This piece is going to be a bit more than just a news, splash, i.e. a few places closing. We had an inkling to respond to some sentiments that another prolific Shanghai writer recently made. So, don't just read the closings. There's some substance at the bottom that might help with providing some "context."

Charbon Has Closed.

A real shame, for two reasons:

• a) It was close to my house.
  
• b) It was a favorite.
  

For those not familiar, Charbon was a fusion Mediterranean spot from 3-Michelin-starred Chef Paul Pairet (Ultraviolet, Mr & Mrs Bund, Polux). We loved this place for its casual yet upscale vibe and Paul's unmistakable palette. His flavor reductions, rooted in French culinary precision and married to influences from Persia and Turkey, were just... a chef's kiss. This one stings. Big-time bummer.

Charbon's last service was on New Year's Eve. While it seemed to draw decent crowds at times, it had been struggling throughout 2024 due to inconsistent foot traffic on the top floors of IAPM. Operating two floors at that scale proved challenging without enough events or parties to fill the upstairs space, which despite being a gorgeous space, was a "if you know, you know" sort of deal given that you had to enter from the floor below.

There's also the sense (echoed by many guests) that Charbon might have thrived more as a standalone eatery in a cool, street-level spot, rather than inside a mall. Maybe in another life? Either way, this is a tough one to say goodbye to. Big fat bummer.

La Siesta is Closing at the End of this Month:

Chef Sergio Moreno told us that the concept was solid, but his opportunities abroad have begun taking up more of his time, as well as his partner's renewed focus on import/export. They are having two days of "farewell" party where they empty out all the food and beverages on January 25 and 26.

& BOR Eatery/ Funk N Kale

Before people point to "the sky is falling, omg everything is closing," these two establishments are hanging up their aprons for another common factor in Shanghai...landlord issues.

Willis Group intends to open a new venue, they are shopping around for spaces right now, however, they are interested in re-inventing on the conceptual side of things. But both BOR Eatery and Funk N Kale on Anfu Road are shuttering because of "end of lease... no option to extend."

Mad Dragon

For CVL Group, Mad Dragon faced the issue of both the landlord and sub-landlord not wanting to renew the contract. They don't intend to re-launch the concept because "beer is downtrend" according to sources within. Also, they just launched Pomodoro, keeping with their company's habit of "doing new concepts."

When Is BIG NEWS Big Enough?

Recently, another writer took aim at the way some publications (most likely ours) cover the closures of long-standing, expat-friendly establishments in Shanghai. The critique centered on whether these closures, like Sherpa's, truly constitute "BIG NEWS," especially when juxtaposed with events like General Motors losing half its market share in China – a comparison made with no small amount of well, feeling? I mean it was point No.1 on their top 5 things they hated for 2024.

We'd like to take a moment to engage with these points because the critique wasn't entirely unfounded.

Perspective Matters

First, let's address the elephant in the room. Yes, we were one of the publications that emphasized Sherpa's closure as BIG NEWS, and we stand by that assessment – for our audience. While the example of GM's woes might be headline-worthy for a different readership, we tailor our content to a specific slice of the English-speaking community in Shanghai. This includes expats, many of whom relied on Sherpa's, particularly those less familiar with local delivery giants like Ele.me (饿了么) or Meituan (美团). To them, this news is significant – perhaps not earth-shattering, but certainly newsworthy within the context of their daily lives.

The truth is, what qualifies as "news" is highly subjective, and what counts as "big" depends entirely on the reader. Our focus has always been on the human-scale stories that resonate with the expat community – what impacts their routines, preferences, and lifestyle.

However, Some Good Points Raised

That said, we also recognize the validity of some critiques raised. As they noted, closures like Sherpa's and The Camel Group stem, in part, from outdated business models struggling to compete in a rapidly evolving market. These are narratives worth exploring, and in hindsight, we might have delved deeper into these underlying trends. However, in the rush to get timely news to our readers, we focused more on the immediate impact than on broader industry analysis. But we're tempted to wade into that discussion.

But let's not dismiss the closures as mere "expat panic." They're part of a larger picture, one that reflects Shanghai's ongoing transformation. The F&B market here is not stagnant; it's dynamic, competitive and growing. New venues are thriving, older ones are innovating, and yes, some are bowing out. This evolution is natural, even healthy, for a vibrant, world-class city. So in that regard, we agree that things are in fact not melting down. In 1999 there was M on the Bund. Today, the Michelin guide has an extensive list dedicated just for Shanghai. Things have expanded (and continue to).

What's Really at Play?

