JEREMY SAMPSON: Coronavirus — a real game-changer
The coronavirus erupted into a world that has never been more connected. We have to live with the unintended consequences
In business, and indeed life, it is prudent to consider the law of unintended consequences. As a result, a whole industry has mushroomed out of plain old public relations to an extensive bouquet of specialist offerings — just one being crisis management.
Which is exactly what the world needs now. It’s not often that we have a global crisis that spreads panic, affects countries, fells stock markets around the world, brings companies to their knees, closes businesses, puts hundreds of thousands of people into quarantine, and hospitalises or kills others.
But as I write this (and things are evolving rapidly), about 427 people have died from the coronavirus. Considering that over 17,000 people have been infected, that would suggest there’s a 2% chance it’ll be fatal if you contract the virus.
A far wider impact can be seen in the millions of people in a state of near panic, and the millions of dollars lost on crashing global stock markets. On Monday, China’s Shanghai composite index fell 8% — its worst fall in four years. These jitters have cascaded into the S&P 500. The upside, though, is that these losses may be regained faster than you expect.
It’s not often that we have a global crisis that spreads panic, affects countries and fells stock markets
Certainly, the coronavirus’s litany of unintended consequences suggests this may well be a game-changer.
Historically, Africa, South America and China are parts of the world from which deadly diseases emerge frequently. Africa is well known for, among others, Ebola and Lassa fever, and the work of the World Health Organisation is never done as diseases mutate. China too has had serious outbreaks — but this time it looks different. In a world interconnected in an unprecedented way, efforts to enforce strict travel limitations have proved futile. Locking down cities, districts and then a whole country has also had little effect. The virus is out there.
So who are those most affected and most at risk? The obvious starter is Brand China — the second-most powerful nation in the world which, in many areas, isn’t just challenging but overtaking the US. When you consider the brand value of the world’s largest banks, for example, the top four are all Chinese. Brand Hong Kong, already in dire straits due to civil unrest, is also on its knees.
Maybe it’s unfortunate for Corona, the Mexican beer brand, that its name is now appended to the worst virus outbreak in decades. Google searches for "beer virus" apparently rocketed 744% in one week after January 18. (The Boston Globe reported that pubgoers suggested changing the name to the "Bud light virus", while others say they’re inoculated because they only drink vodka.)
Still, the epidemic has smacked the shares of companies around the world, partly because it coincided with the Chinese New Year — so closing down airlines, trains, hotels, casinos, the Shanghai Disney Resort, cruise ships, film premieres and sports events during peak season hurt even more.
So are there any winners?
Maybe. Certainly in the medical world the Chinese have shown, quite amazingly, how to build a hospital in record time. And even in China, shares in health-care companies have defied the carnage, rising 10%. The sale of medical masks is predictably stellar.
The virus has also made far more people aware of the ripple consequences of such a global event. If, for example, you weren’t aware of the number of Starbucks outlets in China before this, or the reliance of Apple on the Chinese, you will be now. Luxury goods stores around the world, for instance, will miss the spending power of the Chinese tourist.
Some may argue that while serious, an event like this is bound to happen from time to time. And due to technological connectivity, the public is more exposed than ever to unfolding events. In any disaster there will be winners and losers. Some will die. But there will always be unintended consequences that need managing.
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