By  on March 9, 2014

JIEYANG, China — Only two years ago, Junpu village was like somany other thousands of near-abandoned small hamlets across the vaststretches of rural China.

With farming no longer a viableprofession for most young people, the vast majority of villagers lessthan 50 years old left home to find work in factories and larger citiesacross Guangdong province. The village’s own factories, mostly smallworkshops making garments and processed food, were foundering under theweight of fewer orders and higher costs.

Among those who left toseek fortune elsewhere was Xu Zhuangbin, now 23. Xu struck out fromJunpu for the southern metropolis of Guangzhou, about three hours away.He worked at a few different jobs and quickly found a lucrative nicherunning an online store on the e-commerce giant Taobao. Xu’s shopspecialized in men’s clothes, which he sourced from among the thousandsof garment and apparel factories that overwhelm this region of China.

Thoughhe was making big profits with his thriving online shop, Xu never feltquite right in Guangzhou. Inspired by the idea of Internet-drivenmobility and taking his job home, Xu moved back to Junpu village andopened his Taobao shop there, bringing with it his clothing factoryconnections and distribution channels he had worked so hard toaccumulate.

“I never felt at home in Guangzhou,” said Xu, sittingin the office of his massive warehouse complex in the village. “Iwanted to be with my family.”

Within a few months, it becameapparent to other village families that Xu was onto something. Hisbusiness was a gold mine, drawing tens of thousands of dollars in salesevery week. After six months running his Taobao shop from the village,Xu had managed to pay off the deep debt his father accumulated when thefamily factory failed, and he bought his own car.

The idea tookoff like lightning, and soon the local government became involved. Thegovernment invested in new, village-wide high-speed Internetconnections, gave tax breaks to new online retailers starting up andstarted a preferential loan program.

The result? What might be a model for a new phase of low-impact, big-profit business in rural China: a “Taobao village.”

Junpuis one of more than 20 towns the massive Alibaba Group-owned e-commerceplatform has tagged “Taobao villages” across China. To get the label, avillage must have more than 10 percent of their residents working ine-commerce, drawing at least 1.65 million yuan, or about $270,000, insales annually, according to the company.

Taobao says there arenow one million online shops operating from rural China, double thenumber of 2012. The highest-volume villages are located across sevenprovinces and all vary a bit depending on their products and market. InJunpu, clothing is the item of choice. Junpu Taobao sellers buy productsfrom the nearby factories tailored to their customers’ tastes then shipthem throughout China at express speed, cashing in on a fast-growingwave of consumerism.

Shops here specialize in products bycategory. Along the main road through the village, Taobao shops rangefrom denim stores to clothes for twentysomethings to baby clothes andblankets.

Junpu is not a typical Taobao village, in severalrespects. Elsewhere in rural China, far away from the country’s factoryzones, e-commerce clusters have tended to spring up around sellinglocally made handicrafts. But because Junpu is a former factory town inChina’s textile- and apparel-manufacturing region, it has been a naturalfit for its entrepreneurs to sell clothes made in the vast workshops ofGuangzhou and Dongguan.

The result of access to big, higher-endinventory has been big-volume sales and a village boom. Today, Junpugovernment officials estimate that 55 percent of the village’s 2,700people work with or own Taobao shops.

Xu, who started the trend,has not been surprised by its popularity or that his friends havereturned to Junpu to start Taobao shops.

“Most of the young people wanted to come back,” he said. “Now most have come back.”

However, he added, “I was surprised at how the government supported the idea.”

Villagechief Zhen Hongguang said government officials were eager to come upwith ideas to encourage more people like Xu to open shops at home.

“Wewere losing our young people, our best people,” said Zhen. “It’s alwaysbeen the government’s job to help create employment.”

Thegovernment support is apparent from the first glimpse of Junpu. A largearch across the entrance to the village heralds the e-commerce economy.The newly paved main road is flanked with banners and signs extollingthe benefits of online retailing. Local officials have even funded aschool to teach prospective Taobao shop owners about online sales andcustomer service.

For Xu and others on the cutting edge of ruralretail, the next step is moving up the value chain. Xu, who now has 15employees to process orders and handle logistics, is working on creatinghis own label.

“We’ve worked really hard and there is still a lot of opportunity here,” he said.

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