Savills China Retail predicts a full recovery of the country’s retail sector post coronavirus will probably happen in the second half of the year.
In a perspective on China retail’s recovery from the crisis, the real estate company describes the blossoming rejuvenation of shopping malls, restaurants, gyms and entertainment centres whose businesses were affected by lockdowns during and after the Chinese New Year period in late January.
It says consumers are gingerly returning to stores as China’s coronavirus outbreak eases. Shopping malls in Shanghai are reporting footfalls at 30 per cent of their pre-coronavirus levels. From this week, most shopping malls have adjusted business hours back to 10 am–10 pm and most retail tenants have reopened to the public.
Anecdotal evidence suggested that it was already difficult to find parking or seats at coffee shops at Shanghai’s IAPM mall, and queues were reported outside some fashion stores.
While some restaurants have shut down permanently after being unable to cover labour and rent costs during the affected period, those that survived have been allowed to reopen following an application process. Popular restaurants are once again popular after the coronavirus outbreak receeded.
Most of the gyms in China have reopened excluding Beijing, introducing maximum capacity levels – allowing 50 people in at a time (per 30,000sqft) for a 90-minute period. After that time is up, gyms perform a full half-hour sanitisation process before letting the next 50 people in to work out.
Nightclubs and KTV venues have opened as of a few days ago in Shanghai and in most cities in China except Beijing, however consumers are remaining hesitant to go to these places. Some entertainment parks remain closed, most likely on a voluntary basis.
A limited number of domestic Chinese brands have collapsed at this stage, but more are likely during the next couple of weeks, due to cashflow challenges.
Savills says international brands looking to expand in the China retail market have largely put those plans on hold.