If the measure of a city’s economic activity be the sales of women’s shoes, then Nanjing is now performing at 50 percent of its previous retail level, showing that despite numerous incentives lavished upon the populace, much fewer numbers than hoped are willing to spend.
The push for people’s pockets began in the wake of the epidemic. As the number of Covid-19 cases remained at zero, the Nanjing government awarded the equivalent of ¥50 to every citizen in the form of shopping vouchers.
In Nanjing’s central business district of Xinjiekou, shopping malls such as Xinbai, The Central, Golden Eagle and others, adjusted their business hours, delaying closing time to 10 pm. The move was timed for just before the annual Tomb Sweeping Day festival, giving shoppers extra time that long weekend to spend their holiday money.
Except that didn’t happen. Data has been released showing Xinbai mall store sales have returned to only 50 percent of those from the same weekend last year.
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A similar picture is emerging elsewhere. In Shanghai, there have been few people browsing the well-stocked shelves of Walmart. Even when online delivery is included, an insider source said, “Sales are not growing at all”, reports the Nikkei Asian Review. The same article also refers to a retail-industry observer, who commented that people are “in money-saving mode”, having lost their jobs or fearful of being next for the chop.
Nanjing-based Suning has also reported seeing only half its normal number of customers.
In such a grim retail scenario, no wonder sales and promotions have begun popping up. With many students away from their lectures, various retailers have also launched themed promotions for the student market. Adidas and Nike have kicked off promotions for students, while in Nanjing’s Shanxi Lu Department Store, it’s half price across the entire children’s clothing range. In Xinjiekou, Xinbai recently launched its first large-scale promotional activity since the epidemic. Women’s shoes and sports goods are the focus of the sale that runs until mid April.
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Local media, however, are keen to frame the many sales and promotions as evidence of consumer confidence. A Ms. Wang, who works in a first-floor boutique women’s shoe shop in Jiangning’s Golden Eagle told JSChina she received notice on Thursday that she was required to work with two other employees that weekend. Normally, there are only two people on duty.
On a national level, China’s Ministry of Commerce has stated that approximately 80 percent of restaurants and more than 90 percent of commercial facilities have resumed business.
China’s experience is showing that, while the lockdowns may have lifted and the shops are open again, people do not necessarily immediately run outside and start spending. Many are just beginning to see the financial difficulty they are in, while others have become used to their new way of living. Some even quite like the brave new world.
Back on 12 February, Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, predicted a V-shaped recovery for China’s economy. It has now been almost 3 months since the outbreak and that’s not happening, at least not in the retail sector. The V is more of a square root (√), but back to front.
