Is the Street Stall Economy Possible for Sustainable Development?

By Kaiyue Zheng, Yihang Feng, Yujing Zheng

In the early summer of 2020, “street-stall economy” became a much-discussed term in China, just after Chinese Premier Li Keqiang praised and voiced his support for such an economy in his speech in June. Tens of thousands of people devoted themselves to the street vending economy, bringing long-lost prosperity to the cities and the streets, right after the pandemic.

However, the heat of the street stall economy soon turned out to be a flash in the pan. Lots of problems came up, such as dirty and noisy streets, fake and shoddy goods, traffic jams, unhygienic and uncivilized behavior. And more than 90% of the new vendors have left the market because profit fell short of expectations, according to several market administration officers.

Then people have a question: is the street stall economy possible for sustainable development?

There is no doubt that street stalls are the embodiment of urban vitality, just as Premier Li described in his well-known speech. Actually, during the long history in China, street vendors played an important role in city life, bringing convenience and entertainment for the community, which was irreplaceable by any other new business forms, neither supermarkets nor e-commerce.

Besides, the stall economy has the typical characteristics of “Three Low”: low barriers to entry, low risk of business, and low commodity price. So the low threshold and the high flexibility make it an ideal method to tackle the problem of employment of the labor force and keep social stability, which was the dominant reason for Premier Li’s words. As for customers, the stall economy offers a good choice for low price products, which can meet diversified consumer demands.

But the pressure brought by street vendors to urban management, environmental sanitation, transportation, and other aspects is obvious. Just as mentioned above, all these problems will lead to a failure of building a good city image and promoting high-quality economic development. That’s why the relationship between city administrative department and street vendors were strained in the past few years. The latter was always expelled by the former.

Therefore, the core of sustainable development of the street stall economy is to provide a designated, orderly space for stalls to run their businesses.

In Yiwu, a county in the middle of Zhejiang Province, there is an advanced example. Yiwu is the world’s largest distribution center of small commodities and has been identified as the world’s largest wholesale market of small goods. With mature product supply chains, a large amount of residents, and relatively open business policies, Yiwu’s business environment is energetic and innovative, which gave birth to a developed stall economy.

The busy catering area in Santing Road Night Market

The successful case of the stall economy in Yiwu is called Santing Road Night Market. The huge market locates in the city center, with 763 stalls. From 6 pm to 2 am next morning, there are tens of thousands of customers coming here for eating, shopping, or just hanging around, which is the most iconic image of the city’s nightlife. It is crowded but well-ordered. The most amazing thing is that it is just a clean and normal street at day time, without any clues of the night market.

The most significant reason for the ordered prosperity is long-term strict management. In fact, the market has been run by Yiwu Market Development Service Center, an official department, for more than 30 years.

According to the market management director, they have built a mature management mechanism in the market. All the stalls are required for business licenses, which is rare in the street stall economy. And the management department also strictly controls the types of business and unifies stall construction requirements. For catering stalls, they have to follow a series of food safety regulations, including food source monitoring, standard uniform, sanitation supervision, and so on.

The management team keeps inspecting every day to make sure everything operates well under the system. Sometimes, they will help to coordinate consumption disputes. As for some stalls who fail to obey some rules, they will face punishments including warning, recession, etc. Each punishment will be published to all vendors in the market management Wechat group, for noticing all.

Also, there is a police team keep the peace, and a group of sanitation workers to keep the street clean. In the early morning, after all the stalls closing, the street will turn back to clean and quiet, waiting for a new sunrise.

Furthermore, the management team has made great efforts on the marketing of the market, to build its brand and attract more and more customers. With integrated marketing both in traditional and new media, including paper reports and live streaming, etc., now the Santing Road Night Market has become internet-famous sightseeing in Yiwu.

A coupon of Santing Road Night Market, distributed by the management team

In addition to scientific management based on local situations, professional vendors are another key success factor of the stall economy.

Though the threshold of this economy is not as high as other businesses, instability and hardships are considerable challenges for all street vendors. For example, street business relies on weather a lot. Rain or snow, hot summer or cold winter, both will exert a tremendous influence on customer traffic. What’s worse, the mobility of business determines a low customer stickiness. Few vendors have repeat customers, especially for those who always change stall locations.

Hence, it’s not easy to run a street business as it looks. During the field survey, all those successful vendors have similar characteristics: full-time, professional, hardworking. Quite a lot of vendors in Santing Night Market have engaged in the business for more than ten years. Those experienced vendors have a stable supply chain and appropriate product quality at competitive prices. Some stalls have even built their awareness around the area, like “Laowang fried potato cake”, and won more and more new and old customers.

A vendor pointed out the truth behind the street stall economy: “As long as you take a street stall like a normal stall, and run it continuously and professionally, you will earn money.”

Dusk is the beginning of Santing Road Night Market

Above all, though the heat of the stall economy has passed, street stalls won’t disappear. Strict management mechanisms and professional vendors will create a better tomorrow for the stall economy.

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