From carpet exports to e-commerce, N China town reinvents itself

TIANJIN - Once known for producing carpets, the township of Cuihuangkou in North China's Tianjin municipality has found new economic life as an e-commerce base.

Cuihuangkou is currently home to about 400 carpet companies, which provide jobs for 25,000 people. The town's carpets have been exported to more than 50 countries and regions, accounting for 40 percent of the country's export volume.

"The carpet companies in our town once focused on processing products for export, so their income mainly came from export rebates. Vicious competition among these companies left business even worse," said Cao Shiquan, deputy Party chief of Cuihuangkou Township.

Low additional value, pollution from the dyeing process, and shrinking profits of the carpet industry also hampered the town's economic development, Cao said.

To revitalize the industry, Cuihuangkou Township set up a carpet industrial park in August 2009. However, the park only contributed taxes of 50 million yuan ($7.21 million) in 2011 and couldn't attract enough businesses.

The town faced hard times until June 2012, when Vip.com, a Chinese online discount retailer, decided to set up its north China branch in Cuihuangkou.

Zhou Jianxiang, head of Cuihuangkou Township, said Vip.com's arrival was viewed as a landmark event for the town's development.

The carpet industrial park started to change its focus to e-commerce and formally changed its name to Tianjin Jingjin E-commerce Industrial Park in March 2014. Its main aim is developing e-commerce, Internet technology, and the cultural creative industry.

In 2015, the park paid taxes of more than 1 billion yuan, 20 times the amount in 2011.

The Jingjin E-commerce Industrial Park has attracted more than 1,200 enterprises, including popular e-commerce companies such as JD.com., Vip.com, Ctrip.com, and Qunar.com, creating jobs for 12,000 people.

Thanks to convenient transportation around the park, product delivery time has significantly improved, said Zhang Jianwei, general manager with the Jiuxianwang E-commerce (Tianjin) Co, Ltd, an e-commerce liquor company.

"It used to take two days to deliver goods from our former warehouse in Beijing to Hebei and Shandong provinces, but now delivery time from the industrial park to the two provinces has been shortened to one day," said Zhang.

Hu Chaoyang, Party chief of Cuihuangkou Township and director of the management committee of the Tianjin Jingjin E-commerce Industrial Park, said the town also supports the transformation of the local industry.

An e-commerce carpet company, etancheng.com, was founded in Oct 2015 to help the local carpet industry explore the domestic market via online sales.

"Carpet companies used to focus on the international market. Now, as the living standard of Chinese people has improved, we have started to eye the domestic market and offer customized service as well," said Li Yunlong, operating officer with etanchang.com.

The company's turnover for the first three months surpassed 15 million yuan, while turnover in 2017 is expected to exceed 100 million yuan, Li said.

In addition to the carpet industry, the industrial park will integrate two other traditional local industries -- bicycle and silk flower production -- with e-commerce.

It is expected that the town's GDP will reach 20 billion yuan by the end of China's 13th Five-Year Plan period (2016-2020), five times that of 2015.