Street trading in Hong Kong

Author

Tse, F. Y.

TitleStreet trading in Hong Kong
PublisherSocial Research Center, the Chinese University of Hong Kong
Publication DateMarch 1974
Pages:230
Keywords:Peddlers and peddling ;

Retail trade

Abstract/ Concluding Remarks:Market and street trading is a feature of low level retail development. Its relative importance in overall retail distribution diminishes as the economy advances. In a spatial context, the process of retail development can be viewed as parallel with the rural-urban continuum characterized by market and street trading prevailing at the rural end in contract with a formal retail system dominating at the urban end. It is at the intermediate stage of economic development that the rural urban contrast becomes most striking; the “old” and “modern” retail systems intersecting each other in urban centres. The present study is an example of the study of this low ordered form of retailing in a relatively metropolitan setting.

The development of street trading itself can be also viewed as a continuum front itinerant trading to fixed and permanent trading. The continuum can be extended to the shop-type retail continuum via the intermediate stage of mini-stores (wall-stalls in the Hong Kong case).

In a brief review of the research literature concerning market and street trading, most of the studies have been found dealing largely with the “old” and “rural” end of the continuum, mainly on social and economic anthropological approaches. As at the “modern” and “urban” end, economists are rarely interested in street and market traders. In third world countries, this type of retailing should receive more research attention in the light of (1) its relative importance in internal trade and (2) the physical problems related to urban development. However, the lack of reliable official data prevents serious attempts to investigate the problem in great detail.In Hong Kong, retail statistics do not exist, needless to say hawking statistics. The present research relies heavily on factual materials collection is scarce apart from a couple of Government reports and recent work by T. G. McGee from the University of Hong Kong.

Street traders in Hong Kong are officially called “Hawkers” or “Shiu Fann” in Cantonese. The original terminology and definition of “Hawker” in western context is no longer relevant in most Southeast Asian cities. They name people who conduct business in public place (Squares, street, open ground, canals, etc.) as “Hawker”. However, as was shown by the study of Hawker Images in Introduction, the traditional Chinese concept of itinerant trading (the true sense of the world “Hawker”) was found embedded deeply in the modern image which hardly represents the norm of to-day’s street traders. This may be due to an ambiguity in people’s ideas arising from the mini-store-like fixed and well structured stalls which are so common in the hawking scene, and their general acceptance of street stalls as an integral part of the overall retail system.

The exact number of street traders in Hong Kong has always been a puzzle. Almost all published figures have been found over-stating, one way or another, the size of the population. This is mainly due to the fact that the number of unlicensed hawkers has never been known. Elaborate methods have been employed in the present research to obtain a more realistic. It has been worked out that, in 1971, there would be some 44,000 trading units (stalls, pitches, barrows, pedlars, etc.) and around 53,000 people engaged in the activity. On average, there would be 1.2 person per trading unit (night- time trading included). One-quarter of the traders were estimated as unlicensed. The largest single trade was vegetables which accounted for well over one-quarter of the total. fThis was followed by Fruits(13.5%),Garments and Clothing(10.5%) and Grocery(9.3%). These top four accounted for some 60% of the total trading units of 25street trades. That means that street trading is fairly concentrated in a limited range of trades. Another measure of concentration is the Index of Diversification of street markets. On average, the index reaches 0.7to 0.8 (1.0 for absolute concentration and 0.0 for absolute diversification).

The physical and economic characteristics of street trading have been studied in Chapter 5 and 6. The myth that street trading is a “refuge” occupation for the poor and aged has been found groundless. Over half the operative have been found at the age between 30 and 50; the mean is about 41. This is just the age structure of the commercial population. Male and female operatives are almost equal in number. If this is compared with the sex structure of the commercial population, street trading can be said to be fairly female oriented. Operations are small scale. Family involvement tends to be higher in labour intensive trades, notably wet good. Stall markets open seven days a week; there are hardly any periodic markets. The legal status of hawking does not ensure the security of the licence holders. The unlicensed can ply their trades as do the licensed. They hardly stick to the official regulations. Almost all stalls and pitches have extended to a size some 1.68times the stipulated standard of 12 sq. ft. Mobile traders are becoming less mobile. The high density of demand in a compact urban environment tends to make peddling less necessary. Pedlars can satisfy themselves by peddling in limited set itineraries.As a whole, the activity is very stabilized and permanent. It is very similar to firm-type trading except for the trading premises. The pursuit of scale economies is definitely a force for escalation within the street trading continuum itself, but there is no strong evidence to support the idea that there is an outflow movement of street traders into major deterrent to this development.

