Transcripts For KCSM Asia Insight 20151231 : vimarsana.com

KCSM Asia Insight December 31, 2015

Sales hit 1. 5 billion in 12 minutes. And over 14 billion by the days end. Chinas in the midst of a massive web shopping boom. 2013 saw the country surpass the u. S. In Online Transactions with a total of some 300 billion. Many of the products sold online in china come from 212 east shopping villages spread across nine rural provinces and one metropolitan area. From car parts to shoes, Childrens Clothing and toys, each community has a particular specialty. One such town is dongfeng in a northern province. Until several years ago it was a poor Farming Community where the only other employment came from a plastic processing plant. But today the local economy is based around making and selling furniture. Its a change thats been a huge success. Up around 5,000 residents, some 70 are involved in web retail. Between them they run over 2,000 online stores. Each day the town dispatches all kinds of furniture the length and breadth of china. The town enjoys annual sales of almost 160 million. In this episode of asia insight we explore a town devoted to Online Shopping. Dongfeng is one of chinas top eshopping villages. And this towns rebirth is primarily down to the work of one man. 33yearold sun han. Sun runs a company that designs and makes Home Furniture which is sold exclusively through the firms own online shop. Each morning when he arrivals at the office, he checks the previous days sales. Around 80,000 yuan yesterday. Thats down 10,000. But we do have 800 orders. Suns company has an annual turnover of 40 million yuan, over 6 million. Most items on offer are made in the factory next to his office. This 3,000 square meter space contains the latest woodworking machinery. Most of suns 32 staff, including a number of relatives, are residents of dongfengs. Translator now were making shelves, desks and coffee tables. The furniture is made by red pine, imported from russia. Although the goods are designed for home assembly, a screwdriver and the manual are all that the buyers require. Translator here we go. Thats our brand name. It means elegant, beautiful, and comfortable. Reporter heres what the firms website looks like. Most of the 170 or so items currently listed are solid with a gross mar gyp of only around 15 . Translator our main target customers are College Students in rented accommodation. People with lower incomes and middleclass consumers. Our productions are cheaply priced and very practical and userfriendly. The low prices are why we aim to make a profit on bulk rather than on individual sales. Reporter as for the firms bestseller . This fiveshelf bookcase. At just nip each, 9,000 units are sold every month. But despite the low price, Customer Satisfaction is high. 95 . Sold every month. But despite the low price, Customer Satisfaction is high. 95 . Translator its the cheapest bookcase on the chinese market. In truth we make no money on it. But it raises our brands profile. And as a result it helps to stimulate the sales of our other products. Reporter the strategy has been a huge success. Many other items have won fivestar reviews and are selling fast. All this has made suns name in chinese net shopping circles. His phone rings constantly with business queries from strangers. Translator the red text is the calls i couldnt answer. It rings at least 100 times a day. Its a real headache. Reporter father sun deqiang worked in the local coop while his mother spent time working the fields. Sun was born in 1982. In 2001, he enrolled at a university in nanjing to study tourism. Economic reforms and an opendoor policy had made china the worlds factory. The success brought a boom in domestic travel. Translator at the time i had just dreamed of finding a wellpaid job when i graduated. And maybe even a girlfriend. Reporter but sun soon lost interest in studying and dropped out of college. He made a living through parttime work in delivery and security in nanjing and shanghai. Temp work at a mobile phone company also proved shortlived. Finally in 2006, he returned home to dongfeng. Translator when i quit work to come home, my parents werent happy. They wanted me to go back and find a job in the city. But rather than work for a company, i wanted to do something myself. Reporter he borrowed money from his parents to buy a computer. The internet was beginning to take off in china and sun decided to try and start an Online Business. The following year he returned to shanghai to scope out potential business ideas. On the trip he came across a wellknown swedish purpose tour store. Furniture store. When i went inside the furniture was cheap for the perfect aesthetic for the generation born in the 80s. From a personal standpoint i love the atmosphere. What made an especially big impression on me was the low prices. And the stylish designs. So i went back to the countryside and read up on furniture. Its such a broad industry. But i thought that if i could offer bargain prices online i could make a decent business of it. Reporter back in the village, sun designed a small set of shelves and commissioned a batch of 20 from a local car pep tear. He put them online and they sold out in two days bringing in 230. Translator i was really pleased. We made 30 yuan on each sale. And we sold 20 of them. 600 yuan in two days. Reporter that was more than a typical monthly salary in the town. Sun went on to boost production, broadening his range to include bookcases and shoe storage. In 2008 he and his wife registered their company. After Much Research into the designs and prices offered by other estores they decided to focus on low prices. Revenue for the first fiscal year came to 140,000. Initially few locals were interested in suns online shop. But as friends and neighbors gradually spread word of his success story, others nearby began to copy his business model. Some even came to the town from further afield to start similar companies. Translator im from chongqi chongqing. I came here because there are opportunities for entrepreneurs. Reporter wen was a manager at a construction firm. While working at a subsidiary in a nearby town he met his wife who happened to be from dongfeng. Hearing of suns success he came here to set up his own business in late 2008. Translator we make oldfashioned tea tables. Everything is made and assembled here in the factory. And then sent to our customers. Our tables are a convenient folding design. Reporter all of wens tables are made from natural pine. After initially making a range of products, he decided to specialize to set his business apart. Popular with tea aficionados, these 100 tables bring in annual revenues of almost 1 million. Translator in chongqing i was just a hired hand. I sidecided to come here becausi wanted to prioritize my personal values. This Online Business has totally changed my life. Now i own my own small business. Im not just an employee. Its been a major step forward. You might even say a success. Reporter once dongfeng had an annual exodus of some 1,500 workers. Few young people saw any future here. Leaving to find work, most didnt come back. But as online shops have taken off, these locals have begun to return. By late 2008, dongfeng had around 200 such businesses. In 2009, chinas Biggest Online retailer named the town