Amazon and Walmart orders could be delayed due to closures in China

(Bloomberg) — Orders placed by global e-commerce platforms such as Amazon and Walmart could be delayed due to closures and restrictions due to covid-19 in some of China's key manufacturing centers, according to an industry body.

Shenzhen, home to about half of all online retail exporters in China, was blocked for at least a week on Sunday to try to contain the spread of a covid-19 outbreak. Its 17.5 million residents must work from home, and all non-essential businesses and public transportation closed.

In the vicinity of Dongguan, a key Chinese center for the manufacture of shoes, toys and textiles, factories were ordered to close in areas where there are cases of viruses, and schools and restaurants are effectively closed.

The measures create significant disruption in the production and delivery of products sold in major online markets, including those managed by Amazon.com Inc. and US retail giant Walmart Inc., said Wang Xin, director of the Shenzhen Cross-Border E-Commerce Association.

Most production has been suspended in Shenzhen due to lockdown and deliveries are interrupted because logistics companies and warehouses are not operating or are doing so at a reduced capacity, Wang said in an interview Monday.

Chinese sellers have become ubiquitous on global shopping platforms, often specializing in cheaper versions of everyday goods, such as phone chargers and sneakers. The country's cross-border e-commerce industry grew by 25% to 1.4 trillion yuan (US$220 billion) in 2021, based on a 40% increase in 2020 due to the pandemic. Thanks to China's integrated supply chains, some companies have become the largest vendors worldwide. Fast fashion giant Shein is one of them, as is Anker Innovations Technology Co., which retails $1.5 billion worth of smartphone accessories and other consumer electronics every year.

Representatives from Amazon and Walmart did not immediately respond to emails seeking comment on possible delivery delays. Chinese logistics firm 4PX said on its website on Monday that it stopped picking up packages from Shenzhen due to covid restrictions.

Wang said the association is “actively negotiating” with the Shenzhen authorities to try to have at least some package deliveries resumed soon. The disruption comes at a particularly difficult time as Amazon is taking stricter measures against several of the biggest sellers in China last year over fake consumer reviews.

While authorities have said that some factories in Shenzhen and Dongguan will be allowed to operate if they test workers daily and operate in bubbles, Wang said its member companies have had to stop all production, and one was even fined earlier this week because it had not complied.

Original Note:

Amazon, Walmart Online Orders Likely Delayed by China Lockdowns

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