Charting a digital trajectory for street vendors in India

“Street vendors feed our cities”, say experts from WIEGO (Women in Informal Employment, Globalizing and Organizing), an international network organisation. How true? Street food is not just for tourists, but essential to food security for millions of urban poor across the developing world. In India, it is estimated that nearly 50% of vendors sell cooked food affordable to many, and over 30% of them vend fresh fruits and vegetables catering to over 1/3rd of the demand of urban India.

Years of advocacy catalysed the landmark legislation ‘The Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act, 2014’. The law protects the right to livelihood through street vending, sought to establish mechanisms for improved spatial equity for vendors, participatory decision making and regulatory arrangements at city level. Hailed as a progressive legislation, the Act paved the way forward on many challenges faced by street vendors.

Street vending is often the first resort for an unskilled migrant, with an aspiration to progress. Moving up the ladder of street vending is perceived in terms of – security of income and place of business; improved margins; better location of doing business; lower vulnerability of business loss; credit worthiness and so on. Easier access to customers, better supply chain linkages, improved tools of trade, access to better infrastructure at location of business, improved storage for perishables are just some in the list of unmet needs of this informal economic segment.

Aatmanirbhar Bharat’s PM SVANidhi program for street vendors, provides working capital credit while promoting digital payments. Digital footprints will pave way for regular credit flow from formal banking system. This over a time period shall enable them to claw back from stronghold of moneylenders charging inordinate interest rates. There is component of interest subsidy and more importantly incentive/cash back for using digital transactions. Street vendor servicing their loans successfully shall receive more money than interest paid by them.

Now, with wide usage of digital transactions and availability of access to credit for street vendors, there has been demand from unregistered vendors to register themselves with local bodies, which is a dedicated and encouraging drive by urban local bodies to mainstream the informal vendors and helping to build database of the urban poor. In future, this data can be used for convergence of PM SVANidhi scheme with other government programmes with common target beneficiaries.

The concerns of street vendors have so far been seen from a limited lens. The primary objective of policy makers have been to provide for secure location for vending and improve their working conditions. While these approaches are valid, it is time to for developing deeper understanding of the micro-enterprise itself, it’s competitive characteristics and fundamental disadvantages. Customer segment and pricing, inventory management, buyer behaviour and preferences, service reliability, product quality and consistency, food safety and packaging – are just some of the issues that need to be addressed to help street vendors emerge as viable growth-oriented enterprises.

Digital platform solutions hold significant promise to unlock many of these constraints and aggregate them in many ways to provide scale. Hyperlocal sales and marketing are now within reach. In the era of ‘door delivery’, we need to ask ourselves whether a fixed and secure location of doing business should be the only major priority for the street vending community. Initial examples of breaking this mould are observed in food delivery aggregators who have tied up with locally popular food vendors, thus expanding the reach of the hawkers.

During the pandemic, there has been large scale demand and adaptation by citizens to use contact less QR code digital transactions. Hawkers have been quick to respond to such changes and availability of QR code are driving digital money in the traditionally informal sector. Overall, with more focus on registration of vendors, using digital transactions, first time access to formal banking channel, change in citizen behaviour towards digital money, the future of the business by hawkers is undergoing sea change.

Going forward, for innovators and entrepreneurs, this is a new business model which needs to be established, myths to be broken and promises to be achieved. Afterall the opportunity with 10 million street vendors in India can by no means be a small-scale business.

(Shrinivas Kowligi, Partner – Smart Cities and Urban Transformation, Government and Public Sector & Pragyal Singh, Partner – Government and Public Sector Consulting, EY India)

Charting a digital trajectory for street vendors in India Charting a digital trajectory for street vendors in India Reviewed by TechCO on 1/16/2021 Rating: 5

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