Street trading is a low cost industry. Before the new Policy (1972) was introduced, the average total cast (labour not included) was in the range of 1% to 3% of revenue. That is mainly for transport, storage and to a certain extent, for bribery. Mark-up was about 18% of revenue. The net earning was some HKD 600.00 per month which was equivalent to the wage level of ordinary industrial workers. The major attraction of street trading is the flexibility of extending one’s income by labour substitution which is fairly limited in other forms of employment. But it requires hard work. The earnings are reasonable.

The importance of street trading as a contribution to retail trade has been examined in three perspectives, i.e. (1) its relation with formal shops and public retail markets, (2) its popularity among the consuming public and (3)its proportion in the household expenditure bill. Hong Kong has very poor formal shopping facilities. The provision of shopping space is about half the U.K. standard. The situation in the food sector is even poorer. Public market halls have not been built for years. The growth of super-markets has been only a recent phenomenon. Actually, quite a number of these so-called “super-markets” are merely “enlarged” grocery shop with a new title. Street stalls thus fill the supply gap. It has been shown in the example of the raw meat trade that even if street are included in the calculation, Hong Kong is still far behind the U.K. standard. Street shopping is widely accepted in Hong Kong society. Both rich and poor use the services of street traders. Convenience, or accessibility, is highly praised as the major attraction. This can be supported by the fact that one tenth of a household’s expenditure (including housing, transport, electricity and other payments) is spent on purchases form street traders. For food trades, street purchases account for 20% of the food bill. As for fresh fruits and vegetables, 50% of the expenditure on these two items is made on purchases from street traders. In conclusion, the importance of street trading lies in the fact that it is not simply an extension of the shop-type system but rather an integral part of the total retail system. In the food sector, street traders dominate almost the entire sub-system. There is little overlapping between the two; the relationship is complementary.The importance of street trading is even more outstanding in a spatial context. This aspect has been examined in three steps, i.e. (1) patterns and factors of street trading distribution, (2) the role of street trading in the movement of commodities and (3) the costs and prices in response to the commodity distribution patterns.A significant finding of the distribution pattern of street markets has been that street markets are in clusters randomly distributed all over the city and within each cluster, individual street markets are by number in a logarithmic scale . that is a Negative Binomial Distribution pattern. The network of street markets overlaps that of public retail markets and extends its coverage further to the peripheries where shop-type facilities are particularly poor. The high density housing and subcommercial environment have been found most attractive to street trading concentrations. On a micro-scale, the locational interdependence of public markets, food shops and street markets becomes the determining factor. This confirms the importance of agglomeration and complementary economies in the location of street trading activities. Complementarity exists between street trading and (1) public markets, (2) retail shops, and (3) among the street trades themselves. The natural outcome of these economies is a concentric zonal arrangement of street stalls with wet goods in the centre by the side of public markets and food shops, dry goods in the intermediate zone, and finally speciality goods, cooked food stalls and service traders in the outer zone. The further away from the centre the less is the importance of agglomeration economies. Complementarity is switched over to that with shops rather than that with public markets or between street stalls.

The regional variation in the distribution of street trading activities tends to be dominated by two major factors (achieved by a Principal Component Analysis), i.e. (1) degree of commercialization of a district and (2) dormitory-like housing environment. This marks the sharp contrast between the city and the outlying districts. City districts are high in commercialization but low in high density housing (resettlement type); the reverse is the case with the outlying districts.

