Students from Yiwu Industrial and Commercial College send packages to a dispatching office on campus. The goods are sold from their online shops. Zhang Jiancheng / for China Daily

Low investment, quick returns offer profit-making opportunities for struggling students

Crowded stores, frustrated shoppers and inexperienced shop assistants are forcing more and more Chinese customers to make their purchases online with the click of a button.

The online shopping surge has proved to be a windfall for several unemployed graduates in China. Most of them have set up online shops that sell products ranging from handbags to even mobile phones.

With the number of online shoppers poised to increase this year, it would be no surprise if one were to see more and more online shops coming up in the next few months.

But for many graduates like Deng Xiao, online shops are their bread and butter. Things looked bleak for Deng after she graduated in 2008 from a relatively unknown school in Hebei province. This, coupled with an unattractive subject major, diminished her job prospects.

After being rejected for several jobs, the 25-year-old Deng decided to test the relatively unknown waters of online shops.

"It was not an easy decision. On the one hand there was the pressure of getting a job immediately as I could no longer rely on my parents to bail me out. I could not get a job as my qualifications were not impressive nor did I have any prior working experience. The only thing I could do at that time was to open an online store, as it does not require huge investments or extra talent.

"There was considerable opposition from my parents and friends. They wanted me to find a regular and paying job. It was not that I was averse to the idea, but my efforts had not been successful. The job market was tight and there were hardly any promising prospects for several graduates like me," says Deng.

Having taken the decision to strike her own path, Deng teamed up with her schoolmate and raised 10,000 yuan (1,118 euros) from parents and friends. The two friends set up an online shop that sold ladies handbags.

"Business was really bad in the initial months. Many days we were unable to sell even a single bag," says Deng.

"We were determined to make our venture a success and despite the several adversities decided to stick on."

The two friends soon chanced upon an idea to promote their shop on campus bulletin boards and other online platforms.

Much water has flowed under the bridge since then and the venture is now clocking steady profits, says Deng. "We have reached a period of stability now and on an average have a monthly income of 5,000 to 7,000 yuan."

The duo is also excited by the online shopping growth and plans to expand their range to other products soon.

"The online shop has not only solved my unemployment problem, but also taught me several lessons. It has taught me the importance of being in constant communication and also the need to be on the lookout for profitable deals that may interest customers," Deng says.

That confidence now seems to rubbing off in a nation teeming with millions of new graduates every year.

Many like Deng have now decided to shape their own destiny in the online world.

A recent survey conducted by Guangdong University and Sun Yat-Sen University revealed that nearly 60 percent of the graduates surveyed were keen on setting up an online shop, with 30 percent of this group having already initiated preparations for the same.

"It is easy to own a store online, if you have a computer with Internet access, and a digital camera. All that one needs to do is to sign up on shopping portals and then set up an online store to sell the products," says Xue Qian, a student.

The low cost and simple procedure makes it easy to set up and manage, says Xue.

According to data from the Ministry of Education, by July 2010 there were about 1.76 million graduates in China who were unemployed.

That accounts for 27.8 percent of the nation's 6.3 million college students who graduated at the end of June.

The prospects for this year also do not look bright with more than 6.6 million fresh graduates expected to look for jobs.

"Though the employment market in 2011 will be better than earlier years, it is still bleak for fresh graduates who have no prior work experience," says Ying Li, deputy general manager of China International Intellectech Corporation, a human resource management firm.

"Students should plan their career based on their character, interest and working ability," says Ying.

Available data suggests that nearly 40 percent of the online sellers at Taobao, eBay and other online shopping platforms are college students.

More than 62 percent of the online sellers are in the 18-32 age group.

Typically college students who open online stores can earn monthly incomes of 1,000 to 4,500 yuan, says Lu Weixing, director of public and client communication at Taobao.com, China's largest online retail site.

Taobao has around 200 million registered members and an annual turnover in excess of 200 billion yuan. The company also accounts for at least 1 million online sales jobs.

But not everyone is warming up to online sales. "It loses touch with reality. You have to talk to an unknown face in the computer," says an auto salesman surnamed Meng.

Online shop owners also do not get any social and health insurance. This more or less creates an insecure feeling," Meng says.

"Opening online stores is a useful attempt for entrepreneurship. It has low risk and boosts practical experience," says Huang Hongzhen, a lecturer at Guangdong University of Business Studies.

"Most of the online shop owners are focusing only on customer to customer sales and not the entrepreneur business model. In the long run, it is the latter that will offer better returns," says Huang.