A Study on the Viability of Street Food Businesses in Hanoi Based on NEU Student Consumer Opinions and Behaviors in 2024

This study evaluates the economic viability of street food businesses in Hanoi, focusing on NEUstudents' consumer behaviors and attitudes in 2024.. This paper underscores the integralrol

NATIONAL ECONOMIC UNIVERSITY SCHOOLS OF ADVANCED EDUCATIONAL PROGRAMS

Member: Phạm Thục Khanh (Leader)

Lê Đăng Dương

Trần Ngọc Long

Nguyễn Ngọc Bảo Anh

Hoàng Trâm Anh

Vũ Thị Tùng Lâm

Class: Advanced Finance 66C

Instructor: Ass Prof Dr Nguyễn Thị Thanh Thủy

Hanoi, December 2024

TABLE OF CONTENT

8.2 Positive and Negative Aspects of Street Pavement Business

PART 2: MAJOR FINDINGS

1 Current Operations of Street Food Vendors in Hanoi

1.1 The Origin of Street Food Vendors

1.2 Profitability

1.3 Competition

1.4 Price Strategies

1.5 Cost Efficiency

1.6 Current Operations of Street Food Vendors in Hanoi

2 NEU Student Consumers’ Behaviors Toward Street Food Vendors in Hanoi 2.1 Frequency of Purchasing Street Food

2.2 Spending Patterns among NEU Student Customers

2.3 Key Purchase Drivers and Preferences

2.4 Barriers and Concerns in Street Food Businesses

3 NEU Student Customers’ Opinions Towards Street Food Businesses

3.1 Food quality and safety

3.2 The affordability and flexibility

3.3 Cultural and Social Value

3.4 The Role in the Development of the National Economy

3.5 Governance: Policies and Politics

This study evaluates the economic viability of street food businesses in Hanoi, focusing on NEUstudents' consumer behaviors and attitudes in 2024 By leveraging both quantitative and qualitativemethods, including surveys of 102 NEU students and a review of secondary sources, the researchhighlights the role of street food businesses in addressing consumer needs such as affordability,convenience, and cultural value Findings reveal that these businesses are economically viable due totheir low-cost structure and high student demand, but challenges such as food safety concerns,regulatory restrictions, and intense market competition persist The study provides recommendationsfor vendors and policymakers to enhance sustainability, including improved hygiene practices,leveraging technology, and addressing environmental concerns This paper underscores the integralrole of street food businesses in Hanoi’s cultural and economic fabric.

Keywords: Street food, NEU students, economic viability, Hanoi, consumer behavior

PART 1: INTRODUCTION

1 Research background

“Street foods” can be considered as an old-established concept and play an important role in thedevelopment of many countries From the ancient Greeks and Romans to the bustling streets ofmodern-day cities, street food has always been a convenient and affordable way to grab a quick bite

on the go Today, street food culture is thriving around the world, with food markets and festivalsdrawing crowds of hungry diners eager to sample the latest culinary creations With thesecharacteristics, consumers increasingly support this type of business Along with that, the number ofpeople choosing street food businesses to make a living also increased at a dizzying pace However,

in addition to extensive development opportunities, the sidewalk business also faces manychallenges and brings other inconveniences to daily life, such as sidewalk order management, trafficsafety, food safety, and more

Regarding Vietnam, more specifically in Hanoi, a very busy and developing city, the sidewalkrestaurant business is not only a culinary paradise for tourists but also a mirror reflecting the typicalpace of life of each locality According to Vietnam’s General Statistics Office, Vietnam’s sidewalkeconomy has contributed nearly 11 million of the total 22 million gig workers (short-term, freelanceworkers) Besides, the sidewalk restaurant business also faces many challenges In Hanoi, everyyear the authorities issue a ban on the unauthorized use of sidewalks to trade in goods, avoidingtraffic congestion There have been many confiscated eateries, sanctioned with large violations Inaddition, the issue of food safety appraisal and consumer health is also a challenge faced by streetbusinesses

This type of business is especially attractive to young people, the majority of the population,especially students, because of its convenience and affordable price That has made students themost suitable research object for research, especially NEU students, young people with in-depthknowledge of economics who are well-positioned to provide valuable insights into the viability ofstreet food businesses in Hanoi

