Coronavirus Update: Follow-up on Importing Chinese Goods
Following the spread of coronavirus in China in January and February 2020, beauty products manufactured in China suffered supply issues. In our last issue, BNB promised a more detailed analysis on this issue. Let’s compare the shipment data of the same period last year with the most recent data available. It should be noted that the data for 2020 is not for the whole month, so the purpose of this comparison is to give you the big picture to understand the trend.
Disruption in Chinese Goods Supply in last February
In January and February 2020, the epidemic in China caused a big disruption in beauty goods supply. Since the Lunar New Year holidays started on January 20, 2020, almost all Chinese manufacturing facilities were on hold for the entire February, including beauty products. As the “factory of the world” shut the door, the global supply chain was immediately suspended. Since the last shipment of Chinese beauty goods, made before the Lunar New Year, no further shipment was made for almost a month, which caused the sudden drop of beauty supply imports in March 2020. The graph below illustrates the sudden drop of beauty supply imports by product category.
Compared to 62 human hair shipments in March last year, only 7 shipments were made for the period from March 1, 2020 to March 16, 2020.
For Chinese synthetic hairs, the shipments dropped from 115 in March last year to 26 for the period from March 1, 2020 to March 16, 2020.
For Chinese hair gels, they dropped from 18 in March last year to 2 for the period from March 1, 2020 to March 16, 2020.
For Chinese eyeshadows, they dropped from 45 in March last year to 7 for the period from March 1, 2020 to March 16, 2020.
Beginning this March, it’s more about demand than supply.
As discussed above, the manufacturing and shipment of Chinese goods in January and February 2020 were adversely affected. Our concern for product supply became the reality.
However, the tide turned in this March. As the COVID-19 resulted in a declaration of National Emergency, the beauty supply industry now has to worry about dwindling consumer demand rather than the disruption of Chinese goods supply.
Moreover, the Chinese manufacturers who halted the production in February resumed its operation in March. Per many industry insiders, “Chinese factories are back in a near-normal status.” As the shipments are back on the track, you have to worry about the dwindling consumer demand for beauty products due to the epidemic in the U.S.