China Exclusive: China's poor village logging onto wealth

China Exclusive: China's poor village logging onto wealth By LiuZhaoquan, Lin Kai & Gu Ye

BEIJING, Jan. 2 (Xinhua) -- E-commerce is often associated withurbanites. However, as more and more people are connecting to theInternet -- 420 million people in China had done just that by Julythis year -- online businesses are no longer the monopoly for urbandwellers.

The most miraculous technology for human kind yet has connectedthe world to even the most remote corners of the globe. In eastChina's Jiangsu Province, a village in an impoverished county evenmanaged to turn itself into a comparatively wealthier place throughe-commerce.

There are over 1,000 households in Dongfeng Village, SuiningCounty. What's amazing is that more than 400 of these households aremanaging online furniture shops at www.taobao.com, China's largestonline auction and shopping site. Taobao boasts 190 millionregistered users, and churns out an output value of 300 millionyuan, or around 44.8 million U.S. dollars every year.

This small enterprise is known as Fullhouse Furniture Factory--on China's eBay, Taobao.com. And this guy Sha Qing who is under 30,is the boss. Several years ago, like countless other young men fromrural China, Sha Qing went to Beijing, the national capital, then toHainan in south China to seek his fortune. He worked as securitystaff and a taxi driver. Two years ago, he returned to his villageand started his own online store.

"I have fewer than 20 employees. We make about 10,000 yuan or1,493 dollars per day on average," said Sha Qing, head of FullhouseFurniture Factory

Not far from Sha Qing's make-shift factory, 48-year-old LiuXingqi is at home bargaining with customers online. Liu has neverlearned Pinyin, a romanized system for Chinese characters, ortyping. But this does not hamper him running a brisk onlinebusiness.

"I handwrite all the transactions with the help of handwritingrecognition software," said Liu Xingqi, online-store owner.

Liu left the village in the 1990s and cooked meals for sale inthe cities. Every morning at 1:00 am, he would rise to prepare thefood. However, his diligence could only help his family to live handto mouth. One month, to save money, the whole family lived on boiledvegetables for meals, without even adding a drop of oil. In 2007,after hearing that fellow villagers had made a fortune throughopening online stores, he returned home and started his own. Now, ona good day, Liu can earn more than 1,000 yuan per day, that's about149 dollars.

"We make footstools. The ones people use while changing theirshoes. We do the design ourselves. There are also tall stools tostore boots," said Liu.

At about 5 O'clock every afternoon, the streets outside thevillage committee are bustling. Staff from dozens of the expressdelivery companies are out loading thousands of packages ontotrucks.

Every day, these express deliveries depart from Dongfeng Village,and head for the adjacent Huai'an, where they are then loaded ontotrains, airplanes or ships, and sent to customers all over China.

Dongfeng Village is a typical farming village that used toproduce thick vermicelli and engage in pig farming. But theseindustries have failed to bring wealth to the villagers. When thefirst online store was set up in Dongfeng Village three years ago,few villagers knew much about the Internet.

Sun Han was born in 1982. His father worked at a cooperativestore in town, so at that time the family was financially stable.Sun Han never tried his hand at farm work. Instead, after hegraduated from Nanjing Forestry University, all he wanted to do wasland a job in a big city.

"I've worked as security staff and a salesman, both with smallsalaries, and not enough to live on. My parents had to mail me moneyto tide me over," Sun said.

The cruelty and pressure of life in the city drove Sun Han backhome to Suining Town, where he then became a manager of customerservices at a local branch of China Mobile. His monthly salary wasmore than 2,000 yuan, or 294 dollars, but his parents were satisfied

"In the beginning, he wanted to quit the job at China Mobile, andsaid it was too tiring. I talked him out of it," recalled SunDeqiang, Sun Han's father.

Later, Sun Han did quit his enviable job, and bought the firstcomputer in the village that was connected with the Internet. Whathad villagers baffled was the fact that he didn't have to leave hometo go out to work, instead staying at home and spending his money onelectricity and internet connection charges.

"They thought he was just wasting time and was no-good," saidSu's father.

