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September 19, 2014

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Seeking success in the e-commerce world

By Zhang Zhongkai | September 19, 2014, Friday | Print Edition

LIKE many Chinese who have lived through difficult times, Zhang Xiaoqing longs for a life of abundance.

For the 26-year-old office worker in tropical Hainan Province, this means pursuing her childhood dream of opening a fruit shop — a dream she has realized with the help of China’s booming e-commerce industry.

Earlier this year, Zhang registered her store on WeChat, China’s most popular mobile messaging app, and began selling mango, jackfruit and other tropical fruits.

She is just one of the millions of ordinary people getting a taste of entrepreneurship thanks to access granted by e-commerce platforms.

Like Zhang, many joining the rush start businesses selling simple goods ranging like local delicacies and handmade accessories. Others are offering more sophisticated procurement and consulting services.

During a speech at the Summer Davos opening ceremony last week, Premier Li Keqiang highlighted the importance of innovation and called for entrepreneurship at the grassroots level to energize the market and fuel economic growth.

“Just imagine how big a force it could be when the 800 or 900 million laborers among the 1.3 billion population are engaged in entrepreneurship, innovation and creation,” Li said.

And the Internet is helping turn that vision into reality.

Business for everyone

It only took Zhang five minutes to apply for her storefront on WeChat using a third-party app, which enables users to set up their business account at no cost and easily promote it by posting the link on one’s own WeChat account.

Koudaitong, one of the third-party apps, reported a surge from 3,000 users in March to over 10,000 by the end of August. Weidian, a similar app, has roughly one million users now.

WeChat reported more than 400 million active users by the end of August, and official accounts on it neared six million, with the majority of them registering for official WeChat shops.

“It’s idiot-proof with simple steps. You only have to work hard on promotion and service,” Zhang says.

Another Internet giant, Baidu, is also strategically stepping up the development of e-commerce services. The country’s largest search engine rolled out a new platform, Zhidahao, literally translating as one-stop service, helping merchants offer packaged services to customers attracted by mobile searching.

Meanwhile, Jack Ma, founder and chairman of China’s largest e-commerce player Alibaba Group, said he’s proud to be helping entrepreneurs in a promotion video leading up to the company’s anticipated IPO in New York.

“We fight for the little guy, the small business men and women and their customers,” he said. “Our role is simple, through our ecosystem, we help merchants and customers find each other and conduct business on their terms and in ways that best serve their unique needs.

“I’m proud that we ignite innovation, create jobs, benefit customers and help entrepreneurs fulfill their dreams.”

Unsatisfactory experiences

Easier access opening a store does not necessarily mean a quality service and profitable business, as the e-commerce ecosystem has yet to deal with emerging players and problems.

Complaints over unsatisfactory e-commerce experiences reached over 50,000 in the first half of 2014, up more than 21 percent compared with the same period last year, according to China E-Commerce Research Center (CECRC).

The growth in complaint cases reveals ongoing problems with fake products, deceptive promotions and account safety, among other issues.

The lack of proper supervision, difficulty regulating virtual shops and an underdeveloped credit business give rise to customer complaints, says Yao Jianfang, an analyst with CECRC.

One-person operations like Zhang’s are also finding it difficult to survive with high promotional fees, financing difficulty and policy obstacles leaving many small e-commerce vendors in the red, according to an Economic Information Daily report.

“I put my stores on all major e-commerce platforms, but almost all my profits have been invested in online and mobile promotions, which is crucial to sales. We are caught in a dilemma,” an e-commerce vendor surnamed Wang said in the article.

In another case, a businessman failed to get proper permits with the postal department to operate his service.

Jiang Qiping, secretary-general of the information research center of the Chinese Academy of Social Sciences, said it would take time to set rules in the e-commerce sector.

“The traditional supervision system, management approach and industrial order are challenged by the surge of new business types and players, and it takes all shareholders to set fair game rules and cultivate an inclusive industrial chain,” said Jiang.

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