Despite some reports by analytics firms of jumps in bookings of domestic flights and movie tickets, the moves are from low bases and make up a picture that clashes with scenes of empty subway seats at peak hour in major cities such as Beijing and Shanghai.
Re-opening queues have been more common outside pharmacies, rather than malls and stores, as people stock up on antigen tests and medicines to treat cold and flu symptoms.
A spa at a mall in downtown Beijing that resumed business on Friday said most staff had returned but customers were far fewer.
“Because of the epidemic, we are now using promotions and coupons to attract customers, which actually make us run at a loss,” one of the masseurs said.
TOTALLY UNPREPARED
Many businesses also say they were caught on the wrong foot, with an executive of a major hotel chain saying it was “totally unprepared for such a dramatic and drastic reopening”.
With many of its hotels still being used for quarantine purposes, it is proving tough to persuade owners to open and hire more workers after the zero-COVID campaign bred a conservative mindset, he told Reuters.
“The company is now adjusting its strategy so that 80 per cent of resource is focused on capitalising on ‘revenge’ spending, while reserving 20 per cent of hotel occupancy and staffing in case quarantine returns,” the executive added, on condition of anonymity.
Sales of items such as cosmetics, wine and spirits are likely to continue to suffer as cautious consumers stay at home in coming months, said Jason Yu, Greater China managing director of consumer research firm Kantar Worldpanel.
Instead, people will zero in on items that promote health and wellness, buying fewer of the instant noodles and frozen items popular with those preparing for lockdowns, he said.
Still, some analysts said that a re-opening, however bumpy, bodes well in the long term for companies committed to China.
Fast food brands, for example, will be able to get back to major expansions they had planned.
In 2023, new restaurant development in China will account for about half of the global openings of McDonald’s units, and about a third of new locations for Starbucks, said Bank of America analyst Sara Senatore.
Luca Solca, a luxury analyst with Bernstein, said the end of the curbs was good news for the luxury industry, heavily dependent on Chinese spending.
“My base-case scenario is that the softening should prompt Chinese consumers to go back to enjoying life and spending money – benefiting, among others, top luxury brands,” he said.
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