Rebirth of the 'informal economy'

Street vendors are making a comeback as people shun restaurants and shopping malls amid the COVID-19 pandemic. Local govts are urged to give vendors a level playing field to enable them to develop sustainably. Luo Weiteng reports.

As policymakers worldwide hunt high and low for ways to reboot coronavirus-stricken economies, street vending seems to have come under the spotlight again and be making a surprise return, hopefully, in a sustainable manner.

Referred to as part and parcel of the "informal economy", which is not protected, regulated or often socially valued, street vendors are back making their mark on our post-pandemic streets.

According to the International Labor Organization, more than two billion people, or over 61 percent of the world's working population, were engaged in the "informal economy" in 2018, mainly in emerging and developing countries.

The impetus for a street-vending renaissance remains as old as time. So do the headaches that informal businesses often create.

"The street vendor economy, with its low entry cost, can be a new source of jobs and a fountain of wealth for particularly low-income populations. It makes urban life a lot convenient and helps pump up domestic demand," said Zhou Maohua, an analyst at China Everbright Bank's financial market department.

"In a public health crisis, it can be seen to encourage social distancing more easily than in over-crowded shopping malls," he noted.

Riding high on large young populations and climates perfect for outdoor gatherings, the street vendor economy fits in well with the lively night-time businesses and markets in the Guangdong-Hong Kong-Macao Greater Bay Area.

According to a study released by e-commerce behemoth Alibaba in July last year, Shenzhen and Guangzhou were among the top four mainland cities in night-time consumption. No wonder "street vending" once became the hottest buzzword in Shenzhen and Guangzhou, next only to Chengdu, according to data compiled by search engine giant Baidu.

However, Zhou pointed out, the most immediate and inevitable downside is the traffic congestion and pressures piled on public health management.

The recent nationwide debate on the street vendor economy as a solution, if not a stopgap measure for China's economic recovery, revokes memories of the unbridled development of informal businesses decades ago that ultimately gave way to the country's rapid urbanization, with most of the vendors being cleared from the streets in mega cities.

Ironically, the media nowadays seem to be filled with the nostalgia of the chaotic growth of street vending in the past. But they cannot shy away from the fact that years ago, stories about the irregularities and unsanitariness of street vendors had never failed to make headlines and essentially contributed to the societywide stereotype associated with the vending trade.

Chilling accounts of the illegal sale of gutter oil by unscrupulous vendors for use as cooking oil have never failed to haunt our memory.

Combined efforts needed

Ding Zuyu, chief executive of property agency E-House (China) Enterprise Holdings, believed such a stereotype is by no means the so-called "original sin" of street vending. However, it cannot be denied that problems behind the stereotype remain largely unsolved.

Drawing on the experience from flea markets in New York, Ding said what matters concern the combined efforts of governments, vendors and professional organizations to establish a sanitized and regulated trade that actually protects the public.

With governments and vendors playing the roles of "judges" and "players", respectively, though, the street vending economy cannot go without the participation of professional "organizers", who're mainly responsible for site and vendor selection, on-site organization and management, as well as offering operational support when necessary, he said.

Governments, in particular, grant such licenses to credible and qualified vendors to ensure the quality of products they sell. In New York, Ding noted, the licensing standards for food vendors are known to be the strictest. Permits and licenses have to be renewed on a biennial basis. At that time, governments will re-evaluate and review the eligibility of vendors.

As for the use of urban public space, Ding said self-employed businesses in New York are allowed to set up street stalls in functional areas designated for the vending trade during a specific period. By contrast, in unconventional areas for the vending trade, such as streets and city squares, vendors have to apply to local governments in advance before touting for business.

With local governments well positioned to be responsible for product quality control and public space planning, the professional "organizers" of the vending trade can virtually have their management risks effectively mitigated, enabling them to adopt a light-asset business model.

In China, enterprises like property developer Greenland Group, investment conglomerate Fosun International and property-investment group Kerry Properties had tried to act as "organizers" of the vending trade around their commercial real estate projects. Those attempts, aiming at directing the flow of people to those projects, turned out to be only temporary, with a fundamental lack of follow-up operational support, said Ding.

Likewise, in mainland cities like Chengdu and Foshan, where local governments took the lead in rolling out a set of supportive policies, much focus was placed on the role of governments as "judges", with little care given to professional organizations playing a part. As a result, vendors cannot really expect those policies to get effectively implemented, he added.

"Street vending should be an orchestration of governments, vendors and professional organizations. Not a single party can be omitted," Ding reckoned.

Self-branding critical

To be sure, street vending is a form of economic activity as ancient as China.

During the Tang Dynasty, free markets were already a part of local life, with vendors cropping up on busy streets or at the foot of temples to meet local demand.

Zhang Zeduan - a notable painter of the Song Dynasty - painted Along the River During the Qingming Festival, a revered scroll that depicts daily life during the time. Street vendors were prominently stationed in the busiest parts of the city, hawking food and goods. During the Song Dynasty, night markets, often found in corners of large cities, played a central role in Chinese nightlife.

Looking back on China's long history of street vending, the vending trade itself can go beyond hawking cheap food, cut-price gadgets and even knock-offs. It has what it takes to get rid of the label of nuisances and public health hazards, and become a tourist draw and the hallmark of lively humane cities. "How the vendors can truly showcase their characteristics and uniqueness is the key," Ding stressed, pointing to an issue of homogenization that, by and large, restricts the street vending economy from going further in China.

Apart from too many cookie-cutter food stalls peddling grilled fresh squid, churrasco and barbecued lamb kebabs, Ding believed that professional organizers and vendors should go the extra mile to inject more creativity into the vending trade.

In his view, the significance of branding can never be over-emphasized. "In China, local governments and self-employed informal businesses usually do not bother to build up their own brands, but they always have high hopes on an established, ready-made brand, such as the Shilin Night Market in Taiwan, to get a free ride. I think it's time to switch from such a short-sighted mentality," he said.

Pan Helin, executive director of the Digital Economy Academy of the Zhongnan University of Economics and Law, highlighted the unsustainability of the unvaried and toneless forms of street vending economy in many cities in China. As the world resets for growth in the post-pandemic era, with almost every industry embracing a "new normal", Pan believed the street vendor economy should also find a place in such a new normal.

"It cannot simply rely on imitation anymore. Instead, it should look to become a reflection element and a showcase of city character. This calls for much wisdom and creativity for urban management," Pan noted.

With local governments and professional organizations working hand in glove to create suitable, fertile ground for street vendors, Ding said China's street vending economy will be given the level playing field it deserves to develop in a sustainable, self-motivated manner.

Contact the writer at
sophia@chinadailyhk.com