It’s Par for the business course

At a college in Zhejiang province, students are encouraged to worry more about starting a business than studying the theory of doing so. Han Bingbin reports in Yiwu, Zhejiang.

It's Par for the business course

Yiwu Industrial & Commercial College graduate Yang Fugang at his warehouse in Yiwu, Zhejiang province. Han Bingbin / China Daily

Yang Fugang is already a legend at his alma mater, Yiwu Industrial & Commercial College, in Zhejiang province.

He’s the boss of a home furnishing accessories and knitwear manufacturer, with annual sales of more than 40 million yuan ($6.27 million), sold mainly on Taobao (China’s leading online marketplace).

But just six years ago, he was a poor freshman who picked up empty bottles on campus to sell and cover his living expenses.

In 2007, on the suggestion of a friend, he opened his first online shop on Taobao, selling home accessories and cosmetics.

Taking advantage of Yiwu’s booming manufacturing base, his business quickly became successful. By 2008, a year before he graduated, he was already making more than 30,000 yuan a month.

About that time, he moved into a rented apartment where he started hiring employees to help with his growing business. Living off-campus was against school rules at the time, so Yang had to keep his plans under wraps.

What he didn’t know was that Jia Shaohua, vice-president of the vocational college, was also fermenting his own ideas.

At the time, attendance at classes was low and Jia, whose daughter is a Tsinghua University graduate, was organizing self-study classes and arranging roll calls to improve this situation – but with little success.

Jia then tried another tack, by encouraging his students to start their own businesses. It was at this point that he heard about Yang’s success and in response decided to found a so-called enterprise school to “copy and paste Yang’s model on a large scale”.

At a meeting with Jia, Yang (an underachiever at high school) was called a “hero” for the first time. His name soon appeared in public speeches and enrollment advertisements.

His example inspired Zhang Luoluo and some other 100 youngsters to become the first students of the college’s enterprise school in 2009. Some of them abandoned the chance to enter a higher-level college.

Zhang, from Henan province, started his college life by opening a shop on Taobao and in the following three years, “earning more money” was his principle motivation.

When his high school buddies spent their parents’ money traveling, he was in front of the computer eight hours a day taking care of his online knitwear business. Very soon the then 21-year-old learned to bargain with wholesalers and deal with after-service issues.

In his sophomore year he was making about 4,000 yuan a month, which is when he moved off campus and rented a suburban apartment, where he hired two employees to turn a roomful of stockings and scarves into money.

Making “business top priority”, the school has introduced delivery companies to students, and they are allowed to take orders in class.

Meanwhile, general education courses such as advanced mathematics have been eliminated from the curriculum; while photography, shop design and taxation have been encouraged because they serve the needs of the students, says Zhu Huabing, dean of the enterprise school.

Students are even allowed to skip classes as long as they do well in their business and pass their final tests, Zhang says.

But business performance appears to be more important than final examinations to many students.

Zhang’s classmate Shi Haojie failed six courses this year – which generally leads to a student being expelled – but instead he graduated as an outstanding student.

The reason is he owns three factories with annual sales of more than 10 million yuan. As such, Shi is a model student.

“Failing the tests doesn’t mean he hasn’t mastered the skills. Take the marketing course, for example. Being so successful in his business, Shi clearly doesn’t have any problems with marketing,” Zhu says.

Even so, to counter those who say studying textbooks is useless, professor Yang Jianhua at the Zhejiang Academy of Social Sciences, was reported as telling provincial media that accumulation of knowledge is useful for social development. Thus, he argued, in addition to practical business training, there is still a crucial need for “humane education”.

During a speech at Peking University two years ago, columnist Xu Zhiyuan said Peking University and Yiwu Industrial & Commercial College represent the opposite extremes of higher education.

He said he was saddened by the fact that both are confused with the “goal of education”, which he said was “to guide and inspire students to find what they need”.

But for vocational college vice-president Jia, his goal has never been so clear. So-called humane education sounds good, he says, but it’s not always feasible. Calling his students “losers in the examination-oriented education system”, he believes practical training is a more apt choice for these young people.

“The fundamental need is to help them survive rather than encourage them to pursue so-called higher-level ideals,” says Jia.

So far, more than 1,800 students at the college, including those at enterprise school, have started their own e-businesses, creating annual revenues of more than 28 million yuan and providing more than 1,000 jobs.

More than 80 of these students have an annual income of more than 100,000 yuan. Zhang Luoluo is one of them. During the busiest period, his knitwear shop on Taobao makes more than 30,000 yuan a month.

