China's Street Vendor Economy After COVID-19 Pandemic

Across Asia, street vendors are getting back to business as usual after forced lockdowns prevented many from opening up shop severely damaging local economies.

Date:2020-02-06 by GLOSKU

Across Asia, street vendors are getting back to business as usual after forced lockdowns prevented many from opening up shop severely damaging local economies.

Some of the most resilient businesses in Asia are street vendors. Their low cost set up means low stock investment, virtually no rental costs, and no employee salaries to commit to which were some of the key factors that forced thousands of businesses globally to liquidate or declare bankruptcy directly due to government restrictions put in place to prevent the spread of coronavirus.

Although lockdown was not easy for many street vendors who generally live day by day on what they earn from their street stalls, many have weathered the storm and are starting to reemerge in force.

The easing of restrictions has meant street vendors are back in business and their presence has already begun to have a positive effect on the Chinese economy. For one, stocks prices for firms that sell vendor equipment are seeing a sudden surge in value.

On top of this, the Chinese government announced that its officials would no longer penalize street stalls for operating outside of the realms of the law. This has led to this once ignored micro-economy attracting the attention of major Chinese tech companies who are now offering cheap loans for those that want to start their own street stall business.

Surprisingly this new post-lockdown phenomenon comes with particular praise from Li Keqiang, the current Chinese premier, who admitted street vendors are the “lifeblood” of the country, and it must be said - he’s right.

Street vendors are a vital part of the economy for many Asian countries, not only China. This could not be truer of Asia’s subcontinent South East Asia where government welfare, health cover, and pensions are practically nonexistent.

This line of work gives low-skilled citizens with zero capital to invest in real estate, the chance to run their own small business be it a makeshift food stall, mat on the floor, or clothes rail on a street corner. With very few laws in Asia to restrict citizens from conducting business in this manner, street vendors have flourished.

You only have to walk through the streets of major Asian cities like Beijing, Bangkok, or Singapore to see just how important street vendors are to the economy. Despite the low prices, millions of dollars in cash change hands every day from customer to vendor, and vendor to the supplier as the money flows back down the supply chain to secondary and primary sector businesses.

Businesses in this vertical supply chain have suffered detrimentally due to lock down as their street vendor clientele disappeared overnight – a major source of income cut off. How with the reemergence of these vendors, cash can start flowing up and down the supply chain channel once again putting food on the table and tax dollars into government coffers.

Therefore, for all of those out there that see street vendors as non-taxpaying citizens that are a pain in the backside should think again. Their presence is vital – something that has not gone unnoticed by the Chinese government as of late.

It isn’t only street vendors that have been driving the economy in China. Online sales have also been booming in light of the recent lockdown and limitations to freedom of movement in the country. The rise in online sales has helped to create a new wave of "virtual e-street vendors" that can sell products online. 

One particular niche within the online retail market has given European and US based retail firms and distributors a way into the Chinese retail market via cross-border eComm sales. 

A company called GLOSKU is currently pioneering the way encouraging a new group of Chinese ‘virtual e-street vendors’ also referred to as ‘daigou’. This group of virtual e-street vendors once used messaging tools to connect with European and US brands to ship goods into China. However, the industry was marred with unregulated transactions and inefficient supply chain channels.

Luckily, GLOSKU saw the potential of the ‘daigou’ market and decided to create a platform that irons out these irregularities as well as supply chain issues in order to streamline how daigou do business. GLOSKU takes care of transporting the products from the US or Europe as well as all the compliance and regulations required to ship goods to be sold in the Chinese retail market.

Today, GLOSKU is one of the leading platforms helping brands expand to Asia while the system also gives anybody in Asia the ability to become a virtual e-street vendor connecting Chinese virtual e-street vendors and US/European brands. In short, this means brands from the USA and EU are able to easily enter the Chinese retail market and have a network of affiliates promoting the product online and offline!

The connection between street vendors and ‘virtual e-street vendors’, from a business point of view, makes perfect sense. Street vendors both online and offline are entrepreneurs. They are motivated, which is clearly evident because both offline and online street vendors are keeping the Chinese retail economy alive!

There is also now the possibility of physical street vendors also using platforms like GLOSKU where they can connect with European and US brands to bring their products from an online cross-border eComm platform into an offline business where the goods can be sold through an army of affiliates.