A Come Back Story or a Mirage - Story of China's Street Vendors
Street Market in Haikou, Hainan. Photo Credit: Calvin Wong
China’s “Two Session” meetings concluded last week announcing a range of policies and reforms as expected Most of the coverage of the Two Sessions were unfortunately turned to the sensitive issues. One overlooked topic from the Two Sessions came to the fore this week as Premier Li Keqiang sang praises for the city of Chengdu and Yantai both for their support for small businesses and the loosening of restrictions on street vendors which was credited with the creation of 100,000 jobs in Chengdu alone. He is now doubling down on street vendors and small businesses as they are an important source of jobs and the “fire” of China’s economy. The government is keen to look at local successes as we are in an uncharted territory of a post Covid-19 recovery. At the same press conference, Premier Li said there are 600 million people in China making less than ￥1090 yuan per month, with a high concentration in the rural countryside, China faces immense pressure to continue urbanization and sustain employment and business growth.
According to China’s Central Government statistics, SMEs account for more than 90 percent of enterprises in China, contribute nearly half of all tax revenue, contribute 60% of GDP, and account for 80% of urban employment. While no official figures are available for the economic contribution of street vendors, street vendors were once abundant across Chinese cities and served as a meeting place of cultures and convenience. As cities continue to modernize, stricter food and safety regulations, deep penetration of convenience stores, traffic congestion, bike sharing and on-demand e-commerce all but replaced the role that street vendors once had with its neighbors.
With the Central Government throwing their full support from the top down, corporations have followed quickly. Alibaba’s wholesale marketplace 1688.com, have stated plans to help street vendors connect with factories and offer interest free loans, and Tencent’s WeChat is stepping up support to help street vendors digitize their operations, such as training for WeChat Pay and running WeChat Enterprise accounts to manage ‘private traffic’ and stay in touch with customers through group chat. In addition to technology firms, ecosystem providers also benefited. In a story in the Wall Street Journal, it noted that Shanghai-listed Yindu Kitchen Equipment, which sells cooking equipment like griddles, gained 46% this week. Hong Kong-listed Wuling Motors has a new cargo van that could turn into a mobile stall, according to a post Wednesday on its WeChat account. The stock has surged 150% in the past two days.
Baidu Index- Mention of ‘Street Vendor Economy’ vs. ‘One Belt Road’ from May 23rd to Jun 4th
Consumers have taken noticed as well, on Baidu, the engagement for Street Vendor Economy content shot up dramatically in the past week. The trend also spurred urban legends and memes. A story surfaced of a 20-something white collar worker in Chengdu who was able to save and buy a save used Audi after making an extra ￥4000 RMB per night by selling clothes on the streets after work set off a debate on the profitability of the business model. A meme, by artist jiangchacha (姜茶茶), illustrated what would it look like if major companies open their own store, has already exceeded 25K views within a few hours of posting. There is no doubt that countless memes and stories will emerge in the coming days, and we are even more certain that we will see corporates tap this opportunity either via food trucks, mobile kitchens, live streaming vendor, or a street hawking reality show coming near you.