It is interesting for me to see the economic ripples that COVID-19 is sending through global economy. Even when factories in China are back at 100% capacity, there will be no demand for their products as countries around the world are locking down.
The likes of Adidas, Nike, Lululemon Athletica and Under Armour have all announced store closures in Europe and the US, even as shops start reopening in China. After the Lunar New Year holiday, Szeto’s clients were trying to front-load orders for fear the supply chain bottleneck would kill them, now the tables have turned.
“They were worried, saying, we need the goods and are worried about the delay coming out of China,” he said. “But within the last week the tone has completely changed. It’s about, we do not need these goods any more, we may cancel things. So while the supply side is back up and running, there is actually too much supply right now and not enough demand.”