As the aforementioned reasons regard both opportunities and challenges that street food businesseshave to face, this research aims to evaluate the viability of street food businesses in Hanoi byanalyzing NEU students’ opinions and consumer behavioral patterns and identifying keyopportunities and challenges for growth

2 Statement of the problem

The article gives the origin, benefits, and challenges of the sidewalk businesses, particularlyfocusing on the perspectives of NEU students It explores the need to limit or maintain thesebusinesses due to their impact on local culture, economy, and daily life The study also seeks toidentify suitable solutions that balance economic opportunities with the preservation of culturalheritage while addressing concerns raised by NEU students

3 Rationale

Regarding students, with a tight budget, street food is adored for several reasons: the convenienceand easy accessibility as it is quick to grab a bite between classes, the variety of options available,

affordable meals, the lively atmosphere, and cultural experiences, As a result, street vendorsremain a popular choice among students in large cities, contributing to the growth of this business.The authorities and local citizens, on the other hand, believe that sidewalks are used for pedestriansonly and start many sidewalk clearance campaigns Delving deeper into the research, we willexplore the exciting life of street vendors, understand their unique business operations and how theyhave thrived to this day Most importantly, this study seeks to elaborate on both the pros and cons ofthe street food business, finding out whether this should be encouraged or restricted through the lens

of NEU students

4 Purpose of the Research

The purpose of this research is to evaluate the viability of street food businesses in Hanoi byanalyzing NEU student customers’ opinions and behaviors Specifically, the study aims to identifykey factors influencing students’ purchasing decisions, assess their perceptions of the opportunitiesand challenges faced by street food vendors, and explore how these insights can inform strategies toenhance the sustainability and competitiveness of street food businesses Through this focus, theresearch seeks to provide practical recommendations that support the development of Hanoi’svibrant street food sector while addressing consumer needs and regulatory considerations

5 Research Questions

There are two main questions:

- How economically viable are street food businesses catering to Hanoi NEU students,considering profitability, customer demand, and operational challenges?

- What are NEU students' attitudes toward street food businesses in Hanoi based on factors such

as price, convenience, food quality, and cultural appeal that influence their purchasingdecisions?

6.2 Secondary Research

For this section, we will collect data from reputable sources, publications in scientific journals, andpeer-reviewed research reports, to gain a comprehensive understanding of both public and expertopinions While magazines and newspapers provided us with insights into social perspectives andinformation on relevant urban policies, previous research offered an academic perspective on theeconomics of sidewalk businesses and their role in urban development

7 Hypothesis

- Hypothesis 1: Street Food Businesses catering to NEU students in Hanoi are economicallyviable, driven by factors such as affordability, convenience, and high student demand,

despite facing challenges which are regulatory constraints and competition from formal foodestablishments

- Hypothesis 2: NEU students have positive attitudes toward street food businesses, withfactors such as affordable prices, food quality, and convenience being the primary drivers oftheir purchasing decisions, contributing to the growth of the street food market in Hanoi

8 Literature Review

To understand The Viability of Street Food Businesses in Hanoi, we first take a closer look at some

of the terminologies, assumptions, and aspects of Street Food Business

8.1 Definitions

8.1.1 Conceptual Definitions

As defined by the Food and Agricultural Organization (FAO) in 1986, street food includes eat foods and beverages in public spaces by small-scale vendors In Hanoi, these businesses arecategorized into fixed (registered, using sidewalks as extensions) and mobile groups (informalvendors managed by local authorities)

ready-to-Street vending is one of the informal economic activities According to the International LabourOrganization (ILO), the informal economy includes unregulated economic activities, offeringaffordability and accessibility but facing regulatory challenges Informal economies are essential forlow-income earners, providing accessible job opportunities and affordable goods and services.Street food businesses form a vital part of Hanoi’s informal economy

Solomon (2009) defined consumer behavior as the processes individuals or groups use whenselecting, purchasing, or using goods

8.1.2 Theoretical Assumptions

Firstly, The informal economy theory, as discussed by Williams and Schneider (2016), highlightsthe economic activities that occur outside the formal regulatory framework, often due to low costsand flexibility Street food vendors, as part of Hanoi’s informal economy, succeed because theyoffer affordable, accessible food options without heavy indirect costs Despite facing challengessuch as lack of regulation, their flexibility allows them to adapt quickly to changing consumerdemands, such as those from NEU students who value convenience and affordability

