Bloomberg Businessweek - USA (2020-05-18)

◼ BUSINESS Bloomberg Businessweek May 18, 2020

13

PHOTOGRAPHS

BY

GILLES

SABRIE

FOR

BLOOMBERG

BUSINESSWEEK

China’sretailsectorsuffereda recordcollapse

inthefirstthreemonthsof2020.E-commerce

salesreporteda 5.9%gain,butphysicalstores

sawa declineofmorethan20%,accordingtothe

NationalBureauofStatistics.Thecategorycover-

ingrestaurants,apparel,andjewelrypostedthe

biggestslump,witha 30%plungefroma yearago.

MallshaveevolveddifferentlyinChinathan

intheU.S.,wheretheyfirstsproutedabouta

centuryagowiththeriseofprivateautomobiles

anda populationshifttothesuburbs.InChina

they’rea morerecentphenomenon,boomingas

theeconomyopenedupandanemergingmiddle

classsoughtconvenience,trustedbrands,enter-

tainment,andtheabilitytoshopinanyweather.

In 2009 therewereonly4,298shoppingcenters

in China, according to Winshang Data, an online

retail market database in China. A decade later

there were 41,850 malls as companies includ-

ing property developers Dalian Wanda Group

Co Ltd. and Seazen Group Ltd. expanded aggres-

sively. Although new mall building in the U.S. has

slowedinrecentyears,Cushman& WakefieldPlc

estimatesmallspaceinChinajumped53%from

2017 to2019,tocover 82 millionsquaremeters

(882millionsquarefeet).

With all the construction,landlords have

focusedincreasinglyonfoodoperationsasanchor

tenants.WinshangDataestimatesthatin2016,

50%oftenantsinnewmallswereretailbrands,

whereas30%wererestaurants.By 2019 traditional

shopshadfallento41%,andeatingplaceshad

jumpedtoalmost38%.

Thevirusoutbreakmaybreakthatrelationship,

especiallyasrestaurantshavetoadjusttosocial

distancingthatlimitshowmanypeoplecandine

andtonewconsumerhabitsdevelopedduringthe

lockdown—such as having food delivered.

Many operators are under pressure, with about

60% of China’s publicly traded restaurant com-

panies at risk of running out of cash within six

months, according to data compiled by Bloomberg

and company reports. Many small and medium

businesses have already shut down, while bigger

◀ A deserted mall and

restaurant in Wuhan

Starved for Traffic