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November 6, 2009

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Sink or swim: Young go-getters take startup business plunge

MOST Chinese college grads want nice, secure white-collar jobs. Striking out on their own and starting a business isn't on the agenda - it's hard and risky, and it's not what their parents paid for.

But the job market is tough and many are unemployed - reliable figures are not available. Some are knocking on doors and shopping their resumes, some are taking low-paying jobs they never had imagined, some are lounging at home and waiting for better times. And a few are taking the plunge into entrepreneurship.

A start-your-own business contest in Putuo District is encouraging young people to be entrepreneurs. It's giving them free space in the five-story Liu Xing Xian (Modern Line) Clothes and Gifts World Department Store.

Each gets around 10 square meters; rent is free but they pay their own utilities.

They provide their own start-up capital.

Winners will get free space for a year and split the equivalent of 2 million yuan (US$292,931).

It's organized by the Putuo District Youth League, the district's Human Resources and Social Security Bureau and the Shanghai Juwei Industrial Development Co Ltd.

In 2009, more than 150,000 students graduated from universities, colleges and vocational schools all over the city and around 70 percent are expected to find work within a year, according to official statistics. But that's considered very optimistic.

At the entrance of the department store, huge colorful posters of smiling entrepreneurs greet visitors. They're not pop star wannabes, but contestants in the "ChuangYe" (Create Business) contest of college graduates.

Launched on June 5, the project is believed to be the first of its kind in the city.

Selection began in April and 159 contestants were chosen from among more than 500 applicants.

Throughout the year, until next June, the organizer gives monthly marks (100 max) for various aspects of business, such as profitability, presentation, quality of merchandise, business plan and so on.

Five months down the road, Shanghai Daily visited a number of shops, interviewed shop owners and sponsors. They run all kinds of shops, selling dolls, cosmetics, clothing, chocolates, and many other things.

Some shops were closed.

"Thirty contestants have quit," says an official of the Putuo Youth League Committee surnamed Zhou, a major organizer.

"We're now in the knockout part of the contest lasting through December 5."

We were not able to interview dropouts.

But we learned from Zhou and other contestants that they quit for many reasons - breaking rules, financial problems, worries about their personal prospects and health problems.

"It's not a 100-meter dash," says high-scoring contestant Zhang Lei who sells exact replicas of luxury cars.

After the first six months, the real contenders slug it out.

Regulations stay in place, and points will continue to be awarded monthly.

Rules are basic: You can't sublet and you have to show up at least four days a week, among others.

"We aim to build a base for college graduates to practice running businesses, gain experience and achieve their dreams," says Zhou. "We hope to offer a real experience and help them get a good start on their future development." 'I like it' Zhang Lei scored 97 points and we saw his smiling face on the entrance poster so we stopped in first at shop No. 423.

He sells exact replicas of Ferraris, BMWs and Porsches. They are well displayed under special lights.

Zhang, 23, is a car buff. He graduated last year in law from the East China University of Political Science and Law. He was likely to work in government or maybe a law office, so why is he in sales?

"I like it," he says simply. He worked for a year in Changning House Trading Center after graduation.

"But when I heard about the contest, I quit," he says.

What do his parents think? An all-important question since they paid for his education.

"I didn't tell them at first," Zhang says. "I knew they could not agree, but now they know my business and they are supportive.

"Maybe they have to since I cannot turn back."

Zhang also sells models of Maisto, Burago, CMC from Germany and BBR from Italy.

"Some are rare, so you have to order in advance," he says.

By now, Zhang has established a large clientele, mostly companies and institutions.

"My clients don't come here very frequently, but when they do, they place big orders."

He seems pretty confident of success.

"Sure, I'll continue," says Zhang, "since I like it."

The next stop was the festive and flowery shop No. 425.

Zhang Ling, 25, a design major, sells mainly wedding invitations and candies. She graduated in 2006 from Donghua University.

"I cooperate with a Taiwanese cartoonist, promoting his brand of wedding invitations - Je Veux (I Do/Want)," says Zhang.

She has already been selling the brand for two or three years in two online shops on, China's biggest online shopping marketplace.

She jumped at the chance to get a bricks-and-mortar store.

Unlike some who take a different tack from their majors, Zhang takes advantage of her design major.

She designs her own boxes of wedding candies.

"I also have my own brand, Marryling," she says.

But around 10 square meters of retail space isn't much.

To promote her brands and products, Zhang has been participating since 2007 in wedding fairs in Shanghai and Beijing.

"We have to spend a lot of time going out and developing potential customers," says Zhang. "If we just sit in the shop every day waiting for customers, it's just no different from shop assistants."

It's a good thing for her that her parents are supportive. To make life easier for her, they even moved to a new apartment that is very close to her shop.

Zhang's repaying their investment, always getting high monthly scores.

"If one year later, I can still do this very well, or at least survive, I'll continue," says Zhang. "Otherwise, I may change my mind.

"It's business, you know, with risks."

Good thing she lives at home, all expenses paid, no risk. 'We're not shop assistants' Most Chinese young people are quite risk-averse, so we were surprised when contestant Lu Weiping told us: "No risk, no living."

He runs shop No. 585, which mostly sells board games, a fresh industry on the Chinese mainland, unlike weddings and car culture.

Lu graduated from Shanghai Jiao Tong University in bio-science in 2007. He used to work as a researcher in a pharmaceuticals company.

"But I was disappointed in the job. I couldn't see a good prospect for myself," he says. "I quit early this year and signed up for the contest."

Like other young bosses, Lu did a lot of market research and used surveys.

"I chose board games partly from personal interest," he says, "but mostly based on solid surveys - it's a really big market."

Lu thinks he's the only seller of board games in the shopping center.

"Less competition, more profits," he says.

However, money isn't rolling in. His initial investment was around 20,000 yuan; in the first month there was just 200 yuan in turnover.

"It was pretty sad," says Lu. Some contestants were quite discouraged after their first month or two and decided to quit. Not Lu.

"I believe my surveys, I believe the market is there," he maintains.

Now his monthly turnover is 6,500 yuan, and increasing.

"I don't think I will change my direction," he says. "I'm single-minded."


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