Secondly, The Theory of Planned Behavior (Ajzen, 1991) explains how attitudes, subjective norms,and perceived behavioral control influence individuals’ decisions For NEU students, attitudestoward street food in Hanoi are shaped such as taste, convenience, and affordability Subjectivenorms, such as social pressures NEU students feel from their friends and other social groups alsoplay a significant role in shaping their purchasing decisions Perceived behavioral control refers tostudents’ purchasing decisions based on some external contributions within their controls such asprice, and availability

These definitions and theories provide the foundation for analyzing NEU student consumers’behaviors and the economic context of street food businesses in Hanoi

8.2 Positive and Negative Aspects of Street Pavement Business

A great deal of literature explored the case of sidewalk vending or street vending and other forms ofinformal economy We will focus first on “Street Vendors in Vietnam: Short Cultural and

Economic Insight”, conducted by Thi Ngoc Quynh Huynh, in 2023 Subsequently, “ Street andSidewalk Business in Vietnam: Should be Limited or Maintained to Develop”, conducted by MaiHoang Kien, in 2023 will then be discussed exclusively These articles provide a summary of thesidewalk business's inception, advantages, and disadvantages to decide whether to limit or sustainits growth.

Firstly, street vendors are crucial to the preservation and promotion of traditional Vietnamesecuisine Huynh highlights that these vendors serve a variety of local dishes—such as pho, banh mi,bun cha, and com tam—that reflect the country's diverse regional cuisines Academic sourcesemphasize the deep-rooted cultural practices associated with street food, with many dishes beingpassed down through generations Secondly, the economic contributions of street vendors inVietnam are also significant, providing essential income opportunities for individuals with limitedaccess to formal employment While street vending is a significant source of income, it is frequentlymarginalized due to concerns over public health and safety (Huynh, 2023)

However, the sidewalk business has drawbacks In addition to being inexpensive, the sidewalk is asite where the quality of the goods is rarely inspected and the seller is lax when importing goods Thebulk of customers are students, the impoverished, and laid-back individuals who only need to buycheap; they don't care if the other sources and origins are low-quality items, fake goods, imitationgoods, or Chinese tax evasion This is also due to the cost savings Human life is still abundant on thesidewalk because of the sellers' lack of sense of responsibility, despite the fact that the products areunsanitary, unsafe for food, and detrimental to health Numerous terrible events and unfair deathsbrought on by food poisoning have occurred (Kien, 2023)

PART 2: MAJOR FINDINGS

This section presents the findings of the study, which explores the viability of street food businesses inHanoi through the lens of NEU student consumer behavior and opinions in 2024 The study gathered

data from 102 participants, aged from 18 to 22 (over 50% of whom were 20 years old to 22 years old),who currently reside in Hanoi In research on this problem, we divided the question list into 4 parts:Current operations of street food vendors in Hanoi, NEU student consumers’ behaviors on street foodvendors in Hanoi, NEU Student Customers’ Opinions Towards Street Food Businesses, and lastly,some Recommendations.

1 Current Operations of Street Food Vendors in Hanoi

1.1 The Origin of Street Food Vendors

The large mass of street vendors' workforce (90%) is farmers from the nearby outskirts of Hanoi (asreported in “Street vending in Hanoi - Reconciling contradictory concerns” by CIEM Research).Because farming is not enough to feed their whole family (agriculture commodities are too cheap),street vending helps them with their main income, supplementing food and income generated by thefarm Others (10%) are Hanoians with limited incomes When traveling from rural areas to large,urbanized cities and bringing goods to sell, these farmers naturally chose streets and alleyways wherethey might find potential customers After a while, they "landed" in a fixed spot to be morerecognizable by their daily buyers and network From small shop fronts to iconic ice tea vendors, thestreet food business has become an indispensable part of Vietnamese cultural identity Notably,according to Vietnam’s General Statistics Office, nearly 11 million of the total 22 million Vietnamesegig workers are in the street vending business Street vendors have become a source of employmentand income for a large number of poor residents

