As the pandemia is keeping cities on lockdown, many companies are taking a direct hit to their sales. Others who depend on China for manufacturing are facing supply chain issues. But, there are two sides of each coin.
First of all, due to the well-known US-China trade war that is more ‘old news' now, some companies were forced to diversify their suppliers, and this has made them more resilient to the Coronavirus outbreak in China. But the true winners are those providing books, condoms, games, yoga mats and everything that is fighting off boredom for all those being home and in for a lockdown.
Commercial Centers Are Closed – E-Commerce Is Doing Just Fine!
As malls and stores remain shut, sales of automobiles are crumbling. But e-commerce giant Alibaba Group Holding BABA is observing the situation carefully and looking for opportunities to both provide solutions for the crisis and add value-adding services. And it is reporting that the demand for health, entertainment and cosmetics products is blossoming. And Lululemon LULU and L'Oréal LRLCY are among the ‘highly sought-after ones'. Although the overall e-commerce volumes are smaller, cosmetics and health-enhancing products are the exceptions to the rule.
Disney Loses- Nintendo Wins
Walt Disney Co. DIS was forced to close theme parks in Shanghai and Hong Kong and if this remains the case for a couple of months, the company is facing a decrease of 175 million in operating income in this quarter. Furthermore, since cinemas are also closed in China, that may also affect the results Mulan movie, which is coming out in March.
On the other hand, Nintendo's NTDOY Ring Fit Adventure game for the Switch console, which combines exercise and role playing, has been a star performer during this crisis. Alibaba reported that sales have more than quadrupled in only two weeks leading to Feb. 20 compared to normal levels.
It's All About Staying Healthy- And The Human Mindset
People have time. But considering there is no remedy for the outbreak so you can only count on your immune system- they also need to make sure they stay healthy. And consequently, sales of yoga mats increased 250% during the two-week period in February, compared to a year earlier.
Moreover, people are bored. Sales of books jumped 60% on Alibaba's Tmall marketplace in the week beginning Feb. 10 compared with the previous week and this makes sense. But it is a bit strange that makeup sales skyrocketed as well, authorities have now imposed rules that masks be worn outdoors.
The fact that sales of eyeshadow palettes increased 150% can be explained by the female mind to be pretty no matter what. But lipsticks sales going up sevenfold? Well, that is maybe more about boredom and having the time to perfect one's makeup skills! It's all about knowing the customer after all!
Conclusion
The majority of the world is being negatively hit by COVID-19. But this article only shows that there are never rules that cannot be broken. And that the company who builds its strategy around the mindset of its customer cannot be damaged by any kind of regulation or event.
If making women wear masks only makes them buy more lipsticks – this paradox comes to show no mountain is high enough indeed! And Alibaba is one of the companies who is smart enough to carefully observe how the situation is developing so it can benefit from the upcoming trends that will be born out of it. And working from home will surely be one of them!
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