Shanghai Rents Skyrocketing Profits Do Not Rise, A Large Number Of Shops Are Squeezed Closed By Online Stores

Learned from the Shanghai municipal CPPCC, the CPPCC Economic Committee and the city business development research center formed a research group (referred to as "research group"), recently completed the "Shanghai to accelerate the spanformation and upgrading of Business Research Report (Draft)" (short for "report").

The research group noticed that the rapid growth of online consumption, on the one hand, created consumption demand, and on the other hand, there was a certain crowding out effect on offline consumption.

The report shows that in September of 2014, Shanghai achieved 639 billion 389 million retail sales of consumer goods, an increase of 8.5% over the same period last year, down from 8.7% in the same period last year. Among them, the retail sales of Shanghai online stores reached 66 billion 934 million yuan, an increase of 21.7% over the previous year, accounting for 10.6% of the total retail sales of consumer goods.

Over the same period, sales of Shanghai department stores, large general supermarkets and standard supermarkets decreased by 7.1%, 3.8% and 2.9% respectively.

The group pointed out that the operating costs of Shanghai's commercial enterprises such as rents, labor, utilities, logistics and so on continued to rise. The rental cost and labor cost were 5 times and 10 times 20 years ago, respectively, but the gross margin of commodity sales had hardly increased. A large number of foreign-funded enterprises have closed their stores.

The report revealed a survey data from the Shanghai Municipal Commission of Commerce: in the first quarter of 2014, the rent per square meter of Nanjing West Road shops in Shanghai reached 83.5 yuan per day, and Xujiahui reached 74 yuan per day.

In the opinion of the research group, Shanghai Business is facing a critical stage of spanformation and upgrading. On the one hand, efforts must be made to build a world-class competitive business and consumption center with global competitiveness and prosperity. On the other hand, we must strictly control the total amount of commercial building area, effectively control the incremental speed of business planning, especially the excessive construction of super large and large commercial outlets.

The report pointed out that the interaction between online retail enterprises and traditional retail enterprises is still insufficient. Despite the emergence of a cooperative mode such as "online booking store", online retailers are eager to expand the scale with traditional retailers, while traditional retailers are worried that joint efforts will speed up their own recession and prefer to build their own network rather than a real alliance.

The research group suggested that the business administration departments of the Shanghai municipal government should guide commercial enterprises to speed up the linkage with new shop sales outlets such as new network sales, TV sales and telemarketing, so as to accelerate the formation of a full channel sales mode that integrates online and offline development. At the same time, we should learn from the experience of developed countries in the control of commercial rent, reduce the cost of commercial operation and improve the business environment by controlling the rent of shops and reducing the tax burden of shops. For small and micro businesses with basic livelihood, the rent is limited by the increase in the rent rate. Sales Tax And other related taxes should be levied or exempted.

On singles day, all kinds of promotional activities on the Internet are overwhelming, and this is not unfamiliar to the great pressure of the store. In the face of rising rental and employment costs, in recent years, physical stores have no longer turned a blind eye, and have launched various activities in the "double eleven", playing the name of "off the light" and promoting sales. The price is even more crazy than that of online stores.

Take Shenzhen as an example, Nanshan Maui department store A solid store has a 37.2 yuan cheaper than a net shop. According to sales personnel, "double eleven" period, the shop entity shop 90% goods will be cheaper than online shop. In this case, many stores have launched promotional activities in the face of the "challenge" of online stores. Moreover, shopping experience is more reassuring than shopping experience.

Insiders said that in recent years, the impact of Electronic Commerce on department stores has been increasing. The reason is that the discount of entities is not as good as that of online stores. However, in the traditional discount season, clothing that is going to be in season in the physical store, and clothing that has already been in season for two years, often has a very low discount. At this time, the price of the physical shop is often cheaper than that of the online store. The careful consumers often choose this opportunity and go to the physical shop to buy.