Back to normal? Tough healing ahead for Shanghai’s small businesses

Pent up demand is high but short-lived. Mom and pop shops in Shanghai still find it hard to make rent after reopening.

Photo by Wei Xianghui

Photo by Wei Xianghui

By WEI Xianghui


When Shanghai reopened on June 1, customers were lining up outside the door at LU Jiaming’s soup dumpling shop. Everything sold out within hours, and Lu was “happier than he had been in months.” But the next day, fewer people came. Over the long weekend after that, no improvement. A week later, a for-rent sign was up - business owners on the same block were closing up shop, and Lu thought he might as well give up too.

Lu has lived in Shanghai all his life. He worked for a state-owned real estate developer for most of his career. At the age of 50, he got bored, quit the old stable job and opened a soup dumpling restaurant. The business did well enough for him to move to a better and more expensive location in 2019, right before the pandemic broke out.

Stay home, stay rich

Although the restaurant reopened after a brief lockdown, it was never as popular as Lu thought it would be. “The shop was barely holding on after 2020,” Lu said. “The spring lockdown was the last straw.“

He has lost 400,000 yuan since 2020. “I wouldn’t have lost 400,000 yuan just sitting at home for two years. Running a restaurant is hard work. I’m here from 7am to 9pm every day. No weekend, no rest at all,” he said.

ZHOU Meng owns Mansion Huahua, a flower shop, the post-lockdown bounce back wasn’t enough to save her business. She delivered 220 flower baskets to a big client on June 3. Three days later, her shop bloomed its last. “I haven’t been able to make rent for months. So, I might as well save money on the lease if I can.”

A big portion of Mansion Huahua’s income came from flower arranging lessons. Selling flowers online means heaps of paperwork, and her staff couldn’t come to work. Zhou saw no way to make it through.

Lu had tried to negotiate a rent waiver to save his restaurant. Theoretically, small business owners are entitled to a six-month rent moratorium if the landlord is a state-owned company, and non-state landlords can get a 30 percent rent rebate if they give their tenants a six-month break as “encouraged by the government.” But Lu’s landlord, himself a small, private business operator, didn’t budge.

Life on the edge

Many businesses are struggling although the pent-up demand is real. YANG Qianye, the owner of pet groomer Yesyes, said even though she barely had time to take a nap since reopening, Yesyes is still “on the verge of going under.” The orders she is working on right now are mostly prepaid and canceled appointments booked more than two months ago. There is little new cash coming in, even though Yesyes is bleeding rent and wage every day.

“The lockdown is not a one-off thing. We deal with uncertainties every day and are trying to live with it,” said the owner of One The Road Store, a bar-and-curio-shop hybrid popular among Shanghai’s young professionals. The shop has already had its fill of fire drills during the week after it reopened. When it announced a block party with free beer for the upcoming long weekend on June 1, a few hundred people who couldn’t wait showed up that night and started boozing. The crowd alarmed the authorities, and the planned block party became a zoom happy hour. Less than a week later, on June 7, the entire district was locked down again.

On customerless afternoons, Lu Jiaming wraps up his affairs. When there is nothing left to be done, he sits alone in the restaurant and thinks about what could have made a difference. “They say help is on the way. I hope I’m still here when it comes” he said.