Shanghai Street View: Cleaning Up the Bund 沪经动向：清理外滩

Most Shanghai residents like myself have a love-hate relationship with the hoards of illegal hawkers that clog the city’s streets and sidewalks. On the one hand such street vendors can be a godsend on a hot summer day when they offer cold drinks, or on a brisk fall evening when they serve up bags of roasted chestnuts fresh from the wok. But much more often they’re simply pests, creating clutter, noise and bottlenecks on many of the city’s busiest sidewalks that are already far too narrow.

The conundrum is even bigger for the city government, which probably sees such hawkers as more akin to gnats. You can swat and shoo them away with the occasional policeman and threat of closure and confiscation of their equipment; but no sooner is the policeman gone than the hawkers quickly re-emerge from the shadows to resume their noisy and disruptive trade.

Against that backdrop, I was intrigued to read a report this week on how Shanghai is working with local business to tackle the hawker issue on the Bund, the city’s most famous tourist attraction, through an innovative approach that takes aim at the problem’s economic roots. Put simply, the city is trying to beat the hawkers at their own game by convincing licensed businesses to sell comparable products at lower, money-losing prices.

The city has launched its innovative program by targeting bottled drinks and photos — 2 of the most popular products sold by illegal hawkers at popular tourist destinations like the Bund, and indeed at any of the thousands of popular tourist attractions throughout China. Specifically, the city has convinced its drink vendor partner to offer bottled water at its several Bund stands for the rock-bottom price of 1 yuan per bottle, or about 16 US cents. Likewise, the city government has convinced its official Bund-based photo partner to offer souvenir pictures for a starting price of just 7 yuan, or just over $1.

I’m not a particular bargain hunter, but after years of living and working in China I can definitively state that bottled water never sells for less than 1.20 yuan per bottle in even the cheapest convenience stores, meaning the Bund water was 20 percent cheaper than any product available in stores. The report I read said the 7 yuan starting price for photos was also a money-loser for that vendor.

Despite protests from both official vendors, the government managed to convince each to participate by arguing they could make up their losses by charging premium prices for their other products like traditional bottled soft drinks and panoramic photos of tourists standing in front of the entire Lujiazui skyline, including the infamously gaudy Oriental Pearl Tower.

Such business strategy is actually quite common in the West, with companies often selling one or two of their most popular products at a loss in a bid to attract customers to buy other products being sold at higher, profitable prices, a practice known as loss-leading. The city further convinced the vendors that they would get abundant publicity from free advertising for participating in the program.

It all sounded quite good in theory, so I went down to the Bund to check and see if the idea was also working in reality. After looking past the little boy happily emptying his bladder in front of the first drink stand I approached, I was pleasantly surprised to see that the vendor was indeed doing brisk business by offering the 1 yuan water alongside its more normally priced other drinks. The same was true for the photo stands, which were both surrounded by small crowds of out-of-town tourists eager to have their picture taken in front of the the skyline of Shanghai’s fast emerging Pudong financial district.

But perhaps most exciting of all was the complete lack of congestion on the Bund’s riverside pedestrian walk, where not a single illegal hawker was in sight. Such ease of movement and lack of hawker eyesores is a rarity at any major tourist attraction in China these days, making me almost feel as if I were in another city outside the country, perhaps in Singapore or Hong Kong.

But this was indeed China. Upon some further thought, I concluded that at least some kind of police presence, most likely hidden and out of sight, was probably partly responsible this kind of rare comfortable environment on the Bund. Still, I have to commend the city for its creative economic approach, which reflects Shanghai’s commercial focus and ability to work effectively with businesses and other community stakeholders to tackle many of the city’s growing pains as it tries to recapture its place as one of Asia’s financial and cultural hubs.