The economic impact of COVID-19 is fairly rare in history, if not unprecedented.
How much loss has China, the first country to be hit by coronavirus, suffered? The official data shows that Chinese Q1 GDP has a year-on-year decrease of 6.8%, the first decrease in the last 40 years. In April, the urban unemployment rate was around 6%, the highest in recorded history. What’s more, the newly increased number of employment has an year-on-year decrease of 20%. According to Liu Feng, the chief economist of Galaxy Securities, there was nothing comparable with the economic impact of COVID-19 in the last hundred years of human history, which is mainly because of the plunge of both supply and demand. The demand side was weakened by the social distancing measures, while the supply side was affected by the stagnation of production. Thus, the cash flow of both firms and residents shrank.
Without a doubt, post-COVID China is urgently in need of economic recovery, with “stabilize employment and protect the livelihood of people” being the most important agenda at present. At the same time, “stall economy”, a concept that suddenly gained traction, seems to be a feasible solution.
Public attention to the “stall economy” originated from the May 28th press conference, where the Chinese Premier Li Keqiang released a series of alarming data: The average yearly disposable income of Chinese residents is 30,000 yuan, but for the 0.6 billion moderate and low-income citizens, the average monthly income is merely around 1,000 yuan. With this amount of money, one can hardly rent a house in a medium-sized city, let alone standing against the economic impact of COVID-19. “In the post-COVID era, livelihood is the most important thing”, said Premiere Li.
Shortly after that, on June 1, after Premier Li visited some street vendors in the Shandong Province, he commented, surprisingly, “Stall economy and street vendors are important sources of employment. They are lively, and are as vital as ‘high-end’ (economy) in terms of China’s development.” This is surprising because street vendors have always been the main target of city management, and their conflict with the municipal officers has become a social phenomenon with Chinese characteristics.
Although street stalls have always been considered “dirty and disorderly”, its flexible nature and easy entrance seems to have a reasonable correlation with the protection of people’s livelihood, in terms of economic recovery. Therefore, a lot of people took Li’s word as the new policy direction and tried to start their street stalls to get a better life. The word “stall economy” itself became a hot topic as well. Quickly, the internet was filled with detailed Q&As, vlogs and guidance on how to purchase and sell products on streets, and even sarcastic speeches and memes.
Nevertheless, that the public is concerned does not mean that the stall economy can work. On the policy level, the central government did not immediately release positive signals that it supports the economic model. On the other side, there were also some opposite voices. On June 7th, Beijing Daily published a commentary named The Stall Economy is not for Beijing, its main idea being that tolerating street vendors is not good for the fine management and image building of a city. Almost at the same time, The Paper, News China, etc., voiced similar opinions. As a result, those who were ready to purchase new products stopped their moves, while those who had already started selling on the street in Beijing were driven away by municipal officers.
It is understandable that city management and street vendors repel each other at the moment. However, it is worth pondering that given the damage to people’s livelihood by the pandemic, is it acceptable to loosen the city management a bit for the sake of economic development, if the stall economy does help boost employment and consumption? To what extent can it help economic recovery? Can one feed himself by becoming a street vendor?
To answer the question, we should look at previous cases. Although many cities, including Shanghai, Xiamen, Changchun and Chengdu, have explicitly encouraged the development of the stall economy, only Chengdu has released relevant data. As a new first-tier city, Chengdu took the lead of loosening management on street vendors, and the results are impressive. In March, policies that permitted street vendors to do business on the streets temporarily were released. Until May 21st, there were more than 0.1 million new jobs created. However, there was no further information regarding the statistical method, and how long the positive impact can sustain is also in question.
Therefore, OCA initiated a field research project in various cities and provinces, including Shanghai, Beijing and Sichuan. The places we visited include suburban flea markets, vegetable stalls in neighborhoods, socks stalls in front of subway entrances, fairs held by shopping malls, etc. Building on our research, we took down some notes and formed our own opinions. Presented below are some selected cases.
