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Internet startups new chance for jobless
(China Daily)
Updated: 2004-05-25 22:27

The Internet is evolving into a new platform for job hunters, including both laid-off people in mid-life and 20-somethings hoping to start new businesses in Shanghai.

Yang, a 48-year-old former railway worker, had tried to open a small business before she became an online shopkeeper, which she had never expected to try.

Over the past three years, Yang struggled in a line of petty trades, which cost her about 5,000 yuan (US$602.4) a month for store rental and charges on water and power supply and earned meager profits.

Yang began to run a "virtual" online store last year with an investment of a mere 100 yuan (US$12.05). The business has scored a monthly sales income of several thousand yuan. Yang is planning to expand the business from daily necessities to toys and jewelry.

Besides Yang, more than 1,000 people have started online businesses as full-time career in Shanghai since a campaign last July kicked off by the local labour and social security authorities and the municipal e-commerce trade union to improve employment through Internet services.

The online business operators trade cosmetics, clothing, headwear and footwear, digital cameras, cell phones, computers, audio-visual products and books.

Under the effort, another 3,000 citizens have benefited from related training for online business startups.

The trade union said that in 2003, e-commerce in Shanghai nearly doubled the year-earlier value to reach 50.4 billion yuan (US$6.07 billion), with virtual stores and online-franchised businesses becoming a fashion.

Eachnet, a well-established e-commerce website in Shanghai, alone registered more than 1,500 startups each with a full-time online store operator, and jobs offered by the virtual stores have numbered more than 5,000, according to the trade union.

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 public relation manager with Eachnet, an online store operator, is able to realize a monthly transaction volume of 20,000 to 30,000 yuan (US$2,409 to US$3,614) and a profitability of 50 per cent on average.

Meanwhile, another Shanghai-based e-commerce service provider specializing 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 150,000 yuan (US$18,072) in monthly business turnover from the franchised electronics operation.

Dubbed grassroots e-commerce, online business startups have not only won favour among the middle-aged unemployed but 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 10,000 yuan (US$1,204).

Low startup costs were 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 of what it does to start a conventional small business, such as a purified water shop or 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 programme, 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 startup campaign will help offer 10,000 jobs by the end of this year.

To achieve the goal, it is necessary to remove some regulatory barriers for the campaign, according to Zhou Weimin.

He cited an absence of e-commerce regulations, which is a hindrance to the massive expansion of e-commerce. Without such rules, it is difficult to certify the legitimacy of an online transaction, Zhou said.

The management cost is another obstacle to prevent e-commerce from swelling, said an e-commerce company official, complaining about the low quality of some business operators. Currently, most of the operators are laid-off or retired "uncles" and "aunts", who are not well educated. 

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