Shoppers in Shanghai are flocking back to stores for the first time in two months as the city’s struggling retailers prepare to restore demand after easing blocking measures.
Customers lined up in malls and pedestrians took to streets that had been deserted for months on Wednesday after officials eased some of the biggest blockade measures in China since the start of the coronavirus pandemic.
In a post on Weibo microblogging site, Shanghai Hot Information, which has more than 1 million followers, shared photos of customers queuing up in front of Hermès, Céline and Dior stores in the Plaza 66 high-end city mall.
Another consumer, Yilian Fengyue Xian, said she bought four cups of bubble tea after 76 days of blocking what she called “drinking tea with revenge bubbles”.
The closure of Shanghai, which officially began on March 28 and locked most of the city’s 25 million residents to their homes for weeks, reaffirmed the government’s commitment to a zero-Covid strategy to eliminate cases through blockade, mass tests and quarantine.
But the seriousness of measures in Shanghai and other Chinese cities to combat the outbreak of the highly contagious Omicron variant has led to a sharp economic slowdown. Beijing is now under pressure to cope with falling consumer spending, rising unemployment and growing pressure on small businesses.
Retail sales, the country’s main measure of consumer activity, fell 11% in April from a year earlier, the sharpest drop in more than two years. The impact of the pre-opening of Shanghai on confidence is uncertain, given the prospect of further infections.
Analysts also question the recurrence of the “V-shaped” recovery from two years ago, when Chinese consumer spending recovered sharply after the world’s first outbreak of Covid-19 in the central city of Wuhan, which led to restrictions on domestic tourism and the closure of international borders.
Adam Cochrane, an analyst at Deutsche Bank Research, said the recovery would not be as strong as it was in 2020. “The weight of the blockade, combined with continuing uncertainty about Covid’s future policy, is likely to make consumers more nervous.” he said, adding that the slower growth in online sales compared to two years ago suggests lower demand.
“The global outlook is more cautious given fears of inflation and recession. . . and logistics along the entire supply chain remain under pressure, which may limit China’s export-led economic recovery.
Shops in Shanghai will reopen with a capacity of 75 percent, while other businesses, including some restaurants, remain closed. Residents living in complexes that have recently registered cases will also remain locked up and will have to do PCR tests every 72 hours to use public transport.
“Traffic is coming back gradually – [but] people are worried [about] is a positive test, ”said Luca Solka, an analyst at Bernstein. “That’s why they limit their visits to public places.”
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A cafe owner in Shanghai’s Huangpu district, Pei, told the Financial Times that she has not stopped making coffee since she reopened at 9 a.m. after receiving word from local business officials Tuesday night. “It’s too sudden,” she said. I haven’t set my biological clock yet.
Chinese social media users have promised to continue spending long after the blockade, with a list of bars and eateries labeled “Shanghai’s Book of Revenge, Eat and Drink” going viral.
Another business owner shared an online video of his restaurant full of customers on Tuesday night, showing revenue of more than 10,000 yuan ($ 1,500) by midnight.
Although many physical stores have reopened, companies were expected to continue the recent focus on online shopping with the launch of the country’s second-largest e-commerce festival, known as the 618.
JD.com, China’s e-commerce company, said sales of technology brands, including Xiaomi, Lenovo, Apple and Huawei, exceeded 100 million yuan within 10 minutes of opening on Tuesday.
“[The surge in demand] demonstrates the resilience and potential of China’s economy, “the group said in a statement, adding that shortly after 8 p.m. year.
Additional reports from Wang Xueqiao in Shanghai
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