【There’s nothing to do at home anyway】
I ran into the street stalls on my way to have a meal in Nanhui District, the suburb area in Shanghai. There are various kinds of businesses, including selling accessories, cheap clothes, perfume samples and homemade food, and also game booths.
I noticed a stall that gained popularity rapidly with its “ring game” (one can get that object if his ring covers the whole object). The loudspeaker kept broadcasting: “¥10 for 8 rings,” which attracted many passersby and their kids. What surprised me was how generous the vendor was. As long as the ring touched the edge of the object, he would take the object to the “little winner,” and it turned out that the vendor just wanted to dispose of his idle items instead of making money through the “ring game” stall. The vendor’s wife added that the stall helped them to kill the time after retirement.
Trinket stalls were the most common ones among any other kinds of stalls. A girl around my age seriously decorated her stall but seemingly didn’t care much about her potential customers. Accompanied by her boyfriend, she told me she just wanted to have fun with her stall since she never had such experience of being a vendor. Once her passion faded, she would go back to her original life.
Therefore, the main reason behind emerging stalls may not be “earning money to cover the loss under COVID-19”, but “to have fun.” Such a phenomenon may be common among those who live in first-tier cities, but for those who have to earn their livings, they seldom have the luxury to “try something they had never experienced.” Nevertheless, compared with vendors who used to keep alert all the time to avoid urban management officers (chengguan) several years ago, people’s lives seem to be better indeed.
[Free growth under slack management]
Anting Fortune Plaza, Shanghai
By the time of my research, the market on Anting Fortune Plaza had been open for one and a half months. It is a medium-sized market with 11 temporary stalls, whose plain style does not quite fit with the plaza around.
There are various business types here as well, including trinkets, pets, second-hand toys, midnight snacks and so on. Regarding the price, almost all the goods are well below market price, except the accessories which are almost as expensive as those sold at the scenic spots. The kinds of visitors are distinct at different times. At noon, its consumers are mostly white-collar workers from the office buildings around, who would walk around during noon break. Past noon, the customers are mainly local residents, children and the elderly. The regulation here is not strict, as there is only one supervisor representing the plaza, who coordinates the site but does not micromanage the stalls. It wouldn’t cost much to do business here, since the fortune plaza would provide vendors with spaces, tables, and chairs. Also, the vendors don’t have to pay a fixed rent, but they do need to pay about 200 yuan for management every day when they show up.
There are no fixed business hours. Pet shops usually close at 7pm, just in time for the tricycles full of grilled dishes that sell late-night snacks to arrive, who would provide tasty food for hungry customers in the next few hours.
The popularity of the market is moderate overall. Among all the stalls, the pet stall is the most dwelled. However, not until I investigated did I find out that despite the high volume of traffic, few people actually made purchases. During the week of my research, the stall owner only sold two rabbits, whose buyers were old people who visited the stall at noon and came to buy with their grandchildren after school. As for other vendors, some set up stalls as a main occupation, while others only do this part-time or even just see this as a social practice opportunity for their children. They typically don’t have a stable business, and their schedule can be flexible. Only the tricycles selling late-night snacks enjoy stable and high popularity.
Given the slack management, the product quality in the market is worth questioning. Except an accessory store that has its shop in the plaza, no other stall has a business license. Despite the clean and orderly environment, the products may have potential quality problems. For example, the tricycles selling late-night snacks can be easily contaminated, considering that they sell in an open area close to the road.
[“I can earn much, but it’s just energy-consuming”]
The stall owner decided to sell accessories during summer vacation when she had nothing to do at home. This coincides with the proposal of the “street stall economy,” making it a good opportunity to have a different life experience. As a result, with a dream of becoming a rich woman, she started her life as a stall owner.
After purchasing goods on Taobao, she started her own small business. According to the stall owner, her key to doing business is to warmly welcome every customer the minute he lays eyes on her stall, smile sweetly and speak nicely, so as to attract more customers and sell things faster. She lived up to her efforts, and got her initial investment back within only a few days.
