As many most developed cities like New York City, London or Paris have long forgotten their long history of chaotic, low-regulated street markets, Hong Kong still allows hawkers, mongerers and chafferers to strive in some designated zones. Some particularly exciting ones stretch all the way from Mong Kok Stadium to Austin Road, featuring live animals, souvenirs, magic, stones and antiques.
Economically speaking these markets easily demonstrate econ 101. There are plenty of merchants and customers, nobody seems to have any abnormal market power, and because all shops are found in a small area, customers can easily compare prices, and competition is fierce. Margins are low, and the consumer seems to win, at least judging by the comparatively great deals you can get.
To find a more profitable niche, shops have to specialize, leading to a huge variety in products and services.
The market, however, is not as free as you might think. Just like in Taxi licensing, many problems come from the restrictive licencing of such markets. In many cases new licences have not been handed out since the 70s, and reform is not in sight.
I invite you on this stressful but rewarding journey through which you can buy literally anything that the endless factories of mainland China have to offer.
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