Old school ties, business opportunities? (4)

Going online

In order to cut costs, Wen has been planning to launch an online version of his company since 2008. Called 580ju.com, it will be launched before the end of the year, he said.

"If we go online, we can deal with increased orders with little rise in costs, and we can handle as many orders as possible, as long as we manage third-party suppliers well," he noted.

Wen said he wants to offer a "classmate-based SNS (social network service) model" for clients of the platform, "but in a simplified version." People would be able to book tickets and hotels online and if someone has already booked tickets, their flight and hotel information will be shown on the platform to other classmates, Wen said.

His employees are also working to integrate information about suppliers, including hotels and local gift companies. After adding their information to the website, the company plans to charge suppliers from the second half of next year, which Wen believes will be a source of profit for the company in the next few years.

It is hard to make a profit from SNS websites at present, Wen said, but he would provide value-added services such as human resources based on schoolmate relationships to keep consumers connected to his platform.

Despite good prospects for the online model, Wen concedes there are also difficulties. "The first is integration and management of good suppliers and another is how to ensure that suppliers provide standardized services to the level that we require."

After the platform is launched, Wen said his firm will only provide offline services for high-end clients. Deng said he would be willing to share his resources on Wen's platform, but will still stick to his offline business for now.

Because of the market potential and the high profit margins, Wen's company caught the attention of TCL Zijin Venture Capital in May, but Wen decided not to accept investment from the firm.

"Through my own efforts the value of the company will rise anyway, and I believe capital will come and find you if you have a good team and a good project," he said.

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