Wu Linguo, another electronics dealer who opened 22 storefronts in Zhongguancun said that his company suffered a 30 percent decrease in sales in November last year compared to the previous month, while December saw another 15 percent drop.
"My customers, both small and medium-sized companies and government customers have cancelled a number of purchase projects," said Wu. "Now individuals are our primary customers."
When the sales began to slump, Huang was trying every way to reverse the situation. However, bulk discounts, lucky draw and advertisements did not attract many customers. Huang said she kept losing money for six months.
As the sales decreased, small shops could not survive. Huang said these dealers were mainly newcomers with only one or two years' experience. Without regular customers, these shops were the most vulnerable.
On the other hand, the crisis gave the bigger dealers chances to snap up smaller ones in a bid to expand and diminish competitors. As some shops have closed, Wu rented some newly empty storefronts in November and December last year. Wu hoped his expansion would make profit when the economic situation improved.
Li Zhongjin, chief business officer of Dinghao Market, another major mall here, said earlier last month that about 5 percent of electronics shops in Zhongguancun area had gone out of business. Other industry insiders estimated a 30 percent drop of wholesale volume in Zhongguancun.
"It's difficult to predict when the financial crisis's impact on Zhongguancun's electronics market will come to the end," said Xia Wenjun, vice president of Hilon Capital Management Corp. Ltd., a company that manages the Hilon Plaza -- one of the most popular malls here.
Most shop owners expect the worst in 2009. Wu Linguo said his company would probably make no profit in 2008, and he thought an upturn would come next year. Huang hoped the sales would take a favorable turn at the end of this year.
In order to spur the ever-shrinking market and lower the overhead, most of the malls are cutting rent. Xia said that the rent of storefronts in Hilon Plaza would be cut down by 5 to 10 percent. After the thriving period of 2006 and 2007, the rent surged by as much as 40 percent since 2005.
