Covid-19 takes toll on small, large firms

20-Feb-2020 Intellasia | The SaigonTimes | 6:02 AM Print This Post

The novel coronavirus, now officially named Covid-19, has dealt a blow to both small and large firms.

The V-SixtyFour fashion shops owned by Viet Thang Jean Co., Ltd, (VitaJean) have seen few buyers over the first half of February as shoppers have been warned to avoid crowds to protect themselves from being infected with the coronavirus.

Phan Van Viet, chair of VitaJean, noted that since the Covid-19 outbreak, the revenue earned by the V-SixtyFour brand at commercial centers has plunged by 80 percent year-on-year.

Facing the same fate, many shopping malls are now deserted due to growing concerns among shoppers over the spread of Covid-19.

Many salespeople at shopping malls in HCM City’s District 1, such as Vincom and Takashimaya, told the Saigon Times that the number of shoppers arriving at stores each day is less than the number of employees there at the time.

The off-peak shopping season after the Lunar New Year holiday and the coronavirus outbreak have sent the fashion industry into a slump.

Viet noted that tens of V-SixtyFour stores have opened at many shopping malls nationwide, adding that rental fees for these shops account for 20%-25 percent of the total revenue. Given the gloomy trade, the firm will not have enough money to pay its leases.

Apart from this, unsold clothes will eventually go out of style, adding pressure to the firm’s business, he added.

In addition to the fashion industry, many firms active in various sectors stressed that their business activities have run into difficulties due to the coronavirus spread.

At multiple restaurants and eateries, the number of dishes on the menu has been reduced by 50 percent due to the drop in customers.

A representative of a major egg supplying firm in HCM City pointed out that the falling demand for eggs has prompted the firm to offer a 50 percent discount to manage its inventory.

Aside from disrupting the daily activities of local residents, Covid-19 has paralysed the tourism, retail, trade and transport sectors in Vietnam.

Speaking at a meeting with the HCM City Department of Industry and Trade last week, some representatives of business associations highlighted an array of difficulties facing enterprises active in the food, apparel, rubber and plastics sectors due to the fallout from the virus.

Ly Kim Chi, chairwoman of the HCM City Food and Foodstuff Association, noted that many firms have seen a drop in revenue, so they are in need of the city’s support in extending debt payment deadlines. Chi also proposed offering a tax exemption to those affected heavily by the virus.

The tourism sector has been the hardest hit by the coronavirus. Many Da Lat-based hotels have seen their customers canceling room bookings out of fear of the deadly virus.

An entrepreneur in HCM City managing a hotel in Da Lat City stated that the hotel has received multiple room cancellations as a result of rising concerns over coronavirus infections.

Nguyen Thi Nguyen, director of the Lam Dong Department of Culture, Sports and Tourism, told the Lam Dong Online newspaper that since the end of the Tet holiday, the number of room cancellations has risen to over 10,000. These statistics were collected at 14 three to five-star hotels in the province.

Various tourist destinations in Nha Trang City and Phu Quoc Island, which depend heavily on the Chinese source market, are also struggling with the impact of the coronavirus.


Category: Business, Vietnam

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