1.2 Profitability

It is not uncommon to hear some prattle about street vendors, such as: "That old lady sells sticky ricebut owns a few luxurious houses,” or "That man sells iced tea, but makes enough to feed his childrenstudying abroad.” That looks like a funny joke, but it can turn out to be true as a few people have gonerich just selling goods on the street Data from Vietnam’s General Statistics Office has shown thatstreet vendors create 11-13% of the GDP of Hanoi — conceivably more Undoubtedly, there are tens

of thousands of individuals who have steady occupations and livelihoods as road merchants, workingoverwhelmingly on the pavement Let’s do a math calculation: Initially, one street vendor might need

to invest approximately 500,000 VND to gain about 200,000 VND per day in profit If he can keep hiscustomers, this number will multiply over weeks and months, and he can make a fortune out of streetvending As an added benefit, street economies help boost the widespread availability of manyconsumer goods In fact, according to “Out-of-Home Food & Drink Consumption Trends Vietnam”Research by Decision Lab Research, Young Vietnamese (Gen Z particularly) spend an enormous13,000 billion VND every month on junk food and drinks, which street vendors play a great role inproducing them

1.3 Competition

The street food market in Vietnam is highly competitive, especially in the area surrounding theNational Economics University According to Van, P.C- a retail and franchise specialist, “By the end

of 2016, Vietnam had 149,000 street food sale points with a total value of VND 46.9 trillion and agrowth rate of 2 percent per annum.” This number has been rising dramatically over the past 8 years Take a look at Ngo Tu Do Street, within 300 meters there are about 50 food vendors lined up next toeach other These shops sell similar dishes with equivalent prices leading to increased customercompetition However, to overcome this challenge, street food vendors have adapted well by posingdifferent solutions Some of them have differentiated themselves by offering unique or trendy fooditems, others focus on customer services or promoting online advertising, they have to innovate tostand out in a crowded market Not only competing directly with local vendors, but street foodvendors also have to compete with other forms of food supply such as food delivery service or fastfood from big brands These forms of food supply are suitable for students who prefer quick, low-costmeals but with a broader choice of dishes To solve this problem, many food vendors have focused onbuilding a loyal customer base by offering consistent quality and excellent customer service Theyalso advertise on social media such as TikTok and Facebook or sell online for more income.According to the survey, 95,1% of respondents believe that leverage technology is helpful for streetfood businesses

1.4 Price Strategies

To solve the highly competitive situation, roadside restaurants have created diverse pricing strategies.Firstly their dishes are commonly affordable, understanding the price-sensitive consumers, Streetfood businesses have priced their dishes competitively

According to the pie chart, customers mostly spend 20.000-50.000 VND per meal, which is also themost common price range in street food vendors If street food businesses price their products toohigh, customers may switch to other, cheaper alternatives; if the prices are too low, it may not coverthe costs or allow the business to maintain quality Secondly, street food vendors also offerpromotional discounts such as student discounts, loyalty programs, or combo deals frequently, whichhelps attract repeat customers Especially, they have to have a reasonable Value Perception, whichmeans pricing must be about the perception of value The street food business must therefore balanceprice, portion size, and quality Finally, vendors have offered free extras, such as a side dish or extratoppings, which enhance customer satisfaction without greatly increasing costs

1.5 Cost Efficiency

Street food vendors have optimized their prices by using affordable ingredients: buy local ingredients

to reduce food costs, and ensure ingredients are used across multiple menu items They also make

efforts to recruit and train effective labor sources keeping a small, cross-trained team to handle

cooking, sẻving, and cleaning, minimizing labor costs Additionally, portion control is alsorecommended by implementing different portions to minimize food waste and use up all preparedingredients at the end of the day In each portion, they use ingredients that can be used in multipledishes to reduce waste and increase efficiency Moreover, the street food business has a diverse,mobility, and temporary nature so location and timing are very crucial to increase profit Some streetvendors even have a strategic plan: they often choose a location with high foot traffic and easy access

to customers while also identifying the peak hours for their target market and adjusting their operatinghours accordingly

1.6 Current Operations of Street Food Vendors in Hanoi

A street food business catering to NEU students in Hanoi can sustain itself economically Key factorsfor success include maintaining a low-cost structure, offering affordable yet desirable food, ensuring

a convenient and accessible location, and building customer loyalty With the right planning, thebusiness could generate steady revenue and achieve profitability within a short period