Full of gratitude to the college, he plans to own factories, buy a car and then an apartment.

Even so, there are some regrets. Back in high school, he used to picture his college life as a mixture of simple courses, club activities, group trips and a splash of romance. But during his three strenuous years, none of this actually happened.

“I was so busy, there were many things I didn’t have time to do before I graduated,” he says.

“For example, I only went to the library once and I didn’t even have time to sit down before I had to rush off and do something else.”

Yiwu , Alibaba to Promote E-business

China’s largest small commodity wholesale market in Yiwu, eastern Zhejiang Province, joined hands on Thursday with Chinese e-commerce powerhouse Alibaba to promote its online business.

Zhejiang China Commodities City Group Co., Ltd. and Alibaba Group inked a deal Thursday afternoon in Hangzhou, capital of Zhejiang Province, to improve cooperation of the two sides in the field of e-commerce.

“The deal will take the full advantages of each side in commodity outsourcing, logistics as well as in marketing and human resources,” said Jin Yonghui, director of the Department of Commerce of Zhejiang Province.

According to the agreement, dealers at Yiwu marketplace will be able to open online businesses at Tmall.com, a popular B2C online marketplace for high-end goods.

In the meantime, Alibaba will provide dealers at Yiwu marketplace with training programs on e-commerce.

Industry observers say the cooperation of the two sides signals the deepening and further merger of online and offline business models.

Before the signing of the agreement, more than 40 percent of dealers at Yiwu marketplace had already started their online businesses via Alibaba’s popular C2C platform of Taobao.com.

In 2011, online sales revenue of Yiwu dealers at Taobao.com topped 12 billion yuan (1.9 billion U.S. dollars), accounting for 23 percent of the marketplace’s total sales revenue.

Zhejiang China Commodities City Group Co., Ltd. was first established in 1993 and listed at the Shanghai Stock Exchange in 2002.

Yiwu small commodities market sees sales decline amid economic slowdown

The city of Yiwu, famous as a wholesale marketplace for small commodities trading, has felt the pain of the economic slowdown in Europe and the US. 

Many traders in this Zhejiang Province city now think back fondly on the not-so-distant past, when an estimated 210,000 merchants a day – including 13,000 from abroad – buzzed about in a marketplace of some 60,000 stalls, offering almost 2 million pieces of merchandise that ranged from Christmas ornaments to toys and jewelry. 

Yiwu was such a thriving marketplace that the State Council, China’s cabinet, made it home to the nation’s small commodity index – a barometer of global consumer goods prices. 

In the past, Yiwu merchants sold about two-thirds of their products to foreign buyers. Now, with Europe facing a debt crisis and recession and the United States in a somewhat slow and shaky recovery, orders are drying up and the once noisy marketplace has lost some of its buzz. 

“I am experiencing the worst times since I started my business in 2000,” said Liu Hua, general manager of the Lucky House Toy Factory. “Sales have dropped 10 percent in May alone.” 

Liu and her husband ran a factory with 50 workers in Yiwu, selling dolls and cartoon wallets at a market stall. Theirs was a pattern similar to that of many other traders in the city. At a high point in 2008, the couple was earning a 20 percent profit on its goods. 

Whereas foreign buyers once accounted for 80 percent of the merchandise Liu sold, that ratio has now turned domestic. Where once she dismissed domestic retail buyers, now she courts the droves of consumers who come to the city looking for bargains. Products wrapped in bulk for the wholesale trade have been torn open and repackaged to accommodate the smaller-lot domestic trade. 

A certain sense of despair spreads across the relatively new four-story, air-conditioned Yiwu marketplace. 

Merchants sit in front of their stalls with little to do but discuss bad times with fellow stall owners. Some sleep or while away the time playing computer games. Tele-controlled aircraft toys fly effortlessly through mostly empty passageways as vendors try to attract attention. 

Domestic market 

There are still foreign traders, mostly from India and the Middle East. They walk through the marketplace with their Chinese translators, browsing and asking about prices. If they want to buy, they can drive hard bargains. 

“Sales have dropped by up to 30 percent this year,” said Fu Chunhan, deputy market department manager of Zhejiang China Commodities City Group Ltd, operator of the Yiwu markets. “Foreign traders are more cautious, and most favor short-term orders.” 

The Yiwu small commodities index dropped 0.8 percent in the first three weeks of May to 103.94. It was 108.02 at the start of 2011. 

