China is the world’s most important producer of textiles, toys and electronics, but its production has almost completely halted due to the coronavirus. If that crisis continues, Belgian companies too may suffer from logistic problems and empty shelves may start to occur.
iPhone
The looming logistical crisis is caused by China’s hugely dominant position as country of origin of many products. Not only finished products (like the iPhone) are made there, but also an enormous array of smaller parts that are then shipped for assembly in other countries. This means that a company like Apple can not simply shift production of iPhones to another country in order to circumvent the corona crisis.
Apple is probably the most famous of the hard-hit brands: its iPhones are made by Chinese Foxconn, a company that has now been forced to hugely decrease its production capacity due to a number of virus containment measures. This means iPhone deliveries have been significantly delayed.
Ample stock
This raises the question in how much European stores are depending on China, and for which products. Janick De Saedeleer, MediaMarkt Belgium spokesperson, says there is no short-term risk: direct dependency of Chinese import is rather limited and current stocks are sufficiently big. However, there may be concerns on the longer terms: especially items like washing machines and refrigerators contain a number of parts that are produced in China, even if the appliances themselves are assembled in Europe. “If the problems with production in China continue to exist for a longer time, we can not fully exclude that a certain number of items may disappear from the shelves”, De Saedeleer says in Belgian newspaper De Standaard.
Retail group Colruyt mostly sees potential problems for its toys subsidiary Dreamland: “Our stocks are sufficient and typical summer products – think of inflatable water toys – have been produced long before the outbreak of the virus”, spokesperson Silja Decock explains. However, if the crisis continues it may pose a problem for the start of the new school year”.
