Physical Stores Closing Down Successively, Mainland Chinese Feel Economic Chill

Recently, the visible downturn of the Chinese economy has left the population on the mainland feeling the chill, witnessing physical stores closing in waves and barber shops shutting down in large numbers. After the closure of physical stores in Guangzhou, the store owners could only resort to setting up street stalls for their livelihood. Mainland residents expressed that with plummeting housing prices coupled with unemployment, those who still need to repay mortgages and debts are in the most dire situation, and many are finding it hard to cope.

An online influencer from Hefei, Anhui, named Nuomi, recently posted a video showing street-facing stores in prime locations emptying out by 6:30 in the evening. Even a once thriving large hotel has now closed down for good.

“Physical stores are closing on a large scale and can’t survive. It’s really hard to imagine how store owners can make ends meet. Many street-facing physical stores are also unable to continue. With the changing environment over the past two years, the number of physical stores is dwindling. It’s really difficult to survive. People are no longer shopping around, the streets are empty, and we don’t know where everyone has gone. Physical stores are closing down in waves.”

Nuomi mentioned that even landlords who used to rely on rental income are not faring well. The storefronts they invested heavily in are now sitting unutilized. Overall, it’s mainly due to the unfavorable economic environment that ordinary people are left with little money in hand.

Another blogger from Guangzhou, An An, mentioned that the increasing number of physical stores closing down on main streets is due to the high operational costs of running traditional stores while foot traffic continues to decline, making it impossible to sustain the revenue source for physical stores.

She stated that those who are no longer operating physical stores still need to make a living. She recently visited a night market in Panyu District of Guangzhou and found hundreds of stalls offering various snacks and clothing items. With the rise of street vendor economy, more people are opting to rent stalls and set up street stalls rather than invest in physical stores. The traditional business model mostly focused on physical stores, but rising rent from landlords, high procurement costs for intermediaries, and a decrease in foot traffic have made it challenging to continue.

Most consumers are now choosing to shop at street stalls rather than physical stores.

In recent times, many mainland residents have noted the closure of numerous barbershops in their local areas.

A self-media influencer from Hebei, Liren Xia, mentioned that in the recent period, many barbershops have shut down one after another.

She said, “After three years of the epidemic, making money has become increasingly difficult. Those with foresight have started considering how to break away from this situation quickly. Therefore, the barber industry has become a preferred means for people to earn money. After all, in our daily lives, who doesn’t need a haircut, be it the elderly, children, men, or women? Opening a barber shop doesn’t require a large storefront or substantial investment. With a room of around ten square meters, simple hairdressing tools and equipment, one can start a business with just a few thousand yuan.”

“The skills of barbers are now simpler than before; some people in their thirties or forties can learn in a few months at a barber shop that trains apprentices and then open their own stores. Since they charge low fees, starting at five yuan a few years ago and later increasing to ten yuan, the elderly in the neighborhood prefer nearby barber shops, making it easy to earn some living expenses,” she added.

Why are many barbershops closing down now? Liren Xia explained that the reasons have subverted people’s expectations. Firstly, the price of haircuts has been on the rise. Over the past two to three years, haircut prices have increased from five or ten yuan to thirty yuan, which is unacceptable for the elderly. To save money, they now get haircuts every three months instead of monthly, resulting in no significant difference compared to the previous prices. Furthermore, with more and more small barbershops opening, business at these small establishments has become increasingly difficult. Some struggling shops eventually had to close their doors.

Secondly, modern barbershops have grown in size and added many service items such as beauty and skincare treatments, hair care, etc., that the elderly are not interested in. Even for a basic haircut at these upscale beauty shops, customers have to spend nearly a hundred yuan. Getting a perm at such shops costs at least four to five hundred yuan. The elderly, who wish to spend a minimal amount on a haircut, would not visit such high-end places. Even if these upscale shops have high profits, the customer base is shrinking continuously. In the long run, they struggle to sustain their operations.

“My friend spent five thousand yuan to get a VIP card at a beauty and hair salon. Before she could spend a thousand yuan, she found the store had changed its name when she went there for a haircut. The salon owner had disappeared with the money. Hence, many large beauty and hair care institutions have closed down. Even smaller barber shops are barely managing. Many middle-aged and elderly people have resorted to purchasing their own barber kits online and cutting their hair at home,” she explained.

A blogger from Hainan, Cao Duoyu, recently stated that all industries are currently being pessimistically portrayed, and everyone can clearly feel the economic chill. This judgment is correct; in the unfavorable overall environment, everyone is feeling despair. If we delve deeper, many individuals might not be able to endure much longer and won’t be able to hold on until dawn.

Cao Duoyu listed several depressing scenarios faced by the population: those who have incurred losses from property purchases, especially those who bought houses at high prices between 2015 and 2021, are now facing severe declines in property value, nullifying more than a decade of efforts and leading to negative net worth; people who have lost their jobs; and the most unfortunate scenario is a combination of the two along with high debts.

At present, it is beyond doubt that the economic conditions are unfavorable, akin to searching for food in winter, which is not fruitful. Those who need to repay mortgages, car loans, bear the burden of their children’s education, and cover medical expenses for the elderly are finding it overwhelming.