Bloomberg Businessweek - USA (2020-04-20)

April 20, 2020

THEBOTTOMLINE MillionsofresidentsofWuhanareagainable

toventurefromtheirhomes.Butsmallbusinessesfretthatthe

lockdownmayhavealteredconsumerbehaviorpermanently.

Xiong’sexperienceprovidesa windowinto

the uncertainfuturefacingsmall-businessown-

ers aroundtheglobeastheycontemplatelifeafter

lockdowns.Whilemanyhopetopickupwherethey

left off,Wuhan’scautiousemergenceshowsit likely

won’tbethateasy.Thecity,oncea bustlinghubfor

steelandautomanufacturing,remainsgrippedby

fear ofreinfection.Companiesaretestingemployees

beforethey’reallowedbacktoworkanddisinfecting

theirpremisesdaily.If a customerorworkergetsthe

virus,businessestypicallyhavetoshutdownagain

forweeksofquarantine—somethingeventhemost

painstakinglypreparedbusinessplancan’tpredict.

It’sa cycleofstressandworrythathasn’tlet

up forXiongsinceJan.23,whenhisphonestarted

buzzingat2 a.m.withthenews:Wuhanwouldbe

lockeddownineighthourstocontainthedeadly

virus.While5 millionpeopleleftbeforethecity

was cutoffat 10 a.m.,Xiongandhisfamilynever

considereddoingso.He’sfromWuhan,andthe

veryexistenceofhisbusinesswasatrisk.“Iknew

restaurantswouldbethemostheavilyaffected,”he

says.“Ialsoworriedaboutourworkers’health.”

MostofXiong’srestaurantshadalreadybeen

closedbeforethelockdown,asrumorsaboutthe

mysteriouspneumoniathatwouldgoontokill

morethan2,500peopleinWuhanhadbeencircu-

latingsincelateDecember.It wasa painfuldecision

that sawhiscompanybasicallywriteoff1 million

yuan($142,000)worthoffreshfood.

Asthe quarantinebegan,Bainianfeng, like

restaurateursfromNewYorktoSydney,soughtref-

uge inmealdeliveries.ButWuhanhadturnedinto

a ghosttownovernight,andXionghadtofigureout

how tosourceandtransportingredientsthatgrew

moreexpensiveassuppliesranlow.Meanwhile,

his staff—greatly reduced because most were too

scared to report to work or restricted from leav-

ing their housing compounds—spent much of their

time sanitizing the kitchen of the one restaurant he

managed to keep open during lockdown. 

Before the outbreak, people would stand in line

for 40 minutes on weekends to get a seat at Xiong’s

more popular spots. But under lockdown, he was

lucky to get 20% of the orders he used to receive via

delivery apps such as Alibaba Group Holding Ltd.’s

Ele.me and Meituan Dianping, another backed

by Tencent Holdings Ltd. To draw more diners,

Xiong’s three operating restaurants are offering to

deliver food to any location in the huge city, even

if it takes hours. The online platforms take 20% of

sales, but “we don’t dare to increase our prices

because people will complain,” Xiong says.

Xiong was already under pressure from rents

that have doubled over the past five years, reduc-

ing his profit last year by 3 million yuan. This year

he expects to lose 2 million more because of the

shutdown. The total operating cost for all of Xiong’s

restaurants is about 50,000 yuan a day, he says, of

which about 23,000 yuan is rent. He’s had to let at

least 40 employees go.

Xiong is trying new ways to keep his business

afloat. Betting the trend to order in will continue,

he’s begun importing high-tech food packaging

machines from Taiwan to sell to other restaurants.

He’s also trying to start a livestreaming channel fea-

turing his cousin—a former model—cooking in one

of the restaurants and eating the food. “There defi-

nitely will be restaurants sifted out,” he says. “The

market just follows natural selection, and only the

fittest will survive.” �Sharon Chen and Claire Che

◀ One of Xiong’s

empty restaurants

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