Tens of thousands of factories shut down! The risk of global supply chain disruption increases

The global COVID-19 pandemic continues to spread, and the Delta variant strain is raging, causing a new round of COVID-19 outbreaks in many parts of the world, seriously affecting people's production and life. The number of COVID-19 cases in developed countries around the world, including the United States, Japan, and many European countries, is also increasing.

The epidemic situation in Southeast Asia, which is a processing region for many global products, is not optimistic, especially in Vietnam. According to statistics, as of 15:00 on September 3, there were 215,265 confirmed cases of COVID-19 in Vietnam, an increase of 2,325 cases from yesterday. The explosive growth of the epidemic seriously threatens the normal operation of the region.

According to local media reports, the rebound of the epidemic is posing a huge production crisis to Vietnam. Ho Chi Minh City, Vietnam's largest city and economic and trade center, has implemented "stay-at-home" anti-epidemic measures, forcing a large number of local factories to shut down. It is understood that more than 40,000 companies in Vietnam have suspended operations, including 12,071 companies in Ho Chi Minh City. A large number of workers have also resigned due to the epidemic, and production has been interrupted .

On the other hand, the epidemic has also caused a large number of factories to face the dilemma of being unable to deliver cross-border orders on time . In addition, there is now a trend of orders flowing to other countries . Foreign investors are also taking a wait-and-see attitude towards the local situation in Vietnam, which may cause capital outflow .

Vietnam is the third largest producer of footwear products after China and India, including Nike and Adidas. However, due to the impact of the epidemic, production has been interrupted, and the supply chain of these multinational brands from Europe and the United States has been broken. In the coming autumn and winter sales peak season, they are bound to face serious risks of out-of-stock.

Some analysts pointed out that Adidas' stock price hit the biggest drop since March this year at the end of August, and the sales growth rate in the second half of the year may slow down to 7%. By the end of this year, Adidas may lose 500 million euros in sales due to shortages , and it is expected that Adidas may increase the prices of some products to make up for the losses .

The epidemic blockade has caused business shutdowns, and coupled with the current rising sea and air freight rates, product costs have further increased. The epidemic has further increased the risk of global supply chain disruptions!

Vietnam

The epidemic has exacerbated the disruption of the supply chain