Faculty & Research

Insights

Street vendors have been returning to China’s urban areas as the government relaxed rules to keep more people in work and shore up the ailing economy amid the covid-19 pandemic.

Peng Siqing, professor with Peking University’s Guanghua School of Management, describes the current comeback of the stall economy — long viewed as a nuisance by officials keen on keeping their cities clean and smart — as an opportunity for rebirth. However, he stresses that upgrades in six aspects are crucial for its healthy development.

LOW END?

In many people’s minds, a street-stall economy is characterized by disorder, filth and shoddy goods for cheap buyers, and belongs to the past. In this mindset, chengguan, a para-police force that enforces urban rules, has been tasked with seizing unlicensed hawkers and impose fines.

“We should first give up the old thinking and rehabilitate the image of street vendors, seeing them as a normal economic existence,” Peng says. “A city should be warm and energetic enough to embrace street vendors instead of seeing them as urban smears or civilization’s backwaters.”

With lower thresholds and more flexibility, a street-stall economy is closer to citizens’ daily life and is able to offer goods of more local flavors, thus becoming a unique feature for its host cities. Also, differences in income levels and spending habits mean that a sound economy should incorporate different economic forms and sale platforms to meet varied demands. In this regard, the street-stall economy also needs respect, support, nourishment and optimization.

QUALITY CHECK

In the past, street hawkers indeed sold cheap,shoddy goods. After decades of reform and opening-up, Chinese consumers now have much higher demand and standards, and the quality associated with street vendors’ goods must rise accordingly in order to attract more consumers and earn their confidence, Peng says.

Food and health safety must be ensured, especially in the wake the covid-19 outbreak. Sellers must have a high awareness of hygiene and stick to safety codes, but related authorities also have a key role in inspecting vendors and punishing wrongdoers.

Meanwhile, street vendors should also guarantee high-standard services.“Things bought in the street included virtually no customer service in the old days, this needs to change if vendors want to have more repeat customers,” Peng adds.

MORE OF A LIFESTYLE

In the past, people mostly went to street vendors for cheap necessities. Ask prices, bargain, pay, and the entire bare-bone process is done. However, Peng notes that more people nowadays might visit hawkers for a different kind of experiences, seeking unique, niche goods that appeal to their own taste. Hawkers should therefore hone their language and communication skills in order to make customers feel joyous and at home, making their businesses part of people’s lifestyle.

BETTER MANAGEMENT

Better management is crucial for the creation of an orderly, convenient and warm business environment for buyers. For vendors, these might include providing more mobile payment options, establishing social-networking groups with loyal customers and forming associations to boost service and businesses. Regulators can inspect vendors’ conduct via social-networking ratings.

REGULATORS BE CALM

Local governments at all levels are pinning high hopes on street stall businesses to revive local economics and galvanize people’s livelihoods. However, Peng notes that some policies might not be proper.

He urges local governments to keep economic rules and people’s wills in mind when drafting related policies, refraining from overemphasis on surface performances. “Authorities should draw a clear line between what falls into their regulation duty and what does not, giving enough space for hawkers’ businesses while maintaining effective regulation enforcement.”

Peng calls for meticulous research into all interest parties in the vendor businesses (sellers, workers, customers and regulators) so as to grasp their difficulties and issues and figure out a way to solve them, with better efforts to review residents’ feedbacks and simplify service procedures. Giving out coupons are a good way to stimulate this economy.

In addition, Peng warns that the real social and economic benefits of the street-stall economy still requires scientific evaluation, and authorities should not over-exaggerate its role.

LEND A HAND

While street stalls are undoubtedly the most significant part of this economy-stimulating drive, Peng notes that its entire industrial chain still has a lot of room for upgrade and optimization, citing e-commerce giants such as Alibaba and JD.com who facilitates hawkers in replenishing stocks, management, promotion of goods and business discount. Retail giant Suning even provides cold-chain storage service for hawkers free of charge.

According to Peng, these major brands’ help can be crucial for street vendors’ businesses to really take off.

© 2019 Guanghua School of Management Peking University