Market Saturation and Upgrades

When Sherpa's launched, it had little competition. The same goes for The Camel, which thrived before mega-venues like Cages entered the scene. It's a 700-person venue, with entertainment for kids, and a menu that was created by a chef that has Michelin credibility. That's a tall order to compete with. Today, Shanghai is packed with options. 1999 there was M on the Bund. Today, Michelin has a guide just for Shanghai.

Marketing and Adaptation

In a hyper-competitive market like Shanghai, staying relevant demands constant reinvention and consistent brand presence. Some businesses have scaled back on customer acquisition and marketing "because of the economy," which inevitably makes them less "top of mind" among consumers and becomes a vicious spiral: Reduced visibility leads to declining relevance, which further discourages investment in growth. Remember, new places are opening in Shanghai. They are actively investing in brand visibility in some form or other. They have to. And for those willing to maintain or even increase their marketing efforts while others pull back, the payoff is a larger share of voice in a crowded market. It's a classic case of adapt or fade – Shanghai rewards those who stay in the game.

Changing Demographics

The expat community is not monolithic. With every wave of arrivals and departures, the landscape shifts. Businesses that once catered to long-term residents may find themselves unknown to newcomers. And unless you are top of mind, and have developed your own word-of-mouth presence, you're not going to get these Shanghai newbies in your seats. Food for thought.

Sub-Optimal Business Planning – A Look at Sherpa's

Sometimes, businesses just lose their way. When Mark Secchia first launched Sherpa's, it was a company truly by expats, for expats. The brand resonated deeply with Shanghai's expat community, fueled by a culture that celebrated creativity and connection. They made a name for themselves with clever campaigns like 500 RMB competitions on local media platforms for the best customer reviews, or photography contests showcasing "whatever creative thing you can do with your food delivery." They were always ahead of the curve, adding the trendiest restaurants expats couldn't wait to order from. own further. Assuming a mid-range commission rate of 20 percent, Sherpa's would be pulling in 1.44 million RMB in gross commission revenue. On top of that, with an average delivery fee of 40 RMB per order, they'd rake in another 1.44 million RMB. Combined, that's a substantial 2.88 million RMB in gross profits every month.

At its peak, Sherpa's was processing over 1,200 orders a day – that's an impressive 36,000 orders per month. With an average order value of 200 RMB, this translated to a hefty 7.2 million RMB in monthly order revenue.

Let's break that down further. Assuming a mid-range commission rate of 20 percent, Sherpa's would be pulling in 1.44 million RMB in gross commission revenue. On top of that, with an average delivery fee of 40 RMB per order, they'd rake in another 1.44 million RMB. Combined, that's a substantial 2.88 million RMB in gross profits every month.

Then came the Yum acquisition – and with it, a noticeable shift. The quirky, community-driven marketing efforts gave way to uninspired campaigns like "Pizza Month," "Burger Month," and "Pasta Month." Generic.

Strategic missteps compounded the issue. Sherpa's decided to integrate exclusively with a single-channel app, while its Beijing-based competitor, JSS, partnered with a multi-channel local platform, capturing a larger share of the market. To make matters worse, Sherpa's commission system penalized restaurants as order volumes dropped, making it unappealing for up-and-coming establishments to join the platform. The result? The hottest new restaurants were nowhere to be found at Sherpa's.

I personally resisted switching to Ele.me for years, but eventually, the draw of their better restaurant selection forced my hand (Ele.me was adding restaurants popular with expats, while Sherpa's was adding no-name places no one had ever heard of). And once I made the leap, another truth hit me hard: Sherpa's delivery infrastructure simply couldn't compete. Ele.me was faster – much faster.

The downward spiral was inevitable. A shrinking user base meant fewer orders for restaurants, leading to higher commissions for those that stuck around. Higher fees pushed even more restaurants away. Fewer options drove more users to rivals like JSS or Ele.me. And all the while, a dwindling marketing budget made it impossible for Sherpa's to reclaim its former glory. Internal sources told us, that by 2022, Sherpa's was processing half the order volume they were at their peak.

What was once a beloved expat staple had become a cautionary tale of how "corporatization" can cause you to lose your edge.

In closing

We appreciate the critique and the points raised by the other writer. We appreciate even more the fact that we're on the radar of a respected writer in the first place. The survival of businesses in this city is no small feat, and we salute those adapting to Shanghai's frenetic and fast-paced rhythm. At the same time, we'll continue to highlight stories that resonate with our readers, even if they don't always feel like "BIG NEWS" to everyone.

After all, the heart of what we do is about connection to Shanghai – whether it's a farewell to a familiar, old name or a celebration of what's next (of which there is plenty).