Unemployed Chinese use internet to start businesses

Himalayan News Service

Shanghai, May 26:

The Internet is evolving into a new platform for job hunters, including both middle-aged laid-off people and 20-plus somethings, to start a new business in this largest metropolis of east China, Xinhua reports. Yang, a 48-year-old former railway worker, had tried to do some small business before she became an online shopkeeper, which she had never expected.

Over the past three years, Yang struggled in a line of petty trades, which monthly cost her about $602 each for store rental and charges on water and power supply and earned her meagre profits. she began to run a virtual store online last year. Starting with a investment of just $12, the online business has scored a monthly sales income of several thousand yuan.

Yang is planning to expand the business from daily necessities to toys and jewellery. Besides Yang, more than 1,000 people have started an online business as a full-time career in Shanghai, since a campaign in July 2003 kicked off jointly by the local labour and social security authorities and the municipal e-commerce trade union to improve employment through Internet service.

The online business operators trade cosmetics, clothing, headwear and footwear, digital cameras, cell phones, computers, audio-visual products and books. Under the campaign, which is part of Shanghai’s re-employment programme, another 3,000 citizens have benefited from related training for online business start-ups. The trade union said that in 2003, e-commerce in Shanghai nearly doubled the year-earlier value to reach $6.07 billion,

with virtual stores and online franchised business becoming a fashion. Eachnet, a well-established e-commerce website in Shanghai, alone registered more than 1,500 start-ups each with a full-time online store operator, and jobs offered by the virtual stores have numbered over 5,000.

Including those with part-time operators, the number of online shops that started last year through Eachnet exceeded 50,000, according to the e-commerce trade union. According to Tang Lei, a PR manager with Eachnet, a successful online store operator is able to achieve a monthly transaction volume of $2,409 to $3,614 and a profitability of 50 per cent on average.

Meanwhile, another Shanghai-based e-commerce service provider specialising in electronics opened 30-plus online franchised stores over the past year, with another 100 applicants for starting up such franchised business.

Zhao, a 50-year-old retiree from a local textile factory, raked in as much as $18,072 in monthly business turnover from the franchised electronics operation. Dubbed grassroots e-commerce, online business startup has not only won favour among the middle-aged unemployed but also among college graduates. Xu, who was a Chinese language and literature major at the prestigious Fudan University in Shanghai, has opened an online store to trade cosmetics and scored a monthly business volume of more than $1,204. Low start-up cost was one of the decisive factors behind the upward trend of grassroots e-commerce, said Yi Yong, head of the local e-commerce trade union.

In rough calculation, to start an online store costs about one tenth as it does to start a conventional small business, such as a purified water shop and a launderette. The 100 e-commerce enterprises incorporated in Shanghai are now encouraged to set aside part of their jobs for people trained by the municipal e-commerce trade union, and those offering such jobs will enjoy favourable treatment from the municipal reemployment program, said Zhou Weidong, head of the Shanghai commission for building an IT-based society. Shanghai plans to provide 500,000 jobs for the laid-off every year. The online business start-up campaign will help offer 10,000 jobs by the end of this year.