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January 13, 2011

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From rags to e-riches

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 of urban dwellers.

The most miraculous technology yet has connected 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 Taobao (, China's largest online auction and shopping website. Taobao boasts 190 million registered users, and churns out an output value of 300 million yuan (US$44.8 million) every year.

This small enterprise is known as Fullhouse Furniture Factory on China's eBay. And this fellow Sha Qing, who is under 30, is the boss. Several years ago, like countless other young men from rural China, Sha went to Beijing, the national capital, then to Hainan in south China to seek his fortune. He worked as a security guard 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 (US$1,493) per day on average," says Sha, head of Fullhouse Furniture Factory.

Not far from Sha's makeshift 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," says Liu, the online store owner.

Liu left the village in the 1990s and cooked meals for sale in the cities. Every morning at 1am, he would rise to prepare the food. Despite his diligence, he could only help his family to live hand to mouth. One month, to save money, the whole family lived on boiled vegetables, without even 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.

They make footstools, the ones people use while changing their shoes. They design them as well and also sell cupboards to store boots.

At about 5pm every day, 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, aircraft or ships, and sent to customers all over China.

Dongfeng Village is a typical farming village that used to produce thick vermicelli and raise pigs. But these industries have failed to bring wealth to the villagers. When the first online store was set up there 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 never tried farm work. Instead, after he graduated from Nanjing Forestry University, all he wanted to do was landing a job in a big city.

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

The harsh, high-pressure life in the city drove Sun 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, 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," recalls 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 baffled villagers 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," says the father.

When the son 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 struck by stories like Ikea, that he got a new idea.

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.

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

He was about to give up when he found a carpenter who offered to help him, but only on a trial basis.

With no physical stores, no customers coming to the door, or even employees, Sun would deliver dozens of orders every day. Villagers started gossiping about his do-nothing ways. It was not until his neighbor Wang Pu, a plastic recycler, paid a visit, that people understood 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 pay their arrears. With factories owing me 600,000 yuan, I had zero liquid capital. When I saw that e-commerce is transacted in cash, I thought this was a better and more stable business. Now I again have floating capital," says Wang.

Now early birds like Sun and Wang are already millionaires and their success stories are inspiring other villagers. Through word of mouths, e-business spread around the whole village.

By China's Lunar New Year in early 2009, online furniture stores were growing by one per day.

Dongfeng Village is indeed a Taobao Village. Now young people in the village don't have to migrate to big cities to work. They become bosses who employ people from nearby villages. At the gates 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 little-known town.

Both Sun and Wang now have their own furniture factories. Aside from selling online, they also provide products for other online stores. Factories like these number more than 40, and the scale is expanding. Due to his contribution to local employment, Sun has been honored as a "good Samaritan."

"I plan to invite some teachers from Taobao 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," adds Sun.

Although Dongfeng Village is pretty well known on Taobao, Sun says this is just the beginning. He has bigger ambitions.

"We are doing fairly well but it's not enough," he says.

His dream is to build Dongfeng Village into a wholesale furniture base like Likou Furniture City in Suzhou, Jiangsu Province.


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