Yiwu merchants like Liu are scrambling to shift their focus to domestic buyers. 

“The domestic market now gives us better profits than the foreign market,” said Chen Peilang, executive manager of the Zhejiang Rose Umbrella Co, one of the biggest umbrella manufacturers in Zhejiang. 

Rose Umbrella’s domestic sales have risen to 50 percent of revenue from less than 30 percent in 2005. Chen said it hasn’t been easy for foreign-oriented manufacturers to suddenly shift to the domestic market because it takes time to build up brand familiarity. 

“Although Rose has been popular among European and Japan customers, most domestic clients still know only the Tiantang, or Paradise, an umbrella brand in Hangzhou,” he said, referring to the Zhejiang provincial capital. 

Down but not out


Yiwu’s leading trade Agent Yachina is one of the most successful trading companies in Yiwu. “Even though the world economy is yet to fulyl recover, your own effort and dedication to quality service counts the most. ” says Oliver Stone, the company General Manager, who owes his success to American standard service and quality control. Yachina’s total turnover doubled last year despite the dire economy .

Yiwu merchants may be down but they’re not out. To raise the profile of their brands in the domestic market, many have opened online stores.


Ai Shengming, 45, has been one of the more successful. 
 
Ai was losing money until he established an online store for his Mengchi Ornaments Factory in 2010. Clients can now design and build three-dimensional models on his website, with prompts from factory staff. 

“Most other Yiwu ornament companies need to have samples to show to their clients,” Ai said. “But I need only draw models with computer software, which saves on costs.” 

He said he received orders valued at more than 14 million yuan (US$2.21 million) last year from traders in Russia, the United States and Europe. 

That success hasn’t gone unnoticed.


Online store 

More than 70 percent stalls in the Yiwu market opened online stores in the wake of the European debt crisis, said market operator Fu. Broadband access is available to all stalls in the markets. 

“The city now has more than 50,000 online businessmen, with annual volume of 50 billion yuan, almost the same with that of the physical stalls in the market,” Fu said. 

To survive going ahead, Yiwu merchants must develop their own brands and move up the value chain, rather than relying on small profits from selling huge quantities of cheap goods, said Weng Jianping, deputy director of Yiwu’s Bureau of Commerce. 

Neoglory Group, a leading ornaments manufacturer in Yiwu, is a case in point. 

The ornaments maker developed the high-end brands Su and Tofu, which are mainly silver jewelry of such high quality that they were exhibited at the Paris Fashion Week, said Neoglory Ornament general manager Yu Jiangbo. 

The higher-end products and the company’s ties with global retailers like Sweden’s H&M have helped Neoglory remain profitable in these hard economic times, Yu said. 

Neoglory’s ornament production brought in revenue of about 1 billion yuan last year, dwarfing all the other similar manufacturers in the city. 

Neoglory is a typical sort of Yiwu success story – a small, tight-knit family business that grew into a major manufacturer. 

Yu, 27, is the elder son of the group’s president and is poised to take over the family empire some day. Thirty family members operate different sections of the company, and most live on the top floor of the company headquarters. 

Like most first-generation merchants in Yiwu, Yu’s parents began their business in the early 1980s, making handicrafts like embroidered goods and shoes in a small home workshop and selling them to cities across the Yangtze River Delta. 

In 1983, when the Yiwu government built the first market for traveling merchants, Yu’s parents were among the first to set up a stall. 

In 1995, his parents borrowed several million yuan to establish their own factories and began selling ornaments and crystal glass to foreign traders. Today Neoglory Ornament is the largest ornaments maker in Asia, with 5,600 employees and total assets of 250 million yuan. 

“Yiwu was a poor agricultural area, and many farmers were forced to leave the land and try their luck at small workshops,” said Ma Lihong, deputy president of the Party School of the Zhejiang Committee of the Communist Party of China. “The city government developed the markets to serve them, and that’s how the big Yiwu marketplace began.” 

The marketplace prospered along with China’s economy. After the September 11, 2001, terror attacks, Yiwu’s markets became popular with Arab traders who found entry into the US more difficult. 

In 2005, the United Nations and World Bank designated Yiwu as “the world’s biggest wholesale market for small commodities.” 

Yu Jiangbo, general manager of Neoglory Ornament 

Shanghai Daily: What have you achieved during the past decade? 
 
Yu Jiangbo: In 2006, my mother, chairman of the company, recruited many professional managers to try to boost the sales of ornaments, but they all failed. At that time, I had graduated from the Imperial College in London, and my mother gave me a chance to be the general manager. I have managed to develop the company’s own brands, and our ornament sales have dwarfed all the other similar manufacturers in Yiwu. 

