In Shanghai, the once bustling city is currently facing an unprecedented consumer winter. Videos taken by several bloggers show that from the city center to Pudong New Area, there is a scarcity of foot traffic in shopping malls and a large number of storefronts closed. The city’s consumer drive appears to be diminishing. Meanwhile, even five-star hotels are resorting to setting up stalls to sell affordable snacks, reflecting the top-down economic plight that is profoundly affecting the lives of ordinary people in the city.
Shanghai residents are currently facing various difficulties – it’s hard to make money, consumer spending is down, house prices continue to decline, businesses are closing down and laying off employees, and the unemployment rate among young people is on the rise, painting a grim picture of life in Shanghai.
In a recent video released by Shanghai blogger “Da Shi Ju,” scenes of desolation were captured at a large shopping mall in the Jing’an District. The video showed empty store spaces with only a billiards hall operating on the premises, while other stores remained closed. The blogger expressed shock at the current situation, with most shops shuttered except for a few patrons in Starbucks.
Similarly, a similar bleak picture unfolds in Pudong New Area. On August 12, Shanghai resident “Dao Ge” filmed the situation inside a large shopping mall, Lalaport, in Pudong New Area. Upon entering the mall in the afternoon, very few customers were seen, even in stores like UNIQLO and Xiaomi Electronics, indicating a lack of foot traffic.
“Dao Ge” continued to explore Lalaport and found even fewer people on the upper floors, expressing uncertainty about the mall’s current popularity compared to its grand opening period.
The impact of the economic downturn is also evident in transportation hubs. A recent video shared by blogger “The Chinese Uncle’s Stories from Vietnam” highlighted the stark reality of dwindling foot traffic and closed shops in the underground passage of Shanghai Railway Station. Many stores were shut even during the daytime, reflecting the somber atmosphere permeating the city.
Amid the downward trend in consumer spending, even the symbol of upscale dining – five-star hotels – are struggling. Reports have emerged of luxury hotels like Jinling Purple Mountain Hotel in Lujiazui area hosting “community canteens” during weekday evenings, offering budget-friendly dishes to attract customers.
The competition in the hotel industry intensifies, with established five-star hotels facing a critical juncture where transformation is key to survival. Large hotel chains’ rapid expansion has led to oversupply in the market, impacting business performance indicators. Despite efforts to diversify revenue streams, revenue from high-end dining at luxury hotels has decreased significantly in recent years, affecting their overall income.
With five-star hotels adopting strategies to tap into wider market segments through innovative sales channels, traditional snack stalls facing increased competition and pressure to survive. This shift in competition from high-end to low-end segments is exacerbating challenges for small-scale eateries, as prominent hotel brands encroach on their market share.
The ongoing struggle between renowned five-star hotels and local eateries is reshaping the dining landscape, with smaller establishments bearing the brunt of intensified competition. As major brands expand their services, attracting customers with their prestige, smaller eateries are left with a shrinking share of the market.
In this trickle-down competition from high-end establishments, the ultimate outcome is that while major brands can salvage themselves, ordinary individuals are left in increasingly dire straits. This cycle reflects the complexities of the shifting economic landscape, where adaptability and resilience are crucial for survival in a competitive environment.