Ken and Dolores’ unlicensed Beijing bar is behind the unmarked doors of the gritty residential tower where a group of crude men play cards in the foyer.
In a remodeled apartment in Beijing’s Olympic Park area, Ken, a civil engineer trained and trained to be identified by an English nickname, serves quirky cocktails at half or more of what was charged by traditional drinking facilities in China’s capital.
The couple’s “Homebar” is one of dozens born throughout the city as the domestic economic recession drives cost-conscious consumers to throw away more expensive traditional alternatives.
Their spread reminds us that the world’s second-largest economy was already struggling with weak household consumption, even before President Donald Trump launched his trade war this year.
“The whole catering business is very bad,” Dolores said.
So the couple set up a Chinese speaker. This is low overhead as it doesn’t pay the licensing fee. “There aren’t many bars in Beijing that make money.”
Door to home bar for home construction in Beijing © Gilles Sabrie/ft
Beijing’s finest restaurants and bars once featured the glittering prosperity of China’s economic miracles. But government crackdowns in the property, internet and education sectors have been hit by the employment and salaries of the city and the depressed sentiment.
In the financial industry, brutal government pay cuts and bonus clawbacks (some of which are retroactive) further undermined confidence.
This is a blow to the city’s catering sector, where profits last year fell 81% year-on-year, according to the Beijing Bureau of Statistics. In the first quarter of this year, the industry lost RMB52MN ($7 billion) because the industry is better than last year’s RMB454MN loss in the same period, but still negative. Overall sales continued to decline over the period.
“Our main customers once came from real estate, finance, film, advertising and media-related industries,” said Wang, restro, a bistro restro specializing in Yunnan cuisine in the southwestern part of China. Today, “This group either spent, stopped coming completely, or chose another option.”
Home bars have been growing since early last year amid wider concerns about China’s economic outlook © Gilles Sabrie/ft
Pain has been felt throughout the catering industry, Wang Puzhong, chief executive of local businesses’ delivery services at Meituan, told the meeting in September.
“We are facing the biggest change in the Chinese restaurant industry in 30 years,” Wang said.
The government wants to stimulate domestic consumption this year, and Xi Jinping met private sector entrepreneurs with signs that the crackdown has ended. However, the messages are not filtered yet.
One of the co-owners of Beijing’s restaurant chain said that part of the issue is from departures from wealthy capitals and young people seeking better opportunities in their jobs and elsewhere.
Customers were also downgraded to more discount options.
At the same time, a new mall packed with restaurants is opening, exacerbating the excess supply of eateries and the worsening cutthroat competition, the co-owner said.
“The average spending restaurant is hit hard,” they said. “There’s a double whammy of overcapacity and deepening consumer tightness.”
The owner of a premium Japanese fusion restaurant in Beijing said he used an average RMB 5,000 per meal, which fell by about half. Previously, each restaurant would have around 15-20 bottles of wine each and 15-20 bottles of wine per day. Currently, “good days” will be four to five bottles of the RMB500-RMB800.
Home Bar Owner Pours Gin into Customer’s Mouth ©Gilles Sabrie/ft
Former customers in the financial and internet sector have had “very tough times,” he said, with revenues falling by around 40-70%. “Today, especially middle class customers, nowadays, they are not willing to spend money on food because they now want high value in their money.”
The owner of another restaurant, who runs a small bistro in Beijing’s upscale San Litun region and was asked to be identified only by the surname Cao, said his clients had almost stopped ordering wine in bottles.
“And sometimes, when ordering by glass, customers pay more attention to prices.”
The issue of restaurants in Beijing’s formal sector has led some hospitality entrepreneurs to turn to illegal home bars.
The bar in one appointed apartment in the northeast northeast, near the offices of large domestic internet companies and German car manufacturers, serves all-you-can-eat whiskey and cocktails for RMB199 per person.
“People need to party and socialise, but nightclubs are very expensive,” said Dorothy, a co-owner who cheered on alongside a group of young men from the internet company who play drinking games.
Her business partner said her last name was Yang and her work that day was one of the German car manufacturers, inspired by her university days in Germany, where students held a rare house party in China.
Yang prepares drinks at his home bar © Gilles Sabrie/ft
“It’s a space where people can socialize and have a house party-like gathering,” he said of the home bar. “Most of our customers are in their early 20s. They work for a nearby company.”
Partners run a special “matchmaking” night to help young people meet in a society where romance is declining. 57% of university students expressed no interest in the relationship in a survey published by the Health Commission Newspaper’s population every day last year.
However, Yang acknowledged the bar’s informal status and unusual locations, making it difficult to attract single women and, even if the costs were low, the business was a financial throw.
“We’re far from making money. Rent and decorations cost a lot, and at this point we only open once or twice a week.”
Police crackdowns were also constant risks, said Ken, a home bar at Olympic Park, and the cocktails include “hot pot coffee,” inspired by traditional Chinese cuisine and Halloween-themed “zombies.”
Ken cited the experience of another couple who ran a home bar but was questioned by police after being reported to their neighbors. “They were so scary,” he said.
