E-commerce is new gold rush for entrepreneurs

Booming e-commerce in China is persuading more people to give up their jobs and seek their fortunes in the sector.

Once an admirer of business legend Jack Ma, founder of Alibaba Group Holding Ltd, Huang Chongjun, 40, is trying to challenge Ma's e-commerce empire with a disruptive business model.

If you are a college student, a new worker or just someone who wants to make a bit of extra money during your spare time, then you are a target of Huang and his trade matchmaking platform called okwei.com (literally, micro-shop).

Huang aims to motivate hundreds of millions of netizens in China to sell via social networks like WeChat, QQ zone, micro blogs or to just peddle products to friends and acquaintances. When a deal is made, they get a commission from the suppliers registered with Okwei.

Okwei.com connects the parties in return for commissions and annual membership charges to suppliers of 3,600 yuan ($580) for a three-year period.

"We are turning ordinary people into distributors. Suppliers do not need to spend on ads, like they do on Taobao. Every penny they spend on commissions actually helps them sell products," he added.

It is widely known that the core profit of Alibaba comes from ads. Merchants have to pay a lot to attract traffic so as to maintain turnover. Store operators do not pay to sell products on Taobao. Instead, they pay for ads and other services that make them stand out from the crowd.

"What I am doing now will free them from the pressure of advertisement costs," Huang said.

For their part, netizens can easily open a micro-shop online without investing capital or building up inventories. What they do is to send the buying link to a consumer. When the consumer pays, the micro-shop owner gets a commission.

"I know many successful shop owners on Taobao, and they spend 60 to 70 percent of their annual turnover on advertisements. What is more, it is hard to expand the Taobao store turnover to more than 100 million yuan, no matter how well you are doing, because you are selling things by yourself," he added.

However, as "we media" thrives, every individual can easily promote products via social media, which will sweep the traditional e-commerce landscape. By using the netizens and their networks, a supplier can set up a large distribution network.

Huang is facing more competitors now.

China's second-largest e-commerce platform, JD.com, and biggest social media operator Tencent Holdings Ltd have invested in similar platforms. And there are about 60 similar matchmaking platforms now in China.

The logic is consistent－turning the traffic in social media network into buying power.

However, it will take time to see if they can shake the empire of Alibaba. It saw daily turnover surpass 57 billion yuan during the annual Singles' Day promotion on Nov 11.

Okwei's daily turnover is around 1 million yuan. In a statement, JD's Paipai said its daily turnover peaks at about 60 million yuan.