As e-commerce competitions in cities are fierce, people want to explore the business opportunities in third- and fourth- tier cities in China, or even the rural areas, where users, most being farmer-turned workers, have considerable purchasing power. They use mobile phones, instead of PCs, to get connected.

Here are three well-known cases. The three founders have somethings in common: engineers who know one thing or two about China mobile Internet market.


Founded by a serial entrepreneur, Zhang Xiaowei, in 2006, Maimaibao was one of the first m-commerce entrants and became one of the biggest ones.

Maimaibao serves workers and farmers in counties and villages. To have the real picture of factory life, the company sends employees to work at plants twice a year, one month each time, so that they have detailed information of their everyday life.

This group of users, Zhang concludes in an interview in mid-2012, has low absolute but high relative purchasing power. With much lower income, they, however, don’t worry about unemployment as manufacturing industry lacks workers, don’t have to pay the mortgage city residents have to, and they have land to turn back to at worst. The average order value with Maimaibao is around 300 yuan, higher than that of well-known e-commerce brands such as Vancl. For them, buying a pair of shoes at about 300 yuan is affordable. The brands must be the well-recognized ones among their peers, not necessarily being well-known across the country.

Zhang describes his users, unlike users in cities, as having few choices of offline stores or online stores city people can access through PCs in the daytime at work or at night at home. They use low-end mobile phones, getting connected with 2G and more recently with 3G. All Maimaibao’s users made purchases through its WAP site, said Zhang, with a half using feature phones, one third using Symbian-based smart phones and the rest using phones that cannot be identified by Maimaibao – Shanzhai phones.

Internet café is the only place for them to access desktop PCs in spare time. Their online life on PC, however, doesn’t include setting up an account on Alipay or any e-commerce platforms, but playing online games, chatting on QQ IM or watching videos. So they pay cash on delivery.

Delivery is a problem for most courier services don’t go to distant areas that only EMS, the state-owned national delivery service, and two other private ones do. Sometimes it takes time to find where those people are; sometimes they cannot be found even though customer service staff had called them to confirm. The rate of failed delivery – recipients cannot be found — with Maimaibao is as high as 15% to 20%. The company doesn’t plan to establish its own logistics service for Zhang thinks his company isn’t big enough to support one.

Since customers were only aware of certain brands, Maimaibao decided to build its own brand at lower prices. In mid-2012, over 50% of garment and shoes sold were of its own brand and that’s 20% of its total sales.

The company received investments from Jiang Xipei, a well-known angel investor, in 2006,  Sequoia China in 2008 and Tencent in 2010. The total is less than USD10 million, according to Zhang.

Zhang Xiaowei is a graduate from Tsinghua, one of the top universities in China and started up a WAP game community in 2005. Having learned that so many Chinese got connected through feature phones, he began selling adult products via mobile phones from 2006. Maimaibao reportedly had ten thousand orders daily in 2011, making a total of over 300 million yuan in revenue. Now it has over seven hundred employees.


Zhang Yu used to be a Silicon Valley engineer and started working on mobile services in 2004. His mobile commerce business, igou, was founded in 2009 and now covers workers in third- and fourth- tier cities in Pearl River Delta.

To increase sales, igou is focused on offline marketing, placing posters at grocery stores next to factories, hiring those stores to give away coupons to workers, or painting ads on walls of houses in villages, train stations or bus stations which is widely used in rural China.

The company received investments, a total of USD 50 million, from IDG and Zero2IPO Capital in March 2011. Its target users, however, aren’t just those workers, but all Chinese. “Starting out from third- and fourth- tier cities is a choice based on current situation. igou’s goal is to be the best mobile commerce service. The biggest challenge will come when the business is big enough to expand to another user demographic”, said Gaoxiang, a partner at IDG.


Huango, founded in 2010, is targeting at workers and students who use low-end smart phones and cannot access PCs as often as white-collar workers.

Lin Lechang, its founder and former mobile application developer at, takes full advantage of his former job. As he had built relationship with many mobile phone manufacturers when he needed to have software his team developed to be pre-installed in mobile phones. Through those connections, Huango’s app has been built-in in about four million smart phones that generate 60% of its total traffic. Lin thinks getting the right way in channeling traffic is critical. Weibo marketing, for example, isn’t successful as “users don’t match”, according to Lin. The rest traffic is from WAP-based start-up sites or ads.

As the low-price smart phones exploded in 2012, the sales of Huango’s soared. The total revenue generated in the first three quarters were twice the number for the whole 2011.

Tracey Xiang is Beijing, China-based tech writer. Reach her at

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