Street traders play a significant role in minimizing the regional contrast in the provision of reftail facilities. The city districts enjoy easy accessibility to the supply points. Long distance travel is required for the outlying-district traders to move goods across the city because the wholesaling facilities are concentrated on the western sea-front. One major side effect of this intra-city west-east movement of goods is the increasing traffic congestion in both the delivery points and on-route to the east.

With the service of the street traders, the consuming public, no matter in which part of the city, are able to enjoy great shopping convenience. In the outlying districts, street markets become the major shopping centres for daily necessities. Over 70% of the local residents regard these markets as the only sources of supply. As for the city districts, the inclusion of street markets often up-grades the hierarchical position of a local shopping centre. Street markets perform a complementary function to the formal retail system. This widens the catchment area of the entire shopping complex. That is why street markets in city districts tend to be less comprehensive compared with those in outlying districts. Thus complementarity has also its spatial significance.

People in the outlying districts have to bear a higher street trading price than do those in city district. In the former, the overall street trading price is just a few percent below the shop price, but street prices are even higher than the shops in wet goods. In the city districts, street prices are about 10% cheaper than shop prices. The price differential between shops and street stalls widens in areas of great demand as well as in areas of great demand as well as in areas with poor shopping facilities. This is mainly due to a rise in street prices rather than a fall in the shop prices. Generally, food prices are dominated by the demand function of street trading rather than that of the shops. Thus the distribution of street trading and the supply of shop-type facilities are most responsible for the variation of the food prices all over the metropolis.

If the credit of street trading is based on the services of accessibility and cheapness rendered by street traders, the high price level in the outlying districts should not be the fault of street readers themselves but rather the result of planning negligence in failing to provide sufficient shopping facilities and the mal-location of wholesaling facilities.

During the preparation of this report, the Hong Kong government has revised the old hawking policy. The new policy has indicated a swift change of philosophy on, and attitude to hawking. Street treading is no longer treated by the authorities as a social welfare adjunct. Street treading is believed to be a profitable commercial undertaking. It is contended that the needs of street traders should be balanced against the needs of other sectors of the economy. Thus the use of space by hawkers has to be paid for. The costs incurred should not be passed on to the tax payers. As a result, a new rental system was imposed. It has been argued in Chapter X tat the official rent is actually higher than the “commercial” rent. The charge of license fees is actually higher pitches was designed to protect the legitimate traders against the illegal ones who might capture the business by moving close to the shoppers’ path. Thus, pitches are to be arranged in designated hawking sites and streets to keep off the unlicensed. Stringent laws have been imposed to keep street treading in order.

Is has been argued that the main problem of the new Policy lies in the fairness of the rental system. The new rental system is seen to be (1) unfair to the majority and (2) unable to penalize the genuine space ambitious operators (the most profitable). A differential rental system has been suggested by the writer as a compromise (the basis of charging rents is subject to debate) for the sake of minimizing the physical problem. The proposed differential rent should include the consideration of (1) the space being occupied by individual traders, (2) the rent-paying ability of a trade, and (3) the locational rent of a pitch. This would penalize those more able to pay without victimizing the majority or raising the general food-price level. After all, street traders are rendering good services to the public. In addition, the marginal cases (the outlying resettlement districts) should be exempted from being charged high rentals on the grounds that (1) the deprived districts should be subsidized and (2) that the hawking problems in these districts can be attacked by alternative means.

The writer has also emphasized the need of quick action to improve the formal retail system, in particular the public markets and the genuine super-markets. The hawking problem cannot be solved simply by suppressing the hawkers so as to force them to move on to the shop-type system. Basically, in a city as crowded as Hong Kong, shop space is scarce and expensive (intrinsic to the problem of the limited physical space of the city), some types of trade would not yield, at the present scale of operation, a commercial return on shops. The development of large-scale super-markets should be encouraged and hopefully it speeds up the transition process from street trading to modernized retailing. This will bring along a modernization of the wholesale sector which is, at the present, still fairly labour-intensive. In the foreseeable future, unless public retail facilities are provided, most low-order street trades would remain in the street.
NoteIncludes bibliographical references; pt.3,c.9, pt.1,c.10, pt.2,c.9
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