These days, the street stalls that disappeared for a while from China’s medium and large cities have reappeared, and made popular an academic term: street stall economics.
Many now-famous entrepreneurs once ran street stalls — Huawei founder Ren Zhengfei had a stall selling slimming pills...and Alibaba founder Jack Ma sold small items in Yiwu, Zhejiang.
Street stall economics refers to people setting up stalls in marketplaces or on the street to sell mostly daily necessities and finger food. Their customers are mostly residents and ordinary people who do not earn much.
After the 1980s, the street stall economy thrived in various parts of China. Many now-famous entrepreneurs once ran street stalls — Huawei founder Ren Zhengfei had a stall selling slimming pills; Lenovo founder Liu Chuanzhi pedalled a flatbed tricycle around selling sports clothing; JD.com founder Liu Qiangdong sold CDs; and Alibaba founder Jack Ma sold small items in Yiwu, Zhejiang.
In the early stages of reform and opening up, with limited goods, incomplete logistics channels, and a tough job market, the street stall economy brought China’s market to life, resolved employment, and drove economic growth. But in recent years, the street stall economy is not what it was, and has been restricted or even banned in many medium or large cities.
This is mainly because there are a lot more channels for people to buy items. Besides malls, the rise of e-commerce has significantly reduced any room for the street stall economy. At the same time, officials in medium and large cities have started to regulate and clamp down on marketplaces in order to clean up the place and improve their image. Hawkers who set up pavement stalls naturally became a target for these officials.
In the past few years, conflicts between city officials and stallholders have drawn public attention. While there is sympathy for mobile hawkers as the underdog, and uncivilised enforcement methods by city officials are criticised, it is a fact that the street stall economy is on the decline in medium and large cities.
Some CEOs worth hundreds of millions have declared they are ready to set up stalls; for them, it would be a sort of performance art to cash in on the hype and get some publicity.
Now, with the coronavirus and the intensifying China-US conflict, China’s economy is facing new challenges — maintaining livelihoods and jobs has become the top priority for the authorities. The street stall economy is making a comeback, and even Chinese Premier Li Keqiang has spoken up for it at a press conference.
Right now, nearly 30 cities and regions in China have rolled out measures to support the street stall economy, and there is popular discussion about whether it can go back to its glory of the 1980s and 1990s.
However, many comments on the street stall economy have adopted a tone of ridicule. Some CEOs worth hundreds of millions have declared they are ready to set up stalls; for them, it would be a sort of performance art to cash in on the hype and get some publicity. On the other hand, some official media have also started to advocate the benefits of the street stall economy, and to list the success stories of some stallholders.
After all, consumers today — especially those in medium and large cities — are more particular, and it will be difficult for the street stall economy to have as large a consumer base as it did before.
For the ordinary people who truly need to make a living through setting up street stalls, the street stall economy is a welcome measure that will provide them with a new avenue to supplement their income. However, China’s economy and social environment have changed enormously since the 1980s and 1990s. The street stall economy can be one channel to increase employment and income, but it might be too late to get it to thrive.
Compared to regular malls, the street stall economy is rent-free, with limited regulation — that is the advantage of street stalls and how they make money. But this is precisely why issues such as the quality of items sold, especially hygiene standards of food items, remain a concern for consumers. After all, consumers today — especially those in medium and large cities — are more particular, and it will be difficult for the street stall economy to have as large a consumer base as it did before.
In large cities like Beijing and Shanghai, the revival of the street stall economy is even more difficult, not just because many consumers have “upgraded” their tastes, but also because city officials are unwilling to let their past years of effort in cleaning up the city come to nothing.
A WeChat public account “Chang’an Avenue Affairs” (长安街知事) under Beijing Daily ran an essay two days ago saying the “street stall economy does not suit Beijing”.
Two days ago, Beijing’s city administration bureau announced that enforcement agencies will step up on enforcement checks in various locations in Beijing and deal with violations that disrupt the order of surroundings in the city, such as setting up stalls and obstruction of walkways for business.
A WeChat public account “Chang’an Avenue Affairs” (长安街知事) under Beijing Daily ran an essay two days ago saying the “street stall economy does not suit Beijing”. The essay said whether the street stall economy suits a city has to be determined based on how that city positions itself and its prevailing circumstances, rather than blindly following trends.
That is to say, Beijing’s city officials will not let the street stall economy rise again in Beijing, and other large cities may follow its example.
But as an assistance measure for those in difficulties, there is still a lot of room for the street stall economy to survive in most of the middle tier and smaller cities, as well as farming villages in China. Even as the authorities loosen up on and support the street stall economy, they also need to implement the necessary regulations and not allow these streets to become synonyms for squalor and poor-quality products. Otherwise, the street stall economy will fail to improve livelihoods and provide jobs for people.