Tokyo (SCCIJ) – The containment measures against the new lung disease Covid-19 are having a significant impact on the sales and working style of European companies in Japan. This is the main result of a survey designed by the European Business Council (EBC) in Japan and sent to the 18 European National Chambers of Commerce in Japan. On their requests, 260 companies from 16 EU countries filled out the questionnaire. The Swiss Chamber of Commerce and Industry in Japan also circulated the survey to its membership.
The European Business Council (EBC) in Japan surveyed the effects of Covid-19.
More telework
According to the survey summary of the EBC, 82% of the respondents have decided to implement specific measures starting in January. To avoid human contact in limited spaces, many companies have introduced restrictions on business trips (76%) and public events (55%).
70% of the respondents favor the use of telework. Besides, companies mentioned the adoption of flexible working hours to avoid commuting during rush hours. In addition, many enterprises increased the frequency of office cleaning and hygiene measures for employees as well as for visitors. Examples given by respondents of the survey were face masks and disinfectants provided at the office.
Sales decline
The survey points to a downward revision in the outlook for sales during the first quarter 2020: 35% of the respondents expect a 20% decline. For 38%, it is still too early to understand the situation. In particular, they stress their lack of visibility. However, 19% of respondents remain quite optimistic and mention the impact should be negligible.
The impact on companies’ activity is mostly felt on business trips (87.5%). As many European companies based in Japan are also operating in China and Korea, restrictions on going abroad could have a negative consequence on their business. 34% of companies say their supply chain is affected. Also, respondents feel minor repercussions in cash flow (19%) and employment (16%). 16% of companies have implemented cost reduction measures.
Survey details
Seventy-five respondents identified themselves as a “Japanese” company. They are companies established in Japan by European nationals or Japanese company members of an EU National Chamber of Commerce. 63% of the participants are operating in the service sector. 52% of the respondents are small and medium-sized enterprises (between 10 and 500 employees).
The company managers had time to fill out the questionnaire between February 26 and March 10. The data was collected anonymously. The objective of the EBC survey was to better understand the current situation at European companies operating in Japan confronted with the COVID-19 crisis and to highlight its direct impact on their economic activity. The survey happened in the context of increased exchanges between the EU and Japan.
The background: In February 2020, the EU and Japan celebrated the first anniversary of the entry into force of the EU-Japan Economic Partnership Agreement (EPA). The European Business Council (EBC) is the trade policy arm of 15 European National Chambers of Commerce and Business Associations in Japan. It has been working to improve the trade and investment environment for European companies in Japan since 1972.
Text: SCCIJ based on the EBC survey results
