Report Reveals Impact of COVID-19 on Imaging in China

Report Reveals Impact of COVID-19 on Imaging in China

To help understand the current business environment in China, Keypoint Intelligence partnered with the China Sign Association (CSA) to conduct a survey of their registered members to discuss initial effects of COVID-19 and what economic recovery and business reopening will look like for China in the months to come. Eric Zimmerman shares this report.

Before COVID-19, the signs and graphics market in China was already seeing some decline. Approximately half of the respondents said their revenue was down compared to 2018, with 29% claiming revenue decline of more than 20%.

Unfortunately, Q1 2020 hit the market even harder. On January 23rd, Wuhan was locked down. All of China was in “stay at home” status from late January through almost all of Q1. With trade show signage and graphics being an integral part of the marketplace, the cancellation or postponement of nearly all exhibitions in China continued to negatively influence print service providers’ (PSPs) revenue. Almost 80% of survey respondents reported a decline, and 24% stated declines of more than 70%. This information aligns with the Keypoint Intelligence quarterly shipment tracker data showing 50% or more decline in new printer shipments.

However, the COVID-19 lock-down status was lifted in China mid-late March and at the time of the survey (April to May), sign businesses were back to work with 61% stating they are “back to normal, with all employees back on the job.” Although most are back to work, 70% were saying their clients are still closed, resulting in fewer or no jobs coming in. While it is still a difficult situation, recovery is moving forward. The question is “how quickly?”

Regarding the outlook of each owner’s individual business, about 31% surveyed felt the negative impact of COVID-19 should end soon, but the same percent felt it would take longer.

Although Q1 2020 hit PSPs’ revenues negatively, signs and graphics printers are optimistically foreseeing a rapid recovery for the overall industry—with 42% predicting the sign and advertising industry returning to normal within 3 to 6 months.

With exhibitions scheduled for the second half of 2020, PSPs are hoping to see significant increases in orders from businesses in need of trade show-related signs and graphics.

From a sign industry perspective, since COVID-19, many equipment and software manufacturers have only presented PSPs with online/remote sales demonstrations and activities. PSPs are now looking forward to the opportunity to see these products in person at an exhibition to close the deal. As in any state of the economy, product service innovation is always the biggest challenge. To service customers, even during times of isolation, 55% of PSPs stated the need to increase their online business. Additionally, 44% stated that sales and marketing process improvements (such as web to print) are needed to move forward in today’s business environment.

Shanghai’s APPP Expo, scheduled in late July, and other exhibitions planned during the second half of the year could prove very helpful for many signs and graphics businesses in China that are looking to either sell or purchase products.

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