It is hard to imagine: A small city in the middle of Zhejiang Province produces more than a quarter of the world's beverage straws and nearly 70 percent of Christmas ornaments globally.

The city, named Yiwu, has been crowned "a shopping paradise for small commodities" by foreign traders around the world, not only due to the rich variety of goods offered, but also to low prices.

But Zhou Xiaoguang wants to improve on that impression, at least in her own business.

"Like most business people in Yiwu, I used to focus on how to attain a greater volume in sales," says Zhou, founder and chairwoman of Neoglory Group, which has China's largest production capacity for costume jewelry.

"But now I care more about how to build Neoglory into a well-known, lasting brand," says Zhou, who has been dubbed "queen of costume jewelry" by her counterparts.

Neoglory produces more than 300,000 kinds of products annually, ranging from necklaces to bracelets, from brooches to cellphone chains. About 40 percent of her products are exported.

With total assets of over 1.2 billion yuan, Zhou before relied on wholesale channels. But last year she began preparations for a network of Neoglory boutiques around China. She plans to open at least 1,000 within the next three years, turning Neoglory from "a hidden champion" into a familiar brand among costume jewelry lovers.

Zhou's ambition could reflect the way Yiwu manufacturers can begin a second-phase of entrepreneurial growth after making fortunes by relying on quick returns at a small profit.

"A businessman only thinks about how to land a successful deal and make quick profit, but an entrepreneur cares more about building a long-lasting brand," Zhou says.

Many sales agents for Neoglory have applied to become members of the boutique chain, but she appears to be cautious.

"Building our own network of boutiques is a strategic move. It is not just changing the design of shops according to a uniform style. It is also about improved management systems, better services and new training programs for employees," Zhou says.

"It is a challenge, but I am not afraid of it," says Zhou, who calls herself a "farmer-turned-entrepreneur."

Every year she spends at least two months attending programs at business schools. She also spends about 5 million yuan a year training her employees.

Last year she started an MBA course at the company by inviting professors from Zhejiang University teach classes tailored to Neoglory's needs. To encourage her managers to take the opportunity seriously, she asks each of them to pay 2,000 yuan at the beginning of the course. Whether the money is returned depends on their performance in the class.

Rags to riches

Zhou's career tracks China's reforms and process of opening up to the wider world.

The eldest of seven children from a poor family, she left her village in 1978 at the age of 17 to hawk embroidery samples, hoops and needles.

Although she now frequently flies around the world, learning the latest trends in the industry, she still remembers her excitement as she boarded a train in Yiwu for the first time after a six-hour trek through the mountains. The young traveling vendor journeyed through almost half of China over the following six years.

Zhou settled down in Yiwu in 1985 after getting married. The couple bought a booth in a small commodity market and decided to sell fashion jewelry.

During her days of traveling around, Zhou found that many ladies like colorful accessories such as hairpins. She was confident that her identity as a female boss could add value to the effort.

Her business was well timed in early 1980s, when Chinese women started to seek individual fashions after taking off their utilitarian dark blue military-style suits.

Zhou and her husband opened their own factory with about 7 million yuan in 1995 when their suppliers failed to meet their huge demand on time.

She spent more than 1.5 million yuan hiring experienced employees, including 450 professional workers who had been employed at factories in Guangdong Province.

Now second to Zhejiang, the southern province was before the leading jewelry production base in China and a trendsetter in fashion. She also opened a subsidiary in Guangzhou to catch the latest trends, and then produced the most fashionable of the products within three days. After a few years she had a strong foothold in the industry.

Zhou had her own headaches when her company started to travel in the fast lane. Her products were copied and some experienced employees jumped to other firms or started their own businesses.

But gradually she started to look it from a positive perspective.

An industrial cluster was created in Yiwu and the city has replaced Guangdong as China's largest fashion jewelry manufacturing base and wholesale center. Home to more than 2,000 companies, Yiwu with Zhou and her counterparts is responsible for 80 percent of domestic production and 70 percent of China's fashion jewelry exports.

"Foreign traders come here because Yiwu is the industry center. So Neoglory is also a beneficiary," says Zhou, who is also president of Zhejiang's fashion jewelry industry association.

She also strengthened her design capabilities through a research and development (R&D) team of 380 people designing at least 150 types of jewelry every day. She even established a R&D center for new materials with Zhejiang University, the first program of its kind in China's costume jewelry industry.

Zhou is still a traditional woman. Although the nuclear family is common in China, she still lives in a big house with other 20 family members, including her mother and her siblings. Other than one sister working at Neoglory, her other relatives work in foreign trade.

"They give me lots of support. For example, my two sons still enjoy the warmth of a family, although my husband and I are too busy," Zhou says.

(China Daily 04/09/2007 page12)