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China's poor village logging onto wealth

Updated: 2011-01-03 13:55

(Xinhua)

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BEIJING - E-commerce is often associated with urbanites. However, as more and more people are connecting to the Internet -- 420 million people in China had done just that by July this year -- online businesses are no longer the monopoly for urban dwellers.

The most miraculous technology for human kind yet has connected the world to even the most remote corners of the globe. In east China's Jiangsu province, a village in an impoverished county even managed to turn itself into a comparatively wealthier place through e-commerce.

There are over 1,000 households in Dongfeng village, Suining county. What's amazing is that more than 400 of these households are managing online furniture shops at www.taobao.com, China's largest online auction and shopping site. Taobao boasts 190 million registered users, and churns out an output value of 300 million yuan, or around $44.8 million 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 from rural China, Sha Qing went to Beijing, the national capital, then to Hainan in south China to seek his fortune. He worked as security staff and a taxi driver. Two years ago, he returned to his village and started his own online store.

"I have fewer than 20 employees. We make about 10,000 yuan or $1,493 per day on average," said Sha Qing, head of Fullhouse Furniture Factory

Not far from Sha Qing's make-shift factory, 48-year-old Liu Xingqi is at home bargaining with customers online. Liu has never learned Pinyin, a romanized system for Chinese characters, or typing. But this does not hamper him running a brisk online business.

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

Liu left the village in the 1990s and cooked meals for sale in the cities. Every morning at 1:00 am, he would rise to prepare the food. However, his diligence could only help his family to live hand to mouth. One month, to save money, the whole family lived on boiled vegetables for meals, without even adding a drop of oil. In 2007, after hearing that fellow villagers had made a fortune through opening online stores, he returned home and started his own. Now, on a good day, Liu can earn more than 1,000 yuan per day, that's about 149 dollars.

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

At about 5 O'clock every afternoon, the streets outside the village committee are bustling. Staff from dozens of the express delivery companies are out loading thousands of packages onto trucks.

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

Dongfeng village is a typical farming village that used to produce thick vermicelli and engage in pig farming. But these industries have failed to bring wealth to the villagers. When the first 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 cooperative store in town, so at that time the family was financially stable. Sun Han never tried his hand at farm work. Instead, after he graduated from Nanjing Forestry University, all he wanted to do was land a job in a big city.

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

The cruelty and pressure of life in the city drove Sun Han back home to Suining town, where he then became a manager of customer services at a local branch of China Mobile. His monthly salary was more than 2,000 yuan, or $294, but his parents were satisfied.

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

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

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

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

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

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

"I mostly went to coffin makers or door makers, because in our area the furniture trade was virtually non-existent," Sun Han explained.

Sun was almost about to give up when he found a carpenter who offered to help him. But even he would only take the job on trial basis.

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

With no actual stores, no customers coming to the door, or even employees, Sun would deliver dozens of orders everyday. Villagers started gossiping again. It was not until his neighbor Wang Pu, a plastic recycler, visited him one day, when the villagers actually got to know what was going on.

"In 2008, at the start of the financial crisis, the plastic industry was at such low ebb that businesses could hardly make arrears back. With factories owing me 600,000 yuan, that's about $88,235, I had zero floating capital. When I saw that e-commerce is dealt with in cash, I thought this was a better and more stable business. Now I again have floating capital," said Wang Pu.

Now early birds like Sun Han and Wang Pu are already millionaires and their success stories are very inspiring to the rest of the villagers. Through word of mouths, this new business mode spread around the whole village. By Spring Festival, China's lunar New Year in 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 big cities to work. They become bosses who employ people from nearby villages. On the gate of almost every furniture factory are recruitment posters. In Shaji town where Dongfeng village is located, furniture enterprises, delivery companies, accessory shops and 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 other online stores. Factories like these have risen to over 40, and their scales are expanding fast. Due to his contribution to local employment, Sun Han has been honored by Shaji town as a "good Samaritan" .

"I plan to invite some teachers from Taobao.com to give some training to local villagers on marketing skills. Many of us are not very professional. Now my factory provides products for my online store and others' stores. If they sell well, my sales grow, " added Sun 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. And Sun Han has been named as its first president.

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

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

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China's poor village logging onto wealth Distribution sector: healthy and growing but needs more e-commerce
China's poor village logging onto wealth E-commerce war on the cards

"We at Shaji are doing fairly good. But it's far from my expectations."  It's Sun's dream that Dongfeng village will become a wholesale 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 further while the local government is also deliberating on how to better support them.

Huang Hao, party secretary at Shaji town, said: "We are planning to build a 3.3-hectare furniture-industry park to host some of the mature enterprises. Each enterprise will get a 2,000-square-metre floor space for its factory."

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

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

A seminar on e-commerce in rural China was held in Shaji town on Dec 18. Now Sun Han is planning to shift most of his online business to real export offline. His target is 10 million yuan or $1.49 million. Wang Pu plans to make varnished furniture and turn high-end. And other villagers hope to buy cheaper land for their factories.

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