How formal shapes informal: The case of informal businesses in mixed-use streets

In the Global South, informal businesses play a significant role in urban economies; yet their spatial interdependence with the formal sector remains underexplored. This study investigates how the formal commercial environment influences the agglomeration of informal vendors in mixed-use neighbourhoods of Delhi, India. Using binary logistic regression, it examines micro-scale drivers such as commercial performance, business typology, clustering, spatial mixedness, connectivity, and accessibility on mixed-use streets and their effect on occurrence of informal vending. Model results reveal informal vendors strategically align with formal businesses based on their higher sales and customer footfall. Retail establishments, are more likely to attract informal activity compared to services, emphasizing complementary demand. Similarly clustering of formal trades in these streets acts as a catalyst for informal trade agglomeration. Spatially, increased connectivity and accessibility at local level also elevate the likelihood of informal activity occurrence. These findings challenge perceptions of informality as incidental and instead demonstrate its adaptive symbiosis with formal commercial environment. The empirical findings advocate inclusive planning in the cities of Global South, by recognizing informal-formal interdependencies in context to resilient urban economies. • The research examines how the formal commercial environment shapes informal vendor locations on mixed-use streets. • Vendors agglomerate near high-sales, high-footfall retail stores, showing commercial success drives informal clustering. • Clustering of similar businesses and non-resident owners attracts informal activity, driven by socio-economic dynamics. • Connectivity and accessibility increase informal agglomeration, highlighting walkability and visibility in location choices.