When Sun Han first started to do business online, he dealt onlyin small commodities like shavers and flashlights, which had verysmall profits. It was not until 2007 when he went to Shanghai andwas drawn by stores like Ikea.

"There is a lot of simple wooden furniture at Ikea. I thoughtthat if we can make similar things ourselves, it could be quiteprofitable," noted Sun Han.

So with 2,000 yuan in his pocket, Sun Han started to look aroundthe village and town for carpenters. But none of the 20 or soworkers he approached was willing to do it.

"I mostly went to coffin makers or door makers, because in ourarea the furniture trade was virtually non-existent," Sun Hanexplained.

Sun was almost about to give up when he found a carpenter whooffered to help him. But even he would only take the job on trialbasis.

"The carpenter agreed to make the specific furniture for me. Whenwe uploaded the photos of our products, our online business began."

With no actual stores, no customers coming to the door, or evenemployees, Sun would deliver dozens of orders everyday. Villagersstarted gossiping again. It was not until his neighbor Wang Pu, aplastic recycler, visited him one day, when the villagers actuallygot to know what was going on.

"In 2008, at the start of the financial crisis, the plasticindustry was at such low ebb that businesses could hardly makearrears back. With factories owing me 600,000 yuan, that's about88,235 dollars, I had zero floating capital. When I saw that e-commerce is dealt with in cash, I thought this was a better and morestable business. Now I again have floating capital," said Wang Pu.

Now early birds like Sun Han and Wang Pu are already millionairesand their success stories are very inspiring to the rest of thevillagers. Through word of mouths, this new business mode spreadaround the whole village. By Spring Festival, China's lunar New Yearin early 2009, online furniture stores were growing by one per day.

Dongfeng Village is indeed a Taobao Village, the treasure-hunting village of China.

Now young people in Dongfeng Village don't have to migrate to bigcities to work. They become bosses who employ people from nearbyvillages. On the gate of almost every furniture factory arerecruitment posters. In Shaji Town where Dongfeng village islocated, furniture enterprises, delivery companies, accessory shopsand online store services are mushrooming, forming a chain of e-commerce in this town little known to outsiders.

Both Sun Han and Wang Pu now have their own furniture factories.Aside from selling online, they also provide products for otheronline stores. Factories like these have risen to over 40, and theirscales are expanding fast. Due to his contribution to localemployment, Sun Han has been honored by Shaji Town as a "goodSamaritan" .

"I plan to invite some teachers from Taobao.com to give sometraining to local villagers on marketing skills. Many of us are notvery professional. Now my factory provides products for my onlinestore and others' stores. If they sell well, my sales grow," addedSun Han.

On Dec. 16, some online-store owners gathered at Sun Han's place,and decided to set up an E-commerce association in Shaji Town. AndSun Han has been named as its first president.

"Our members will have many benefits. We will have unifiedbargain prices for hardware fittings, thus cutting costs."

Although Dongfeng Village is pretty well known on Taobao.com, SunHan still deems it as a beginning. He has even bigger ambitions.

"We at Shaji are doing fairly good. But it's far from myexpectations." It's Sun's dream that Dongfeng Village will become awholesale furniture base like Likou Furniture City in Suzhou.

Villagers refer to Dongfeng Village as "The fertile soil for E-Commerce". Entrepreneurs are contemplating how to develop it furtherwhile the local government is also deliberating on how to bettersupport them.

Huang Hao, party secretary at Shaji Town, said: "We are planningto build a 3.3-hectare furniture-industry park to host some of themature enterprises. Each enterprise will get a 2,000-square-metrefloor space for its factory."

Now, besides planning for expansion and intensive management,many designers for the online stores are thinking about a breakawayfrom copycat products, to develop furniture with their own patent.

"I start to sell this furniture a few months ago. I have soldmore than 300 pieces. And this is my own patent," said Wang Yao, anonline-store owner.

A seminar on E-Commerce in rural China was held in Shaji Town onDec. 18. Now Sun Han is planning to shift most of his onlinebusiness to real export offline. His target is 10 million yuan or1.49 million dollars. Wang Pu plans to make varnished furniture andturn high-end. And other villagers hope to buy cheaper land fortheir factories.