on its inaugural list of the countrys top three eshopping villages. And the local government is actively promoting the idea of Online Shopping businesses in dongfeng. The streets here were once narrow dirt tracks. Today there are twolane, sixmeterwide asphalt roads. Offices line both sides of the street which has earned the name internet shop boulevard. And for the best possible internet connection, the whole town has installed highspeed fiberoptic cables. Lowinterest lopes a loans are offered in partnership with banks and local land. Each year dongfeng sees over 300 visits by observers all over china curious to know how an impoverished rural town has achieved such rapid development. These guests have even included executives from the countrys central government. The amazing rise in Online Furniture shopping has also brought growth in other sectors. Lumber stores and delivery firms have steadily popped up, further boosting the local job market. Theres been a rise too in young people moving in to set up their own companies. This photo studio specializes in product pictures. Jao yuan used to work in animation. His colleague chen xue was a wedding photographer. Both come from a nearby town. Anticipating continued expansion of the towns online sector, they opened this studio three months ago. Translator we average two requests a day with 600 in three months. Translator its not where you are that matters but whether you can put your skills to use. We can do that in dongfeng. We want to become the biggest and best business in town. Thats the goal. Reporter at 4 00 p. M. Each day, trucks and pickup trooiks flood dongfengs main road. There are ten times more internet companies. Their goods are shipped nationwide. The towns online pioneer sun han. Though his company has grown, suns family still plays a key role. Wife zhang wei handles the accounts. His mother manages the factory and staff, running stringent quality checks. While his father helps shift stock. Translator i cant do all that much. But i like to try and help out where i can. Reporter suns company doesnt ship products directly. Three times a week specially commissioned trucks carry stock to Distribution Centers in eight major cities. Those items can then be sent to customers as soon as an order is received. 8 00 p. M. And fully loaded trucks hit the road for the tenhour journey to beijing where the goods will await orders from customers in the capital. Sun and zhneg live around 30 minutes drive from dongfeng in this spacious apartment. The couple is joined by their two young daughters. Because body parents are business every day working from morning to night the family usual orders takeout for dinner. Translator he deals with clients until late at night. If he thinks something will be a hit, hell pursue it. Even if everyone else disagrees. Reporter like some 10 of chinas eshops villages dongfeng focuses almost entirely on furniture. Topselling products are often quickly copied. China has patent laws to protect the technology, spec, and design of a wide variety of products. Even furniture can be patented by applying to the state intellectual property office. With a patent, its possible to stop other stores from selling copies, to demand royalties, or stop sales altogether. Problems arising from this system have become a regular owe currence in dongfeng. Sun gets an urgent phone call from a friend who owns his own online store. Another company has filed a patent claim against his computer tables. Translator my friend launched the item but someone from guandong beat him to the patent. So the product got taken off my friends site. Now he has lots of stock that hes not allowed to sell. I told him all he can do is talk with the patents owner. Talk it out and see if they can come to terms. Reporter because there are only so many variations to be found on the design of furniture, such as tables, word robes, and shelves, such patent disputes are getting worse every year. This forces locals to find new ways to cope. Sun himself is struggling to find unique ideas for new products. Translator 10 to 20. There are just so many online shops nowadays. The market is swamped. I have to make my products stand out among all of those copies. So i constantly need to offer new and better products. Reporter although sun has no formal background in designs, he regularly stays up until the early hours, honing product ideas on his computer. During working hours, sun tries to make time to visit other local firms to discuss various topics. As the leader in the Online Business industry, many residents rely on him. Reporter eight years after sun founded his business his main hope nowadays is to grow in tandem with his contemporaries. Translator i want to grow our sales to at least 100 million yuan. I believe that as the companies here in dongfeng get bigger well even see some become public listed. I really think that eventually well have some internationally famous names. Reporter despite various problems, chinas ecommerce sector continues to expand. Today in a holt about 30 minutes drive from dongfeng the main event space is hosting a business seminar on how to run an online shop. 400 people from nearby towns and villages are taking part. The seminar is run by a firm founded five years ago to support Online Business owners. Local and provincial governments are also involved. Todays seminar is free. But the firm offers more detailed instruction on a course that costs around 5,000. With more and more people across china drawn to the idea of setting up their own online stores, some hopefuls are prepared to pay such fees. The success of the dongfeng eshopping village all began with one manselling 20 small sets of shelves. Hoping to promote further growth the local government is now planning to designate dongfeng and 16 other villages part of a special Internet Business startup zone. Chinas net commerce sector continues to grow apace. And the country state media predicted the official registration of a further 800 or so eshopping villages by the end of 2015. Steves the dramatic rock of cashel is one of irelands most evocative sites. This was the seat of ancient irish kings for seven centuries. St. Patrick baptized king aengus here in about 450 a. D. In around 1100, an irish king gave cashel to the church, and it grew to become the ecclesiastical capital of all ireland. 800 years ago, this Monastic Community was just a chapel and a round tower standing high on this bluff. It looked out then, as it does today, over the plain of tipperary, called the golden vale because its rich soil makes it irelands best farmland. On this historic rock, you stroll among these ruins in the footsteps of st. Patrick, and wandering through my favorite celtic cross graveyard, i feel the soul of ireland. Hello there, welcome to newsline. Its december 31, new years eve in tokyo. Im Catherine Kobayashi counting down to 2016 with the top stories this hour. Ten member countries launched an Economic Community on thursday which promotes trade liberalization. They signed a declaration in malaysia last month to establish it. A government sponsored event to celebrate the launch of the asean Economic Community was held in the thai capital bangkok. The community has a population of 600 million and gdp of 2. 5

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