Chinese Premier Li Keqiang announced last week that the government would provide more support for street vendors and small businesses – and this has prompted major brands to rush out a range of initiatives to help them.
In addition, the Chinese government’s newfound embrace of street vendors, who previously were discouraged on the grounds of hygiene and other reasons, has sparked a surge of investment in companies that produce goods of use to street hawkers, such as minivans and kitchenware.
For example, shares in Wuling Motors, the Hong Kong-listed vehicle manufacturer, soared by 217% last week after the company revealed it had sold hundreds of units of a new minivan in just one day.
The share price of Shanghai-listed Yindu Kitchen Equipment, which makes everything from commercial fridges to griddles and fryers, also rose sharply last week, the South China Morning Post reported.
Similarly, the share price of Yotrio Group, a Shenzhen-listed maker of outdoor furniture, including giant umbrellas that could be used for street markets, also jumped by 28%.
The surge of activity followed Mr Li Keqiang’s well-publicised visit to the city of Yantai in Shandong province last Monday, where he declared that the country can only develop well if its people are living well and described street stalls and small businesses as an important source of jobs and the “fire” of China’s economy.
As the South China Morning Post noted, small and medium-sized enterprises (SMEs) account for more than 90% of enterprises in China, contributing about half of all tax revenue and employing about 80% of urban workers.
However, they were also among those who suffered the most from the restrictions imposed to combat the coronavirus pandemic.
Li Keqiang’s endorsement of these small businesses galvanised some of the country’s biggest brands to pledge extra support on top of measures they have introduced already to help consumers and retailers through these difficult times.
Alipay, the payments arm of e-commerce giant Alibaba, for example, highlighted its decision to offer interest-free loans to small businesses over the past few months.
“Premier, we promise that we will carry out our 2020 plan to help small businesses, raising their income from digital operations by 20% and the availability of online loans by 20%,” the company said on WeChat.
As for Tencent-owned WeChat, it announced that it would launch a new “fire” plan to support the digital transformation of SMEs, offering them subsidies, business guidance and marketing support.
JD.com, another of China’s major e-commerce platforms, also launched “Spark”, an economic support plan for SMEs, stall owners and shopkeepers, while electronics retailer Suning said it would support street vendors in night markets by offering them free storage in its 10,000 freezers across the country.
The company added that it will allow street vendors free access to its live-streaming platform to sell their goods and provide low-interest loans of up to two billion yuan in total.
Sourced from South China Morning Post; additional content by WARC staff