Going upmarket

PUBLISHED : Thursday, 02 February, 2012, 12:00am
UPDATED : Thursday, 02 February, 2012, 12:00am


Think tanks have been sweating out ideas to fight poverty. But, so far, they have come up dry. It never occurred to them to look to wet markets as a solution to poverty or even wealth creation. These public places have a hidden potential for entrepreneurial success.

Wet markets, being messy places, seldom get the attention they deserve. High-brow policymakers rarely stretch their imagination to grubby downmarket establishments. The public's attention, however, has been piqued by the recent protests mounted by a group of pork retailers in the markets. They were railing against actions by the supermarket duopoly to undercut the price of pork, a move that, according to the protesters, is calculated to drive them out of business.

To address the problem, we need to go to its roots. Why are wet markets in general no match for supermarkets? Stall owners point to the economy of scale and the overwhelming bargaining power of supermarkets to squeeze big discounts from suppliers.

But it's not just the price that matters in this seemingly uneven fight. After all, wet-market stall owners enjoy a substantial advantage in low rentals. The average monthly rental of stalls in the 100 or so markets owned and operated by the Food and Environmental Hygiene Department is around HK$2,700, with some as low as a few hundred dollars. Their vegetable retail price is admittedly much lower than at the supermarkets. So, why are many stalls vacant in these public markets? Some markets are half empty.

It stands to reason that price alone does not determine competitiveness. In this, my instinctive judgment is supported by the experience of a market owned and operated by The Link Reit. A couple of years ago, the company spent some HK$95million to revitalise the Tai Yuen market in Tai Po district. The chief architect is none other than Ken Greig of Britain, who is credited with bringing London's historic Borough Market back to life. The Tai Yuen project won an award last year at a forum on corporate social responsibility organised by the Asian Institute of Management.

Post renovation, traffic flow in the market increased substantially. Some stall owners told the media that sales have doubled. Their client base is now more diversified, whereas previously most of their patrons were housewives. The Tai Yuen market has been transformed from a wet, dirty and messy place into a neat, air-conditioned establishment, with clear signage and an unmistakable environmental message. To lure the middle class, it introduced an environmentally friendly theme, with the rooftop set aside for organic farming, using fertilisers from the kitchen remains of the stalls. The market even offers cooking lessons and demonstrations to entice customers.

What the Tai Yuen experience shows is that, with design innovations and modern management, markets can be made to compete with supermarkets on an equal footing.

Most of the markets were built in the 1970s and 1980s, lacking in basic modern facilities such as air conditioning and escalators. Worse still, they are foul-smelling and unsightly. If I may be uncharitable, they are generally poorly managed. I have heard of complaints from stall owners that the floor of the renovated public market in Ngau Chi Wan - covered in shiny, slippery tiles - is hazardous. Government officials are simply out of touch with the needs of the public.

The obvious solution is to separate ownership from management of these markets. I propose that the government remain the owner, but it should cede management powers to innovative leaders. In authorising rentals, they could factor in the price and quality of service of the retailers. The chairperson of the management team, who would have the authority to make drastic design changes, would have his or her performance measured by the increase in traffic flow, vacancy rates and other objective indicators.

This government has paid lip service to the nurturing of innovative industries. But, to date, industry innovation is still a largely abstract concept. What better place to start than with government-controlled facilities, by bringing in innovative community or business leaders to work their magic?

Let creative people take over the running of these markets. With imagination, they could be turned into theme parks with local colour, providing thousands of low-income, low-skill people with a livelihood and attract tourists to sample the local lifestyle. Who should take on this challenge as chairperson of the 'Market Revitalisation' project? One name springs to mind - Allan Zeman, a businessman who is always brimming with creative ideas for attracting tourists. Under his stewardship, Lan Kwai Fong and Ocean Park have become must-visit places for tourists.

Though Zeman is not getting any younger, he could take local young architects under his wing to help transform the malodorous into the marvellous. The challenge to the government is to nurture more Allan Zemans to make our community a better place.

I know they can breathe new life into the old markets, turning them into shiny places of stable self-employment for thousands of families and magnets for tourists. If you doubt this, just look at what Singapore has done with its food markets. You cannot argue with success.

Michael Tien Puk-sun is vice-chairman of the New People's Party and a Hong Kong deputy of the National People's Congress