SD: What’s the biggest mistake most businesses in your area make in looking at the future? 

Yu: Most local companies do everything by themselves – from design and manufacturing, to marketing and sales. In the ornament industry, I think they should outsource the manufacturing to save labor costs and concentrate on design and marketing. My company did so beginning last year and has cut costs by 40 percent. 

SD: What would you most like to see in China’s development planning? 

Yu: The appreciation of the yuan in recent years has added pressure to the export of local ornament makers. I hope the government can do something, like export tax refunds, to relieve the pressure. 

SD: What’s your biggest concern? 

Yu: I am afraid the impact from the economic slowdown in Europe and the US is just at the beginning and may continue for a long period. 

Located in the middle of Zhejiang Province, Yiwu is more than 300 kilometers from Shanghai. 

Besides its famous wholesale markets, its economic base rests on industries such as knit hosiery, fashion jewelry and clothing accessories. It has also come to be called “sock town” because it makes more than 3 billion pairs of socks for Wal-Mart and other foreign buyers. 

In 2011, the city had industrial output of 141.1 billion yuan (US$22.4 billion), up 21 percent from a year earlier. The city has the biggest service sector in Zhejiang Province. 

Yiwu, founded in about 222 BC, also has a rich cultural heritage that includes traditional Chinese paintings and calligraphy, kung fu and folk arts. 

1,105 

square kilometers 

1.4m 

registered population 

6 towns 

How to get there: 

Take a train from Shanghai Hongqiao Raiway Station to Yiwu. The No. 803 bus is needed to the Nanfanglian Station before having the Bus No.311/312/313 to the town. 

A drive along the G92 Expressway takes about 3.5 hours.

Experts and Professors Shake Hands with Enterprises in Dachen Town_News_China Yiwu

Recently, the Bureau of Science and Technology organized an activity of “Shaking Hands” for the second time in 2012 between 15 experts and professors from the science research institutes and colleges like Yiwu Virtual Research Institute and Shenyang Institute of Automation Chinese Academy of Sciences Yiwu Center and the preventatives from 15 agricultural and industrial enterprises in Dachen Town.The economic development of Dachen Town started early. However, because of its single industrial economic structure, it needs upgrade and adjustment of industrial structure urgently. The most of the agricultural business are still in the basic form of cooperation between peasant households, and the condition of effective scale operation has not formed.Liu Jintu, the director of the Bureau of Science and Technology said: “at present, there are some projects cooperated by the agricultural and industrial enterprises and the science research institutes and colleges, but the full popularization of science and technology and then the transformation and upgrading of industrial economy still need many enterprises especially the outstanding representatives in each industries to set an example.” All of the institutions and colleges that participated in the virtual research center have strong scientific research strength, and the experts and professors of virtual research center are considered to be the best in each filed. This activity of “Shaking Hands” between professors and enterprises will make positive influence in improving Enterprise-University-Research Institute Cooperation and promoting the promoting the transformation of science &technology achievements.During this activity, the experts made investigations in the enterprises, communicated with the representatives of the enterprises, made analysis and guidance about the technological difficulties that the enterprises were facing, and proposed many constructive advices in the aspects of enterprise brand building and rational allocation of production procedures, which have laid the foundation of deeper Enterprise-University cooperation. Ji Shenlai     Zhang Chenlu

 

Yiwu enjoys sound momentum in seamless underwear production_Global Intimate Wear-Global Intimate Wear

Yiwu of Zhejiang, one of the biggest production bases of seamless underwear in China, has more than 70 enterprises involved in this kind of business.

Yiwu of Zhejiang, one of the biggest production bases of seamless underwear in China, has more than 70 enterprises involved in this kind of business.

In order to do the surveillance on the export of seamless underwear enterprises in the jurisdiction well, Yiwu Office of Zhejiang Branch, CCIQ has actively proceeded with the daily surveillance. The detail work are to help the enterprises better manage and monitor the running, to do the sampling inspection of raw materials and sewing products, to do safety control of the product quality source and the key links, to provide technology support, to help the enterprises avoid trade risks, accomplishing the good momentum of the export of seamless underwear.

According to the statistics, Yiwu Office of Zhejiang Branch, CCIQ had finished 992 export inspections of Seamless Knitting Apparel from 56 different enterprises, valued USD $ 44,826,000 by Feb 17 th, 2012.