Coffee entrepreneur digs for e-commerce gold

KUNMING - Mighty oaks may grow from little acorns, but for Xu Zhengxiong the humble coffee bean sprouts mighty profits.

"My family have grown coffee since I was a child. But I had no interest whatsoever until an old classmate invited me to help with his coffee business in 2010," said Xu.

The subtropical climate of Yunnan province, Southwest China, makes it the perfect location for coffee plantations. The province produces 99 percent of all the coffee grown in China, and its beans are used by most of the world's big coffee brands. Therefore, it is no surprise that entrepreneurs are sniffing out opportunities to cash in on Yunnan's black gold and the government is supporting their endeavors with financial support.

A cup of freshly-ground success

In November 2010, Xu made 100,000 yuan by selling coffee beans he had sourced from farmers to Yunnan Hogood Co Ltd. This deal, with one of the largest suppliers in China, may have lined his pockets, but didn't quench his thirst for business.

After the 2010-2011 coffee season, Xu was counting profits of over 3 million yuan. Although he was a newcomer to the industry and lacked experience, his enthusiasm more than made up for it.

Not content with being a middleman, he opened a coffee primary processing plant in 2012. In the same year, he bought a 5,000-mu (333.3 hectares) coffee production base, which included a 3,060-mu plantation.

His hard work paid off. Xu received an award for entrepreneurship from the provincial governor in November 2013 and, off the back of this, three potential partners approached him, pitching similar e-commerce collaborations.

Xu agreed, and the four partners quickly developed Yunnan Cat4 Coffee Co Ltd, the online arm of the business, from a concept into an established and respected business. Within three months of their store on tmall.com going live in 2014, they had received more than 10,000 orders.

Xu then oversaw the construction of a coffee bean baking factory and an instant coffee plant in Baoshan, and another in Kunming, capital of Yunnan province.

A double shot of development

Hailed as the dark horse of the coffee industry, as he made a success of his business despite lacking experience, Xu's venture has gone from strength to strength, and now covers all stages of the process, from bean to cup, and all in just five years.

After the success of the online coffee store, Xu branched out and opened "experience center" coffee shops.

There are three such cafes in the tourist city of Lijiang and another in his hometown Baoshan. Customers can bake coffee beans or try their hand at being a barista.

While attributing his success to his own passion and drive, Xu said he was grateful for the financial support he received from the government.

"I have invested more than 50 million yuan, about 3 million yuan of which was financial support from the government," Xu said.

He believes more focus should be given to e-commerce in Yunnan, calling on the government to show more farmers how to create an online presence to sell their produce, so that the seeds of success can be scattered across the province.