With the persistence of the epidemic in the past two years, many people are thinking about a problem. China has a population of 1.4 billion. According to the truth, the consumption brought by the huge population will not make business difficult. However, the reality is that businesses in various industries are getting harder and harder to do, and there are three main reasons for this. So, what are these three reasons?

first, the impact of the epidemic

from last year, although there was no large-scale outbreak like that in 2121 in China, there were still sporadic outbreaks in many parts of the country. Once the epidemic breaks out, all localities will take emergency epidemic prevention and control measures. Among many epidemic prevention and control measures, offline store closure is basically the most common. Once the store is closed, the loss is very heavy for the physical store.

in addition to paying high rents, physical stores also need to pay staff salaries. For the industry represented by fresh food, because the products such as vegetables and fruits require fast circulation, if the store is closed for a relatively long time and there is no cold storage, it means that these physical stores must also bear the cost of goods loss. In the case of multiple costs together, what does the physical store rely on to achieve profitability?

Take the catering industry as an example. Because the main part of China's catering industry is small and medium-sized enterprises, there is a certain gap between small and medium-sized enterprises and large enterprises in terms of chain operation and market concentration due to the limitations of funds, manpower and material resources. However, if the proportion of small and medium-sized enterprises in an industry is too high, then the concentration of the market will often be low and the scale effect of the industry is not significant.

In today's increasingly fierce competition in the catering market, small and medium-sized enterprises will show a series of problems, such as high customer mobility, insufficient stickiness, unsatisfactory use of online platforms, and tight cash flow. The results of China Catering Annual Report show that the market share of the top 111 catering enterprises is only 7%, and the main component of the catering market is still small and medium-sized enterprises, so there is still room for improvement in standardization and market concentration.

As the epidemic continues, the advantages of large chain enterprises are highlighted at this time. They have demonstrated their great self-help ability and tenacious vitality in crisis management through their good brand image, large scale and sufficient funds. In contrast, the self-help ability of small catering enterprises is slightly insufficient.

at the beginning of the epidemic, most small catering enterprises were forced to accept the blow brought by the epidemic, but some brand catering enterprises were able to take the initiative to respond according to the development trend of the epidemic, constantly update and optimize their business models, give full play to their existing resources to provide anti-epidemic assistance, on the one hand, reduce losses as much as possible, on the other hand, establish a good brand image and improve social influence.

in terms of financing ability of small and medium-sized catering industry, it is easier for large chain enterprises to obtain bank loans and social support than small enterprises. In the stage of continuous development of the epidemic, some small catering enterprises with tight capital flow or even broken chains closed down, while some large chain enterprises took this opportunity to expand financing. The excessively dispersed form of industrial capital makes the catering industry, which is dominated by small-scale enterprises, obviously lack the ability to resist risks.

Second, the epidemic has led to a decline in people's income

According to the relevant theories of economics, besides people's current income, the factors that affect people's consumption also have a great impact on their expected income in the future. For example, in the first two years before the outbreak, when you saw a dress of several hundred yuan in a shopping mall, you would buy it without thinking, even if you used a credit card.

At this time, people are optimistic about their expected income, but as the epidemic continues, the cost of raw materials has continued to rise since last year, and corporate profits have been severely compressed. In this case, many small and medium-sized enterprises either fall into bankruptcy or save themselves through layoffs. Even last year, Internet companies, once regarded by the outside world as high-paying industries, also fell into the wave of layoffs.

At this time, people are generally pessimistic about their expected income in the future, which also leads to the fact that even if they have money, they dare not spend it at will. On the contrary, the money will be deposited in the bank to resist the uncertain factors of future families, and when people dare not spend, this also makes China's consumer market fall into a trough. How can we make money by doing business under such circumstances?

third, the impact of e-commerce industry

in fact, the impact of e-commerce on the physical industry did not begin last year. It has had a long impact on entities, especially in the two years since the outbreak of the epidemic, and the rapid rise of live e-commerce has made the living space of many physical stores worrying. The impact of e-commerce on entities is multifaceted, such as price impact, transaction time and space impact, cost impact and so on.

For example, the Spring Festival is coming, and every household begins to buy new year's goods. For the same new year's goods, the selling price in your area is 211 yuan, while the selling price in Pinduoduo is 121 yuan. At this time, many people will choose to go to Pinduoduo to buy. For physical stores, this also means a serious loss of customers. But this kind of loss is not perceived by the owner of the physical store. However, compared with the e-commerce channel, it is difficult for physical stores to make the price down.

The reason is that the rental cost and personnel cost account for a high proportion in the cost of physical stores. Even many entity bosses have joked that they are working for the landlord. In the case of relatively high cost, entity bosses can only achieve profitability by raising the price of goods. Otherwise, for physical stores, it is a loss. However, it has also made it more and more difficult to do business in physical stores, and there is no good way to solve this situation in the short term.

conclusion:

from the above analysis, although China has a huge population. However, the consumption power brought by the huge population is limited, especially in the past two years, under the impact of the epidemic, Chinese people are generally pessimistic about the expected income in the future, leading to a serious degradation of the consumer market. Obviously, this situation will not be improved very well in a short time.