Ma Jian has never regretted his decision two years ago to start a website focused on shopping for second-hand goods, despite objections from friends and relatives.
Though many people told him the business would surely fail, Ma is pleased to see his first entrepreneurial venture enter its second year.
Founded in 2008 by Ma and four of his friends, Shede.com began as a platform to enable users to shop for and exchange second-hand goods. It later expanded to include new items and serve as a gateway for other online vendors.
The website now has more than 2.5 million registered users and is growing by about 10,000 users a day.
"The website almost failed for several times - all narrow escapes from death," the 36-year-old CEO joked.
The biggest hiccup came in 2008 when Ma noticed many users quit the website after they sold a few items.
"What these users wanted were new items, not second-hand ones," said Ma.
He complied by hooking up with e-commerce sites to offer brand new products together with his second-hand stuff. The website now boasts more than 20 commercial partners including 360buy.com, an online shopping platform for computers and consumer electronics, and Dangdang.com, an online bookstore.
A large percentage of Shede.com customers are linked on to other e-commerce websites. Sales of this kind hit 4.5 million yuan ($659,147.50) last December, and Shede.com earned commission worth 113,000 yuan, said Ma.
"We want to change it from a platform that deals in second-hand goods to one people like to visit before they buy things to see whether they can buy them with little or no money," he said. There are currently 300,000 new offerings and 3 million second-hand items for sale on the site, which sees between 5,000 and 10,000 deals made every day.
Previously serving as a vice president in charge of wireless at another website, Ma said he had a strong feeling about the potential profitability of his idea.
In addition to commissions, Ma has also come up with cash-generating services including product reservation and mass messaging fees within the website.
It costs about 1 million yuan a month to run Shede.com and the site has yet to break even, but Ma is confident it will do so by the end of this year if it can attract 10 million users.
However, Shede.com is not without problems.
"Taobao.com has more than 180 million users, but if Shede.com follows in its footsteps they may face some serious challenges," said Chen Shousong, an analyst with research firm Analysys International.
Taobao.com has a variety of headaches including consumer complaints over fake goods and credit management issues, he said.
Websites focusing on second-hand goods saw a boom in China around 2005, but most of them closed down because the online shopping market was not well developed.
Today, with China's online shopping market becoming more mature, opportunities exist for websites like Shede.com, experts say.
Ma is currently in talks with venture capitalists for a third round of financing to help fund new growth. "We have to reach out to a lot more users," said Ma. "Only in this way can we gain the upper hand in this market."
