Shanghai firms play catchup with production ahead of major shopping spree
Challenges persist, but phased work resumption underway
Published: May 22, 2022 08:43 PM
Staff at an industry zone in Lianyungang, East China's Jiangsu Province sort packages on Friday, the day China's major e-commerce platforms including JD and Alibaba's Tmall celebrate this year 618 mid-year shopping festival. Photo: VCG

Staff at an industry zone in Lianyungang, East China's Jiangsu Province sort packages in 2021, the day China's major e-commerce platforms including JD and Alibaba's Tmall celebrate 618 mid-year shopping festival. Photo: VCG

Companies in Shanghai are preparing for the coming 618 mid-year shopping spree, another major online shopping festival in China apart from the Double 11 event, as the city pushes forward work resumption in phases, after its latest COVID-19 outbreak has been gradually put under control and a work resumption campaign is picking up pace. 

The upcoming 618 online sales event provides e-commerce platforms as well as retailers and factories with a major platform to boost sales, as they face various challenges, including the epidemic and falling retail sales in the Chinese market, analysts noted.

Though the challenges are still lingering, accelerated work resumption, improved epidemic situation and support measures will help boost overall consumption in the world's second-largest economy, analysts added.  

In the Shanghai production center of Nivea, a brand under German skincare company Beiersdorf, machines are rolling on all cylinders to stock up on products for the spree. Nearly 70 percent of the factory's employees have returned to their posts since late April, and they work under closed-loop management, the company told the Global Times.

The plant's capacity utilization rate has returned to about 70 percent of last year's level. The Shanghai facility is Nivea's only manufacturing center in China.

"The big China market has not come to a standstill. Customers' demand for high-quality products has not decreased. We are busy catching up on production," said Lei Kaiting, general manager of Beiersdorf Group's China corporate affairs department.

Some companies will launch new products in May or June despite the challenges. Yum China's fast food brand KFC, for example, plans a promotional campaign in mid-June, according to a statement sent by Yum China to the Global Times. 

Car company SAIC Motor, which was among the first batch of companies in Shanghai to be allowed to resume work, said it is still aiming to sell 6 million cars, a target set at the beginning of this year. 

Graphics: GT

Graphics: GT


But many companies are still facing challenges to return to pre-epidemic conditions. Many staffers are still confined in their neighborhoods and can't resume work. Some told the Global Times that they could not provide closed-loop working conditions for their employees. 

Factories are studying various solutions. Beiersdorf said it is building sample rooms and hygiene facilities to help employees return to work. 

Amore Pacific, a South Korean cosmetics brand, told the Global Times earlier that it is directing distributors and agents to use facilities such as logistics centers and warehouses in other regions of China to guarantee product supplies during the 6.18 shopping festival.

Independent e-commerce expert Lu Zhenwang told the Global Times on Sunday that he has reservations about the outlook for a consumption rebound on June 18, since the regional logistics industry in Shanghai is only working at about one-sixth of the pre-epidemic level, and consumption ability was affected by the outbreak and will take time to recover.

"Moreover, income stability for those in the tertiary industry, where catering and tourism account for a large part, has been constrained by the epidemic, another foreseeable hit to the consumption recovery," Lu said. 

While the consumption market is still digesting the pain, which is likely to mean a contraction in retail sales in the first half of the year, the market is expected to rebound in the second half if the epidemic situation eases, experts said.

Shanghai authorities issued a plan on Friday introducing a three-phase work resumption timetable. In the first stage that lasted until Saturday, Shanghai focused its efforts on restoring industrial and supply chains.

In the second stage that will last until May 31, Shanghai will expand work resumption, and certain areas will scrap requirements that employees have to apply for e-passes to return to work. In the third phase, Shanghai will speed up generalized work resumption.