Cheng checks a takeout order with a deliveryman.
Crushing Impact of COVID-19
Cheng, 32 years old, is from Zhangjiakou City of Hebei, a province neighboring Beijing, the capital of China. He came to the capital 12 years ago, and worked as a deliveryman before opening a fast food store close to the Beijing Zoo with his savings in September 2019. “I was preparing for a peak season of business, but out of nowhere the epidemic broke out, and my store saw zero income for three months.” He had to close the store temporarily in February.
The catering and tourism industries have been hit the hardest during the epidemic. A report by the China Cuisine Association about the impact of COVID-19 on restaurants shows that up to 78 percent of businesses in the industry lost 100 percent of their revenue during the first few months of 2020. During the seven-day Chinese New Year holiday (January 24-30) alone, the epidemic cost the sector a whopping RMB 500 billion, plunging it into an unprecedented predicament.
As the situation improved in Beijing in March, restaurants re-opened. Customers trickled back, and pent-up demand rebounded. Many restaurant owners said that business recovered faster than they expected.
“The restaurants near commercial and residential districts are seeing a steep surge in business, but it is not the case here.” Cheng’s eatery is located close to the Beijing Zoo and relies heavily on tourists. As inter-regional travel was still suspended, he received much fewer customers, and struggled with monthly losses of RMB 30,000. Having initially invested over RMB 500,000 in his eatery, Cheng resolved not to close it down before doing everything possible. So he turned his eyes to online booking.
“I am really sorry. The chef may have made a mistake. I have refunded you.” Cheng called every customer who filed a complaint about his food, and tried to solve it to their satisfaction. Not long ago he registered with Meituan, China’s leading food shopping and delivery platform. There have not been many orders online thus far, but he takes every one seriously. Meanwhile, he has created a produce sales space in WeChat, serving about 200 people living or working in the vicinity of his eatery. “The takeout business earns me about RMB 1,000 everyday, still far from enough to cover the rent, utility bills, and workers’ salaries,” he said.
Cheng Cheng’s fast food store is located near the Beijing Zoo.
At a State Council meeting on April 21, Premier Li Keqiang called for state-owned enterprises and public institutions to take the lead in offering rent relief to micro, small, and self-employed businesses. Less than a week later, Cheng received a three-month rent exemption. “The rent for my store is RMB 50,000 a month, so the exemption for three months means a lot to me. In addition, my franchisee has written off six-month management fees.” To open up more channels of income, Cheng also began to promote farm produce of his hometown among his Beijing customers.
Unlimited Potential of the Internet
The district where the Beijing Zoo is located is under transformation, with more companies scheduled to move in during the first half of this year if the epidemic had not struck. Cheng had expected their employees would bring a boost to his business. After this hope was dashed by the deadly virus, Cheng had to turn to WeChat e-commerce to keep his business alive. “I reached out to agricultural cooperatives in my hometown and offered to work as their agent in Beijing.” This new business is now his main source of income.
The epidemic impeded the sales of farm produce from Zhangjiakou. Consequently, when contacted by Cheng, local cooperatives responded positively. Cheng showed the reporter screenshots from cameras he installed at a pig farm in his hometown, pointing to the good hygene of its environment. In addition to pork, he also sells grapes, apples, and sweet patatoes from Zhangjiakou, generating a montly revenue averaging between RMB 20,000 to 30,000.
Now the business of his eatery is gradually recovering. While tending to his offline store, Cheng continues to expand his online business. The era of Internet and fast development of modern logistics has opened up immense opportunities for aspiring young enterpreneurs like him.
Cheng looks forward to the days when farm and aquatic products from his hometown could be shipped to Beijing through high-speed railways, which can cut the time from the field/pond to the diners’ tables in Beijing to four hours. The government work report of this year announced that the state will introduce more policies to advance the Internet Plus program and expand the digital economy. Cheng cannot wait to see their implementation and the positive effects they will have on new business modes.
He also has a proposal for policymakers: “The situations of restaurants are different. It will be great if more rent exemptions are granted to those located near tourist sites.”