Coronavirus is Now Affecting E-Commerce Businesses

In the wake of coronavirus hitting Chinese supply chain and deliveries, Alibaba Group Holding Ltd has warned investors of a drop in revenues. One of the company’s executives issued the warning during the earnings call for the quarter ending in December 2019.

According to the Chinese e-commerce giant’s CEO, Daniel Zhang, food delivery orders have dropped year-on-year due to the large numbers of restaurants that remained closed as the pandemic spreads. The CEO himself delayed return to work following the Lunar New Year.

Although the demand for goods has surged over the past few weeks, especially from its Hema supermarkets, the company cannot cater to the demand due to limited delivery capacity.

Other than this, Alibaba’s finance chief Maggie Wu also detailed that the company is expected to see a fall in revenue this year since it greatly depends on the sale of physical goods. According to Wu:

We like other businesses are not immune to supply and demand. Their recovery and long-term success will translate to long term growth for Alibaba Group.

Even though the company is expecting a fall in revenue, more people in large cities have started going back to work. Hence, the logistics network could slowly start to return to normal.

Because of the crisis, DingTalk, the company’s enterprise chat app, has witnessed massive growth since most of the white-collar businesses and schools use it for remote working and online lessons.

In other news, the epidemic has killed 1500 people so far.

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