and memory cards, products that require storage as part of the component will also be affected.
Malaysia Retail Chain Association (MCRA) president Datuk Seri Garry Chua said although some products from China have been “blocked”, he was optimistic that the impact on Malaysian businesses would not be severe.
“All offices and factories in China have been told to extend their Chinese New Year break and resume business on Feb 10,” he added.
Chua said orders would only be processed after they reopen in about two days and product supplies to Malaysia would only be affected if inland logistics and cargo planes were not in operation.
“A bit of delay is expected but we have not received any report of a major supply shortage as our retailers have many alternatives and suppliers all over China,” he added.
He said the situation in major cities such as Guangzhou, Shanghai and Beijing, where most suppliers were located, was under control.
“Our retailers receive their products from a number of places in China and the lockdown in Wuhan is not heavily impacting the products our retailers receive,” Chua said.
For the trading industry, Malaysia-China Chamber of Commerce (MCCC) president Datuk Tan Yew Sing said a certain degree of adverse impact was to be expected if the situation worsened.
“Currently, trading is slow but it is not very much affected by the lockdown in China. However, if the epidemic grows further, the industry will most probably be affected,” said Tan.