After three weeks of work, the stall owner decided to end her career. Although the daily profit is considerable, she also found that setting up a stall every day is actually very tiring. Not only is it physically exhausting to move and put the products in place every day, but to attract more customers, it is also very energy-consuming to keep smiling and stay enthusiastic all the time. As the novelty of setting up a stall wears off, it will be the patience of the stall owner that is tested.
This stall owner is also a college student, and his reason for starting a business is similar to that of many stall owners of the same age – to experience life and hone his will power. Therefore, he called a couple of friends to join him and started selling a common dessert in summer: Jelly. The process of making Jelly is simple, and the materials can be prepared in advance. It is also very popular and is a good choice to start from scratch.
The stall owner chose to set up a stall in a small plaza near his home, where there is a large flow of people. After 8 am, the stall owner and his friends will move the tables, chairs and required ingredients, such as coconuts and fresh fruits, to the downstairs and start business. A bowl of their Jelly for ¥5 each has attracted the attention of many residents who come out for a walk after dinner. The Jelly stall can sell an average of 10-20 bowls of Jelly every day, and the highest record was 25 bowls sold at one night. Children and girls are the main consumers. An interesting fact is that the stall owner told us that no man has ever bought Jelly at their stall.
Although they have not deliberately calculated it, the stall owner believes that selling Jelly for five yuan each can definitely make profits. At the same time, he also mentioned that during these 30 days, it was very hard for them to persist in showing up every day. But during the days when they did set up the stall, he and his partners had a very happy time and enjoyed the feeling of making money by themselves. Now that some of their initial materials have been used up, they will continue to purchase the ingredients and operate the stall.
[Selling food never goes wrong]
North Normal University High School, Guiyang, Guizhou
On the street at the entrance of the Beijing Normal University subsidiary High School, one can see the food stalls within a few steps, which sell fried potato, fried chicken, grilled sausage, ice cream, grilled cold noodles, and all kinds of snacks. The stall owners include elderly men and women, as well as upright young men. They make a living by setting up stalls every day, regardless of the weather or time.Because this street is at the entrance of the school, usually no other people would pass by, and the students nearby have become the main customers.
When school was about to be over, a big pot was set up on the tricycle, fresh vegetables and sausages were thrown into the hot oil, a thick smoke came out with a “swish”, and the aroma of fried food burst out instantly. The sound of clashing and the sizzling of ingredients are intertwined. The students swarmed out from school, and they couldn’t help but buy some snacks while walking home.
According to a stall owner who has been selling skewers on that street for decades, their vegetables are grown by themselves and processed in some workshops, and the meat is bought at the wholesale market. Business is better on sundays and on weekdays when school is over. During other times, they would go to places with more popularity to set up stalls.
There have always been many stalls in Guiyang, and the city management team would come by occasionally to manage this road, but the number of stalls has never decreased.
Pinggu big peach stall, Gate of Wangjing Science and Technology Park, Beijing
Wangjing Science and Technology Park, a busy and fast-paced place where small and medium enterprises gather, seems to have nothing to do with the stall economy. But just in this area, just under a tree at the door, where there is even no single piece of cloth, a small stall was born. There is only one, simple kind of good: peaches.
One of the stall owners is an office worker in Wangjing Science and Technology Park. He told me that he gets up at 5:30 am to pick the peaches in his garden, puts it in a bag and pulls it here with a car to sell. According to my observations, there are people watching the stalls here every day. Whether it is going to work in the morning, taking takeaway at noon, leaving work at night, or even during working hours, you can see someone selling them. So I guess there is more than one person selling peaches. They sell the peaches in turns.
The science parks are full of young people aged 20-30, and a science park can accommodate hundreds of companies, so the flow of people is huge. They have new guests every day, even including the security room at the door. Because the stall is in a remote area and the whole street is full of companies, there is no urban management monitoring the place. The stall has existed for almost a month and is still intact.
