Monthly Update: Coronavirus & The Beauty Industry

This months update topic is the coronavirus. You probably heard it by now, it’s a contagious virus that is spreading mainly through China. The virus is not only affecting people's health, but also the Chinese economy and the beauty industry.

The coronavirus is said to have originated in Wuhan China, there are 2,700 confirmed cases in the world, 80 dead. China has officially restricted the travel of around 60 million people to help stop the spread of the virus. The scare of a pandemic occurring, the limited travel that people can do, as well as many cities being under quarantine has caused the economy to shake. As to now major European markets are down by almost 2% because of the virus.

Some of the stocks that are being primarily affected are those that are in the travel and luxury business. Air France KLM is down almost 5%, LVMH, Dior and Kering are down almost 4% while L’Oréal is down 3%. China is the largest cosmetic market in the world followed by the United States. China's economy is supposed to be going up this time of the year because of the Chinese new year. This year the zodiac animal is the rat. There were already many brands like Gucci, Disney and Estée Lauder who designed products based on the Chinese New Year. These brands have been affected negatively due to the coronavirus limiting the travel of China's citizens. The coronavirus is limiting the spending power of one of the most important players in the beauty industry.

The good news is that it seems that the Chinese government extreme measures as well as the rest of the world, in detecting and trying to control the virus, is having a positive impact in helping contain the virus. China’s Ministry of Finance and National Health Commission has said to have appointed $8.7 billion U.S. dollars to help fund public health services and prevent the epidemic from spreading. Scientist are working hard on developing a vaccine so that the virus can be contained.

Even though restrictions have been applied to help prevent the spread of the virus, the beauty industry will likely keep going down some significant percentages as the virus continues to spread. This news is definitely the most shocking in the beauty industry this month.

Do you think there was another news more important than this one? What are your predictions on the effects of the coronavirus on the beauty industry? Let us know your thoughts in the comments below.