A resident selects vegetables at a farmer's market in Suzhou, East China's Jiangsu Province, on Tuesday. Photo: cnsphotos

Confirmed human-to-human transmission of the novel coronavirus has triggered a large drop in China's consumer market, the main engine of the country's economic growth, during this year's Spring Festival. But experts say the virus is not likely to inhibit consumption demand and that there will be a boost in spending after the epidemic ends.

"There have been no more than 10 nearby residents visiting my shop each day recently, and sometimes that's less than five," said a supermarket owner in Beijing's Chaoyang District.

"Apart from fresh food, previously popular holiday products like wine, cigarettes and nuts are no longer their favored picks," the owner, who asked to remain anonymous, told the Global Times on Tuesday.

Revenues in the first month of the Year of Rat plummeted by more than 50 percent from last year, he said, saying this would be the most "severe winter" since he opened the business about 20 years ago.

The viral epidemic has kept would-be shoppers across the country at home, leading to a knock-on effect for retailers, which will harm domestic consumption in the short term, an expert said. 

Despite decreased numbers of consumers in shops, domestic and foreign retailers are strengthening efforts to join the country's battle against the viral epidemic by guaranteeing daily supplies.

"We are working closely with our suppliers and partners to ensure daily supplies in Wuhan, the epicenter of the virus outbreak in Central China's Hubei Province, and other cities across the country, as well as trying to stabilize prices," Chief Corporate Affairs Officer of Walmart China Daniel Shih told the Global Times on Tuesday.

"We are working hard to address various challenges during this difficult time," Shih said, noting, "Many of our associates proactively canceled their holidays and returned to the front line - whether that is a store, the Sam's Club or a distribution center - to provide customers and members with high-quality products and services during this difficult time."

Dada Group, China's leading on-demand retail and delivery platform, told the Global Times on Tuesday that it had established a virus prevention and control team and launched an upgraded contingency plan, including the strict review and removal of game meat products from its online platform and requiring deliverymen to wear masks, monitor their temperatures and disinfect food boxes.

Many online platforms including meituan.com, JDDJ and Hema Fresh have also introduced new delivery methods - "contactless" delivery - to minimize risks for both couriers and their customers.

Surging demand

Despite online businesses remaining active amid the virus outbreak, China's e-commerce businesses have taken a hit due to reduced delivery services during the extended holiday, Zhang Yi, CEO of Guangdong-based iiMedia Research and veteran internet observer, told the Global Times.

As most couriers are migrant workers and have not yet returned to cities from their hometowns due to the epidemic, it will still take some time for logistics capacity to recover, Zhang said, noting that this would directly affect the sales volumes of e-commerce platforms.

"Many would-be shoppers are worried that deliveries cannot be made on time, so they would rather give up [buying regular products]. But their need for fresh food on platforms like Hema Fresh, the Alibaba-backed cashless supermarket, is very strong," Zhang said.

Increased daily orders seem to have brought growth opportunities for fresh-food sales platforms during this special period, he noted.

From January 24, Hema's daily vegetable supplies have increased 50 percent over normal peak days, according to Huang Yifan, a Shanghai-based Hema vegetable buyer.

In a bid to respond to the recent surge in orders, Hema stores in Shanghai have hastily coordinated with more than 20 fresh food supply bases around Shanghai to collect, package and ship goods, Huang said. Several bases are offering double salaries to employees that return to work during the holiday.

Some traditional brick-and-mortar retailers have also adjusted their business operations.

Carrefour has endeavored to ensure market supplies and stabilize product prices in 209 stores across 51 Chinese cities, a Carrefour China representative told the Global Times.

He said that vegetable shipments rose 600 percent during the Spring Festival, and Carrefour has allocated more than 1,000 employees to support its instant delivery services.

A quick rebound

Despite the impact of the virus, industry representatives and experts say they are cautiously optimistic about domestic consumption and expect a "quick rebound" after the epidemic is controlled, thanks to a projected boost in services consumption which is currently muted during the epidemic.

The proportion of services consumption in per capita consumption expenditure reached 45.9 percent in 2019, up 1.7 percentage points year-on-year, official data shows.

"Staying at home actually helps stimulate people's consumption," said Zhao Ping, director of the international trade department at the China Council for the Promotion of International Trade.

"Staying at home cannot stop my impulse to shop, and my friends and I are all desperate to hang out, watch a movie and then have a big meal. But we know at this critical point that what we should do is stay inside and wait for the virus to be wiped out," a Beijing white-collar worker in her thirties, surnamed Lei, told the Global Times on Tuesday.

After the special period ends, sanitation goods such as face masks and disinfectant will become a new driving point for consumption, Zhao forecast.

Zhao told the Global Times on Monday that Chinese consumers' increased dependence on online shopping during the epidemic will continue to push the rapid growth of the online retail sector and help boost public confidence in e-commerce businesses.

China's current spending structure includes the consumption of goods and services, and the recovery of services consumption will play a vital role in the recovery of domestic consumption, Zhao said, forecasting that domestic consumption will recover faster than it did during SARS in 2003.

Uncertainties persist during the evolution of the epidemic. That will harm domestic consumption and drag the country's economic growth down further in the first quarter, said Wang Jun, deputy director of the department of information at the China Center for International Economic Exchanges. 

Wang forecasts that China's GDP growth in the first quarter will be around 5 percent.

Wang told the Global Times on Monday that if the virus can be controlled by the end of the first quarter, domestic consumption is likely to approach sound prospects from April.