The stall economy in first-tier cities might actually promote the economy. Beijing does not only have central business areas and white-collar workers, but also many residents who live in the suburbs and are still farming at home. The stall economy can help lessen their storage of fruits and vegetables, especially in the summer when fruits are abundant. I mean, who doesn’t want a juicy Pinggu peach on such days?
[‘Fighting’ against the city management]
Vegetable stall, Gate of Tiantongyuan Community, Beijing
This stall is special since it is not set up on the ground, but rather in the trunk of a car. There happened to be a car for city management and law enforcement parked on the side of the road the day I went. Initially, I didn’t notice it as I walked to this vegetable cart.
First, I asked about the types and prices of the vegetables. One of the women replied loudly: “Our goods are not for sale. People in the community ordered them from us before and they have already been installed. We are just waiting for them to come and take them away,” and then when I asked how I could order for myself, the woman claimed again, “These are all ordered by others, and we do not sell them.” I was a little confused by her self-contradicting words. Just when I thought I was in the wrong place, the woman looked around and pulled me closer, lowered her voice and said, “I’m saying those to the city administrator next to me. Did you see that car over there? It has been watching us and won’t let us sell vegetables. What kind of vegetable do you want? No matter what you want, I can weigh it for you.” Not until then did I realize that there were city management vehicles next to us.
The women claimed to be from Pinggu (a suburb of Beijing, famous for peaches). The vegetables and fruits they sell are all grown in their own backyards, and are brought to the city by carts every Monday, Wednesday, and Friday. When she opened the car door, I saw more bags of vegetables on the back seat and the floor of the car. In the end, I bought a bag of 3 catties of peaches for 20 yuan, which was slightly higher than the market price.
According to my daily observations, many residents go to this small stall to buy vegetables, and the city management will occasionally stop the sellers from doing business. In other places in Beijing, it is difficult to see real stalls. Once I saw a person riding a tricycle selling grilled cold noodles at a subway station. It did attract a lot of people to buy that day, but he disappeared the next day and never showed up again. From this, we can see that Beijing is still strictly controlling the stall economy.
One important point should be illustrated, which is that our role as a student makes the subjects of our investigation highly selective. Most of us live in big cities with higher living standards, making it hard for us to visit the ‘perfect cases’ in which people are hit hard or lose their jobs because of the pandemic and turn to the stall economy for a better life. Hence, our investigation focuses more on the possibility of living on a stall business: How complicated is the preparation? Is the bar high? How much should one invest when running a stall, and what’s the return? What problems would one meet in the process?
Regarding the previous preparation, starting a stall is indeed quite easy, which is also the main reason why it’s considered to be a great opportunity for improving the livelihood of people. As long as one decides on his business type, the whole process from purchasing to setting up a stall is simple.
Maintaining the business is the hard part. Before the investigation, we thought that the biggest obstacle would be city management. However, later, we find out that the management is quite slack in many places, and even if there is strict monitoring, it can never stop those who actually live on the stall business. As we can see in the case of the vegetable stall in Beijing, the vendor even managed to sell products under the eyes of the inspectors.
Furthermore, the hardship of running a stall would not be a big hindrance either. Whether it’s selling food or small items, the profit is made by charging low and selling more. Therefore, to increase the volume of sales, it is inevitable to work for long hours. Had one made up his mind to live on the vendor business, these all become a natural part of a job.
Thus, in our opinion, the biggest difficulty of being a street vendor is to cater to the need of the urban population, which can be boiled down to the lack of professionality.
It can be seen from the various cases that food is the kind of product that can attract a stable number of customers, which includes homemade snacks, fresh fruits and so on. After all, eating is a rigid demand of human beings. For other kinds of business, on the other hand, whether it’s the ring game, pets or other small commodities, the demand each day is highly subject to the surroundings of the stall and other factors, which cannot be guaranteed.
