[Exclusive] Shanghai's Lockdown Drives Mom-and-Pop Store Transformation
Le Yan | Luan Li | Feng Xiaoxin | Jie Shuyi
DATE:  May 27 2022
/ SOURCE:  Yicai
[Exclusive] Shanghai's Lockdown Drives Mom-and-Pop Store Transformation [Exclusive] Shanghai's Lockdown Drives Mom-and-Pop Store Transformation

(Yicai Global) May 27 -- Small business owners in Shanghai are changing their business models amid the eastern city's two-month-long lockdown.

Some small stores said they are adopting new methods to survive in the changing business environment. For example, the owner of comic book store Jingzihao said to Yicai Global that the retail outlet will close in July but workers will continue to organize online illustration classes and publish books.

Despite the government's efforts to ease business owners' difficulties, the megacity's lockdown, which is expected to be fully lifted on June 1, has taken its toll on supply and demand.

For small business owners, part of the problem is overhead. The owner of a 30-square meter fashion store named Walden Pond needs to pay CNY20,000 (USD2,975) in rent every month. The landlord is not a state-owned company so the fashion retailer is not eligible to apply for rent forgiveness under a government-run program.

High rent and labor costs without stable sales are some of the reasons why several small shops such as Walden Pond said they can only survive for another two to three months this way.

Shops need permission to reopen. Those that are successful, must commit to the city's Covid-19 prevention and control policy. This means ensuring that employees have a place to sleep and food as they will not be able to return to their homes after resuming work.

The challenges are also about supply. It is easier for big stores to keep their supply chains active. Meanwhile, small shops have a hard time making sure they have enough products to sell as the pandemic has affected production and logistics.

Moreover, retail outlets need shoppers. Some shop owners said that only a small number of customers are out and about to visit their outlets amid the lockdown.

Editors: Xu Wei, Emmi Laine, Xiao Yi

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Keywords:   Shanghai,COVID-19