Shoppers in Shanghai are flocking to stores for the first time in two months as the city’s struggling retailers brace for a rebound in demand following the easing of lockdown measures.
Shoppers lined up at malls and pedestrians took to deserted streets for months on Wednesday after authorities eased some of China’s most extensive lockdown measures since the start of the coronavirus pandemic.
In a post on microblogging site Weibo, user Shanghai Hot Information, who has more than a million followers, shared images of shoppers queuing outside Hermès, Celine and Dior stores in the upscale mall. Plaza 66 range of the city.
Another user, Yilian Fengyue Xian, said she bought four cups of bubble tea after 76 days in what she called “revenge bubble tea drinking”.
Shanghai’s shutdown, which officially began on March 28 and confined most of the city’s 25 million residents to their homes for weeks, reaffirmed the government’s commitment to a zero-Covid strategy of eliminate cases through containment, mass testing and quarantine.
But the severity of the measures taken in Shanghai and other Chinese cities to fight an epidemic of the highly contagious variant of Omicron has led to a sharp economic slowdown. Beijing is now under pressure to deal with falling consumer spending, rising unemployment and mounting pressure on small businesses.
Retail sales, the country’s main measure of consumer activity, fell 11% in April from a year earlier, the biggest drop in more than two years. The impact of Shanghai’s tentative reopening on confidence is uncertain given the prospect of new infections.
Analysts have also cast doubt on a repeat of the “V”-shaped recovery of two years ago, when Chinese consumer spending rebounded sharply after the world’s first outbreak of Covid-19 in the central city of Wuhan, which has led to limits on domestic tourism and the closing of international borders.
Adam Cochrane, an analyst at Deutsche Bank Research, said the rebound would not be as strong as it had been in 2020. “The severity of lockdowns combined with continued uncertainty over future Covid policy is likely to make more nervous consumers,” he said. said, adding that a slower recovery in online sales compared to two years ago suggested weaker demand.
“The global outlook is more cautious given inflation and recession fears . . . and logistics along the supply chain remain under pressure, which could limit an export-led recovery for the economy. Chinese.
Stores in Shanghai will reopen at 75% capacity, while other businesses, including some restaurants, will remain closed. Residents who live in compounds that have recently recorded cases will also remain locked down and will be required to take PCR tests every 72 hours in order to use public transport.
“Traffic is gradually coming back – [but] people are worried [about] test positive,” Bernstein analyst Luca Solca said. “Therefore, they limit their visits to public places.”
A cafe owner in Shanghai’s Huangpu district, surnamed Pei, told the Financial Times that she hadn’t stopped making coffee since it reopened at 9 a.m., after receiving notice from local business officials Tuesday evening. “It’s too sudden,” she said. “I haven’t adjusted my biological clock yet.”
Chinese social media users have vowed to keep spending lavishly after the lockdown, with a list of bars and restaurants, labeled ‘Shanghai revenge eating and drinking playbook’, going viral.
Another business owner shared a video clip online of his restaurant full of customers on Tuesday night, with his cash register showing revenue of over Rmb 10,000 ($1,500) as of midnight.
Although many physical stores have reopened, businesses were expected to focus on online shopping recently, with the start of the country’s second largest online shopping festival, known as ” 618″.
JD.com, the Chinese e-commerce company, said sales of tech brands including Xiaomi, Lenovo, Apple and Huawei topped Rmb 100 million within 10 minutes of opening on Tuesday.
“[The surge in demand] demonstrates the resilience and potential of the Chinese economy,” the group said in a statement, adding that shortly after 8 p.m., a customer named Bao who lived in Qinghai province became the first to receive a package from JD.com during the festival this year.
Additional reporting by Wang Xueqiao in Shanghai