A CORK businessman who has built a commercial empire in China has lost out on around €1.5 million in revenue in the last month because of the devastating coronavirus.
Alan Coughlan, who was reared in Cobh and is a CIT business graduate, founded his own company, Lansil Global Ltd, in 2015.
Based in a warehouse in Shenzhen, a city in south-east China, the logistics and supply chain creates brands and ships products to customers around the world.
However, Alan, aged 32, says the coronavirus, which is crippling the country’s infrastructure at present and claiming hundreds of lives, with fears it will become a global pandemic, is presenting huge challenges.
He estimates he has lost between $1.5 and $2 million in revenue since the outbreak. However, he is surprisingly sanguine about doing business in China at present.
“I’m very concerned about the coronavirus, but I haven’t lost any sleep over it,” Alan said. “It’s affecting everybody.
“I’ve had customers reach out to factories in the U.S, just for the short term. But some factories in America can’t get the packaging material or the raw material for their products as they come from China.
“Everybody is in the same boat. We have customers who are worried because they may have oversold and may now be out of stock.”
Lansil Global Ltd also has a base in Hong Kong and has just opened a warehouse in Nevada in the U.S, which will shorten the delivery time of supplies, rather than the company holding all its products in China. A turnover of around $17million is expected this year.
There is a staff of 55 at Lansil Global and Alan’s China base had to close for almost a month while government officials ensured stringent anti-virus checks were implemented. It finally reopened last Monday.
“We closed for Chinese New Year on January 22 with a plan to open on the 29th,” said Alan. “Then we received notification about the break- out. It was pushed back to the 17th.
“In order to open up, we had to find out where all our staff’s locations were during the Chinese New Year holiday period. We had to get the dates they travelled, when they came home and whether they were in contact with anyone from Wuhan (where the coronavirus originated).
“We couldn’t buy masks locally as they were sold out, so we bought them from Japan. We have disinfectant sprays and temperature guns to check the temperatures of staff. They’re checked even if they’re just going to the bathroom.
“We have someone at our office doors checking temperatures (the first sign of infection is a fever) and the office and warehouse are sprayed down every day. Local government people came in and checked our premises.”
Some of Alan’s office staff are working remotely from home. The warehouse staff numbers are split so that half come in one day and the other half come in the next day.
He added: “All the staff are fine and are supporting efforts (to contain the virus). Some of them are afraid to leave home and don’t want to come in contact with too many people.”
Alan says he is fortunate to have a relatively small number of employees.
“Some factories have 1,000 to 30,000 staff. They can’t allow 500 people to be in the same area so they can’t open.”
Everything has a ripple effect. As Alan explains, his stock is going to get “lower and lower by the day”.
He adds: “What used to take us ten days to make up an order now might take 20 to 30 days. Some factories with the raw materials don’t know when they’re going to reopen.
“One customers asked for 20 million masks for a factory in Italy, but China has blocked the export of masks to keep the supply to their people — which is understandable. Crazy times!”
Despite the uncertainty, Alan says that, as a result of having made “extremely good decisions for myself and the company, I can keep going for another year, paying staff and rent”.
He normally spends around half the year in China and is currently based in the UK.
“I get up at 4am, which is just before lunchtime in China. I do all my calls and updates.”
He plans to return to China as soon as some normality returns and airports are functioning again.
As a result of the coronavirus, business in China “has definitely taken a massive hit,” he added.
“The restaurants are closed. But it’s being handled very well, with people supporting the rules.”
China was a booming economy around 2011 when Alan decided to move there. He completed a masters in international business at the Hult International Business School in Shanghai.
“I loved China and the sheer size of it as soon as I got there,” he said.
After his studies, he taught English for two years. “I didn’t enjoy it while I was doing it but, looking back, I’m glad I did it because I learned so much about the culture there. I was teaching business English.”
He went on to learn Chinese.
Alan planned to leave China and had an interview for a job lined up in Ireland — but fate intervened when he noticed a business opportunity out there.
“About two months before planning to leave, I thought I’d go to a factory and see what it was all about. I went to a bicycle factory and looked at its system and just fell in love with the process,” he says.
Alan put in an order for 50 bicycles and started looking at other products, planning to sell them online or through companies. The products included batteries for phones and phone chargers.
He came back to Ireland, intending to keep up the contact with China. The bicycles were delivered to a warehouse in Dublin. Alan failed to sell them online but managed to sell them by walking into a bike shop in Dublin.
He got an order to supply a large amount of promotional items, such as pens and umbrellas for a company in south-east Asia. Alan decided to return to China and went on to set up his company in Hong Kong.
“I lived in a city called Gwangzhou with my girlfriend. I started contacting factories. I learned about manufacturing. I made samples and shipped them. I learned a lot and I made mistakes.
“My Eureka moment was when I realised I should be supplying companies and not trying to sell things myself.”
Initially, despite coming in cheaper than other companies, Alan wasn’t getting much business. Once he realised that the competition had relationships of loyalty with big corporations, he started approaching smaller companies.
“Randomly, I got a message through my website about an e-commerce seller who wanted products for Amazon. I got in touch.
“From that day, we just took off, supplying e-commerce companies from China on platforms like Amazon, Shopify and Facebook, etc. That’s when we started specialising in branding products.
“We grew through word-of-mouth. We had no office in China. I decided to rent an office and a small warehouse in Shenzhen.”
The Hong Kong office had opened in 2015 and the Shenzhen base two years later.
The coronavirus is a massive setback but Alan plans to forge ahead. He will need plenty of Irish luck.