Apple News Facebook Twitter 新浪微博 Instagram YouTube Wednesday, Feb 12, 2020

Chinese culinary industry struggles to survive the grim economic situation under #CoronavirusOutbreak

By Jiang Jie (People's Daily Overseas New Media)    14:09, February 12, 2020

Photo/Dalian Daily

The Spring Festival holiday traditionally means peak season for Chinese culinary and entertainment industries, which always make a great profit out of the family get-togethers and year-end parties. Yet, this Spring Festival, with the sweep of novel coronavirus pneumonia (NCP), has brought a grim winter for the businesses that rely on crowds.

On Feb. 1, northwestern-style Chinese food chain Xibei’s founder said the company has closed over 400 stores in more than 60 cities. The monthly revenue loss could total 800 million yuan ($114 million). The founder even claimed that the company’s cash flow could not last for longer than three months, given that employee payment will cost another 150 million yuan every month.

Haidilao, a famous hotpot food chain, already saw its stock price slump by nearly 20% between Jan. 20 and Feb. 5. The chain announced the closure of all its stores in the Chinese mainland on Jan. 26.

As the outbreak hit just before the traditional family get-together dinner on Jan. 24, many families canceled their plans in line with local health authorities’ call to avoid dining out, hitting restaurants hard. Many restaurants later had to turn themselves into grocery stores to sell off their vegetables and meat originally scheduled for the get-together dinners to clear their storage and make up for the losses.

Beyond the big names, many smaller businesses are struggling even more to survive this winter, fearing that they will go under from the pressure of employee payment and store rents. The mood is the same for the workers in the industry, who worry about their incomes, along with other upstream industry workers, such as farmers, who had expected a good income from the selling of their harvest.

Between Jan. 24 and Jan. 30, estimates put China’s culinary retail revenue at a mere 500 billion yuan, less than half of the 1.005 trillion yuan over the same period last year, according to research by Evergrande Research Institute.

Starting Feb 2, Fintech company Ant Financial started to reduce interest rates of business loans by 10% for 1.8 million Hubei small business owners, including 1.5 million mom and pop shop owners and 300,000 medical supply dealers. Chinese food-delivery giant Meituan Dianping has also launched a 350 million yuan fund to support stores nationwide and opened an online raw material purchase channel for storeowners in 38 cities to support and restore operations. Joining hands with a dozen banks, Meituan is also offering no less than 10 billion yuan in loans to the small businesses.

At the same time, several real estate companies announced that they would offer rent-free periods for affected stores and restaurants, it will take more efforts to survive in this battle.

This all comes at a time when the traditional culinary industry in China seeks a new path; that is, trying to catch up with the trends of takeout food delivery and livestreaming. Thirty-one food chain stores – from Meizhou Dongpo, a Sichuan-style food chain, to Domino’s Pizza – have opened up their kitchens to the world on Taobao’s livestream platform, which features talented cooks and offers a new channel for restaurants to sell their image and their food.

While the concept of livestream is no longer new to the nation and its young people, it remains new to many businesspeople. Kuaishou, a major livestream platform, has responded by making it easier for people to get started and lifting the registration fee to encourage offline businesses to go online.

As a result, the takeout food delivery industry has opened its resources to many more businesses in the past weeks. Starting Feb. 1, Meituan Dianping began to offer online training to small businesses on the basics of takeout food and online marketing. Such courses have reportedly soared in popularity over the weeks.

Some internet companies reached out to the employees at affected industries to fill in the huge gap in the takeout food delivery, which has seen skyrocketing demand across the nation, as all are encouraged to stay indoors.

Online grocery giant FreshHema has “rented” and trained over 1,800 employees from 32 restaurants, hotels, cinemas, and shopping malls – all of which have been hit hard by the coronavirus outbreak - in cities like Shanghai, Beijing, Xi’an, and Kunming, so that they can work at Hema stores temporarily.

Similarly, MissFresh, another fresh food e-commerce platform, has offered to share jobs with restaurants like Xibei and Meizhou Dongpo, inviting their cooks to prepare the raw materials for customers according to restaurant recipes, so that people can enjoy the food without complicated cooking methods.

Industry players and customers alike expect and long for victory in this battle. “Wait for us. We will eat and shop and party like crazy once life gets back to normal,” a netizen commented.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Jiang Jie, Bianji)

Add your comment

We Recommend

Most Read

Key Words