Reaping the benefits of positive thinking
Print Edition
The village of Jiuxing in Minhang District is now widely known across China as a large marketplace specializing in building and decoration supplies. In 15 years, it has transformed itself from a rural backwater into one of the wealthiest villages in Shanghai.
Wu Enfu, chairman of the Jiuxing Group and a former director of Jiuxing Village, is the driving force behind the creation of the 800,000-square-meter market, which does an estimated 28 billion yuan (US$4.6 billion) of business every year and earns the group annual rental fees of 1 billion yuan.
Jiuxing’s name — jiu means “nine” in Chinese and xing means “star” — comes from the number of production teams that once dominated the agriculture of the area.
“It used to be a very poor village, with debt reaching 17.8 million yuan in 1994,” Wu said, reflecting back to the time when he was appointed village leader. “Villagers’ average annual income was less than 3,000 yuan a year.”
That income has multiplied almost ninefold in 15 years, as production volume surged 33 times. “The only thing on my mind at the time was that we couldn’t have villagers look forward to endless poverty in their lives,” Wu said.
So the enterprising village leader gathered a team around him and devised a strategy to inject new economic life into the area. It involved an industrial area and the development of services industries in the village center.
In 1995, the year after Wu was appointed village leader, a big parking lot and a farmers’ market selling ducks and vegetables were built on land owned by the village government. The two additions produced revenue of 18 million yuan the first year, wiping out the village debt.
The market location was such valuable real estate that Wu and his team decided to expand it into a wholesale market for vendors of building and decorating materials. That process began in 1998. “The parking lot and farmers’ market kicked off the transition from predominately agriculture to services, and the formation of the Jiuxing market as it exists today completed the process,” said Zhang Zhigang, director of the China Commerce Association.
Success brought new challenges. “In 2005, I started to worry about the future of the market, given the limitations of space,” Wu said.
So another strategy was developed. The market’s products and prices, which started out cheap, moved upscale. That meant not only more choice for buyers but also a higher average unit price per item sold. Today, consumers at the market can find products from inexpensive to luxurious, from domestic factories to imported goods.
The Jiuxing Group has since expanded into e-commerce, travel, advertising and art collection.
“The multiple directions of the business are the base for the sustainable development of the market,” said Wu. ”We are always looking for suitable doors to open for Jiuxing.”
The founding of the China (Shanghai) Pilot Free Trade Zone (FTZ) and startup of more creative arts factories are being hailed as good omens for the market’s future.
Wu said the Jiuxing market will become more international. It will utilize online shopping and will seek overseas buyers.
Underscoring the market’s success, activities celebrating the 15th anniversary attracted commercial brand exhibitions and the National Countryside Marketing Development Forum.
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