9 out of 10 Korean Companies in Europe Report Severe Damage from COVID-19

[Asia Economy Reporter Hwang Yoon-joo] A survey found that 9 out of 10 Korean companies operating in Europe have suffered severe damage due to the COVID-19 pandemic.

According to the "Emergency Survey on COVID-19 Damage Status of Korean Companies in Europe," conducted by the Korea International Trade Association Brussels office from the 25th to the 27th among 80 companies belonging to the European Korean Business Association, 41 companies (51%) reported the damage as "very severe." Another 31 companies (39%) said the damage was "somewhat severe," indicating that 90% of Korean companies in Europe have been seriously affected by COVID-19.

By type of damage, "sales decline due to decreased local demand" was the highest at 69%. This was followed by "closure of sales channels such as dealer shops and branches" at 58%. Next were "logistics and transportation difficulties" (43%) and "cancellation of exhibitions and buyer meetings" (39%).

Four out of ten companies (43%) expected the COVID-19 situation in Europe to calm down by "June." Another 28% answered "May," showing that more than half are anticipating a prolonged impact.

The expected sales decline rate by the anticipated recovery period was projected as "10-20% in April," "20-30% in May," and "30-40% in June," indicating that the longer COVID-19 lasts, the greater the damage is expected to be.

Companies are responding by "adjusting or canceling production and existing orders" (53%), "reducing workforce" (41%), "seeking alternative logistics and transportation solutions" (25%), and "requesting financial support from local governments" (24%).

The most urgent support requested from the Korean government was "resolving logistics and transportation difficulties" (24%), followed by "resolving customs clearance difficulties" (3%). Many also requested assistance with "overcoming difficulties in business trips of technical personnel due to entry restrictions between Korea and European countries."

Park Yeon-woo, head of the Brussels office, said, "European countries are strictly controlling not only business activities but also daily life, including banning exhibitions and meetings and restricting outings to prevent the spread of COVID-19, which has severely impacted companies' operations." He added, "Our companies need to activate untact marketing such as video consultations and online showrooms to prepare for COVID-19 and prolonged telecommuting."