The rise, fall and reemergence of 'hometown of carpets'

Six of every 10 carpets now sold online in China are produced within the 100-square-kilometer area of Cuihuangkou town in Tianjin's Wuqing district.

Six years ago, though, that figure was practically zero, according to a report by Tianjin Radio.

Cuihuangkou's history of carpet production dates back to as early as 1894, when it made carpets for the imperial family during the Qing Dynasty (1644-1911). Touted as China's "hometown of carpets", it has endured hard times over the past century.

In the 1980s, Cuihuangkou carpets were often given as gifts to foreign leaders, and at its peak in the mid-1990s, the town produced half of the country's carpet exports.

Business slumped in the mid-2010s. Domestic sales fell by 70 percent compared to the mid-1990s, mostly as a result of the e-commerce boom.

That year, Liu Mingjun, a then 23-year-old overseas-educated Cuihuangkou native and daughter of a former factory head, set out to change the fate of the town.

However, her journey to put Cuihuangkou on the road to e-commerce was bumpy.

In 2015, as vice-general manager of Kaili Carpet Factory, Liu set up an online website, etancheng.com, which translates as "selling carpets online honestly".

"I hoped it could become the country's first e-commerce carpet portal to operate on computers and mobile phones, much like WeChat," she said.

However, the site drew few visitors during its first year.

"The following year, I tried to sell through existing e-commerce platforms. I opened flagship shops on six major portals, including Tmall, Taobao and JD."

That proved to be even less successful. There were similar competitors everywhere.

"Many shops copied our methods and designs," Liu said.

In 2019, after spending a great deal of money on an online sales course in southern China, Liu restructured etancheng, hiring a renowned livestreaming host and testing out a "zero inventory" sales method, by which carpets were produced according to livestream demand and then delivered to buyers.

Ten carpet producers in the town joined forces with her, and during peak sales, the site drew up to 20 million visitors per month, which in one month led to the sale of 250,000 carpets.

Last year, online sales of etancheng products on various portals hit 40 million yuan ($6.2 million).

"In fact, we didn't dare open an online shop because we were afraid of minimal returns and too much competition. The collaboration with Liu has been successful because production is tied to demand from the livestream sales," said Jiao Lei, general manager of Enshengda Carpet.

When it comes to the overseas market, Bai Hongwei, who is another vice-general manager of Kaili, said the sales model is being restructured compared to the 1990s.

The novel coronavirus has posed challenges for the company, Bai said.

"The pandemic has increased delivery costs significantly," he said.

Currently, the town's companies are seeking ways of designing carpets that can be more easily folded. The goal is to be able to pack them more tightly, which could result in delivery costs being slashed in half.

Last year, Kaili's total online and offline exports exceeded 70 million yuan. This year the figure is expected to rise to 100 million yuan.

Today, the town has more than 1,200 carpet enterprises with total assets of 1.95 billion yuan and employs about 25,000 people.

From small township enterprises to large foreign trade factories and online shops, Liu's business model has constantly changed and adapted to market trends, and the development of etancheng reflects wider changes in Cuihuangkou.

"We are committed to upgrading and transforming workshop-style carpet making, riding the tide of e-commerce and scaling business up," said Cao Shiquan, the Party secretary of Cuihuangkou.