The Savills Blog

Light At the End of the Tunnel

China suffered the worst during the early days of the pandemic, however is now seeing daily improvements. We’re hopeful that the same will occur in Vietnam – sooner rather than later!

On behalf of the Savills Vietnam Commercial Team, I extend my warmest wishes to you and your family and hope you’re safe and healthy during this period of uncertainty.

China suffered the worst during the early days of the pandemic, however is now seeing daily improvements. We’re hopeful that the same will occur in Vietnam – sooner rather than later!

We’ve received an update from Savills China which gives us a first-hand account of what is expected on the other end of the pandemic – all of which are positive and point to full signs of recovery.

From Savills China Retail:

Impact of COVID-19 on the China Retail Market:

The Chinese Government put Wuhan on lockdown on Jan 23 (Chinese New Year Holiday was Jan 24 – Jan 30 which got extended). Around the same time, most of the workers were required to stay at home, and most of the restaurants and all the gyms and entertainment centers in China closed their doors to contain the Coronavirus spread. Some shopping malls closed, and some adjusted their business hours from 12 hours (10am-10pm) to 6-8 hours per day.

Shopping malls: Now, as China's coronavirus outbreak eases, consumers are gingerly returning to the shops. Shopping Malls in Shanghai are at 30% footfall levels (compared to pre-Corona levels). From this week, most of the shopping malls adjusted their business hours back to 10am-10pm and basically all the tenants reopened to the public. I chose to stay at home today but I was told by friends, there were tons of people in the iapm mall and IFC mall in Shanghai. In IAPM mall, I heard that it was difficult to find a parking space and you had to compete for seats at the coffee shops. Apple store was packed, and my friend was told that ipad pro is out of stock due to the home-schooling (schools are still closed). In IFC mall, shoppers waited in a long queue outside the fashion boutique of Chanel (see attached) and Hermes. I’ve enclosed a pic taken by my colleague. However, community malls may need more time to get the consumers go back to the mall. A few landlords have told me that footfall traffic is still way below their expectation.

Restaurants: Of course, some restaurants have shut down permanently as they are unable to cover labor and rental costs during this period. For those that survived, they needed to prepare all the requested documents for re-opening and submit to the government for approval. Once they got approval, they have been allowed to reopen. Please note that different districts in Shanghai have different regulations. For example, my client owns three bakeries (all street shop locations) in Shanghai, and he got approvals very quickly for his two stores, but the one in Jing’an district can only offer take-out or delivery service as of this week. Hai di Lao re-opened all of its 550 restaurants in China last week which was very exciting. We rushed to the restaurants immediately and found they had restrictions on crowds and the cap amount of people sitting at the same table was 4. We had 8 people that day so we split into two groups. Again, these rules are made by restaurants, with direction provided by the government. Popular restaurants remain popular after the Coronavirus outbreak. My colleague waited for one hour to get a table at a famous Japanese BBQ restaurant last night!

Gyms: Most of the gyms in China have re-opened excluding Beijing. They have introduced max capacity levels – allowing a max of 50 people in at a time (based on 30,000 sq ft) for a 90 minute period. After the 90 mins is up, the gym does a full clean for half an hour before letting the next 50 people in to work out and so on. People are having to book slots in at the gym rather than just turn up. Working well so far apparently (in that gyms can re-open and people can go) but nowhere near as convenient and flexible

Entertainments: Night clubs and KTV just opened a few days ago in Shanghai and most of the cities in China (all closed in Beijing), but consumers remain hesitant to go to these places. Cinemas remain closed in Shanghai. Disney Land remains closed while Haichang Ocean Park has opened this week. My friend who works for Haichang Ocean Park told me that Disney probably chooses not to open.

Museums and Galleries: Mostly opened but real-name registration is required.

Overall, things are getting better every week but a more robust rebound is going to take some time – consumers are still in the process of returning to normal after what has been a worrying few months. A full recovery will probably happen in the second half of the year. A few extra points:

• Limited domestic Chinese brand failures have been reported at this stage but expected in the next couple of weeks as cash flows are impacted

• Savills China are back in the office Mon-Fri but very cautious at weekends (still limited people going out and socializing, travelling etc)

• The most affected sectors have been retail, F&B, leisure and entertainment, gyms and education

• All of their international clients that are currently looking to expand into China (the likes of Urban Outfitters and Blue Bottle for example) are on hold until further notice

• ‘Revenge Spending’ doesn’t seem to be kicking in as quickly as people thought as so many jobs have been impacted therefore less disposable income

We eagerly await the ‘light at the end of the tunnel’ for Vietnam’s retail market.

In the meantime, if there is anything myself or Savills Vietnam can assist you with, rest assured we are here to help in any way and look forward to connecting with you in person when this experience is over.


Stay safe and healthy.

An Tu Thi Hong


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