For example, as a customer, when you are attracted into an outlet by its car boot sale but only to find that the products are either 3-yuan, second-hand children’s books, or small accessories purchased from online stores whose quality cannot be guaranteed, hardly anyone would come to a street vendor on purpose to find a children’s book, or persuade himself to buy some accessories here at the street vendor instead of taking extra 3 minutes to go into the shopping mall and buy them in a fine store. The price might be higher, but the buyer can feel more at ease.
Of course, the problems are solvable for sellers. If one can analyze the situation and think thoroughly, he would find that his accessory business cannot compete with the commercial stores around. Next, he can choose to develop his own advantages, such as an extremely low price level. If the local residents are not sensitive to price changes, then he might have to think harder on his unique selling points, or simply change his business type.
As you can see, except for food, the natural advantages of the common types of street vendors– easy entrance, low cost and therefore low price– are not overwhelmingly competitive in regions that have a full range of goods and services. Especially in cities like Shanghai, where the overall consumption level is relatively high, customers would not be more convinced to take out their wallets simply for a low price. Moreover, in aspects such as quality control, shopping experience and strategies in management, stores gain the upper hand of street vendors in every sense. Retailing itself can be unfolded into a knowledge system. The positioning, selecting location, purchasing, marketing and even cultivating user adhesiveness of a store can almost make up a 4-credit course in college, but a street vendor beginning from zero has little opportunity to get prepared.
Hence, on a personal level, at least in the regions we investigated, it is hard to make living solely by running a stall, but it can certainly help one earn some extra money. What if all this small but substantial growth add up together? Can the stall economy, as a large-scale model, help accelerate the recovery of the economy?
My answer is yes, but the results cannot be observed instantly. On one hand, it takes time for the market to select the fittest. Not every stall can make profits, and not every profit-making stall succeeds at the very beginning. Tested by the market, stall owners can better understand people’s demand and find their own approach to make money. Certainly, there will also be vendors that cannot make it, and thus the public resources can be yielded to the better ones. With the stalls becoming finer and more professional, the strength of the stall economy will absolutely become more observable.
On the other hand, it is necessary for cities to loosen their management. After all, the monitoring does have a negative impact on the stall economy. Good news is, recent policies have been promoting a very similar concept: the “store economy”. In July, 7 government sectors, including the Department of Commerce, released a notice on developing the store economy. The document reads that the goal is to cultivate 100 pilot cities for experimenting the store economy in 2025, as well as 1000 store clusters that have ‘a sense of bustling’. Compared with the “stall economy”, this concept has another layer of orderliness, but in a slack policy environment, it also possesses the qualities of easy entrance and low costs. Perhaps, this economic type really is a way out.
All in all, let’s wait and see the future of the stall economy.
To be honest, both the field research by OCA and this article cannot provide an objective, comprehensive, and profound insight given the depth and width of the research. After all, for us who live in big cities, we can explore the process of setting up stalls, but the real beneficiaries of the stall economy can hardly be seen by us. According to Beijing News, the 600 million people who have only 1000 kuai as monthly income are mainly living in rural China. Also, given the big difference between eastern and western China, most of those people come from midwest China.
As compared, most students from NYU Shanghai live in first-tier and second-tier cities, whose families enjoy a decent life and are less likely to be vastly influenced by the pandemic. Frankly, in this research, we have only discovered what we expected to see. How can we find out about those whose livelihood is being destroyed by COVID-19 and those whose livelihoods depend on the stall economy?
Thus, the meaning of this field research is more like food for thought. It serves to help us think about our contribution to society by making us step out of the campus and start observing the world. It keeps us pondering: If the stall economy doesn’t work, then how can the employment rate be increased? Can the courses we’ve learned on economics, engineering, and even philosophy and egalitarianism, actually be applied to real-world problems? When a black swan like the pandemic arrives, can our knowledge and skills be converted to strength?
This article was written by Tao Wen, Cecilia Sun and Anakin Wang, currently based in Beijing and Shanghai. You can reach out to the authors at email@example.com.
Photo Credit: Pinterst