2 NEU Student Consumers’ Behaviors Toward Street Food Vendors in Hanoi

2.1 Frequency of Purchasing Street Food

The data on the frequency of street food purchases by NEU students reveals interesting trends intheir consumption habits A significant majority of NEU students (81.9%) engage in this activityregularly, with 5.7% buying street food daily (at least once a day), 30.5% usually purchasing (4-5times per week), and 45.7% occasionally (2-3 times per week) This highlights the prominence ofstreet food in their daily lives, driven likely by its convenience, affordability, and accessibility.Meanwhile, around 18% of the respondents reported rarely purchasing street food (1-3 times permonth), pointing out the potential concerns (i.e hygiene, health consciousness), or otherpreferences for other food options In particular, none of the participants reported having everconsumed street food, accentuating its universal appeal among NEU students and underscoring itscultural and economic relevance in their lives

2.2 Spending Patterns among NEU Student Customers

The spending patterns of NEU students on street food suggest that affordability plays a vital role intheir decision-making process Over half of the students (55.8%) spend between 21,000 VND and50,000 VND, reflecting a strong preference for moderately priced food, which is reasonable sinceuniversity students have a tight budget Additionally, 27.5% of students spend around 51,000 VND

to 80,000 VND, indicating that a significant portion of students are willing to purchase more forhigher-quality food or a more substantial meal, signaling that price sensitivity is not absolute andvaries depending on their needs or the types of food being offered

A smaller proportion (6.7%) of the participants spend over 80,000 VND to below 150,000 VNDindicating that this group may view street food as a more occasional treat or a meal worth spending

a bit more on, perhaps during weekends or special outings The minority (0.8%) that spends over150,000 VND reflects those who might indulge in premium street food options or combine mealsfrom different vendors This is probably because given that over half of the respondents arebetween 20 and 22 years old, they are more likely to have some level of financial independence,whether through internships, part-time jobs, etc This suggests that they might not be as financiallyconstrained as younger students, and are more willing to spend higher amounts of money on streetfood in particular

On the other hand, 9.2% of the respondents who spend less than 21,000 VND likely opt forsnacks or small servings, suggesting that even those with tight budgets still partake in street food,albeit in smaller quantities

2.3 Key Purchase Drivers and Preferences

2.3.1 Key Purchase Drivers

We presented a list of factors influencing participants’ street food purchase decisions to choosefrom and the result reveals many interesting patterns The pie chart above indicates that the tasteand quality of the food (26%) is the most influential factor, emphasizing the importance of offeringflavorful, high-quality dishes to attract student consumers to street food vendors in Hanoi Whilestreet food is known for its affordability, NEU students also prioritize the sensory and satisfactionaspects of their meals, seeking vendors delivering enjoyable food

Price (23.1%) follows closely as a critical driver, reflecting the financial considerations typical ofthe student demographic This finding underscores the need for street food vendors to maintainreasonable and competitive pricing to attract more budget-conscious customers while balancing itwith good quality

As students often have busy lifestyles and rely on street food for quick and accessible meals,convenience (20.8%) also plays a significant role in influencing purchasing decisions Thishighlights that vendors operating near NEU or other high-traffic areas may find this factoradvantageous

A variety of options (12.3%) is another noteworthy driver, as it demonstrates students’ desire forchoices and novelty in their food experience Vendors who offer diverse menus can cater to thisneed and attract repeat customers Similarly, recommendations from friends and family (13%)suggest that word-of-mouth plays an important role in driving sales, highlighting the value ofcustomer satisfaction and positive reviews

2.3.2 Preference

When it comes to street food, NEU students show a clear preference for quick, affordable, andfamiliar options, as students are often looking for something fast and satisfying between classes.The participants in our study gave many different choices for purchasing street food, but some ofthe most prominent options are Phở, Bánh Tráng Nướng (Grilled Rice Paper), and Grilled MeatSkewers Here is a sharing from one of our study’s participants about his or her favorite street foodexperience in Hanoi: “Grilled meat is one of my favorites There’s one near my house and I’veeaten there for many years The owner is always welcoming and the food is delicious, attractiveand absolutely affordable The meat is richly marinated and grilled to perfection, just the scentmakes people want to eat.”

Overall, the preferences of NEU students towards street food reveal a strong inclination towardaffordable, accessible, familiar, and sometimes - nutritious food options - that fit seamlessly intotheir lifestyles

2.4 Barriers and Concerns in Street Food Businesses