A livestreamer promotes hanfu at the Youai Cloud Warehouse in Caoxian, Shandong Province, on 18 June (XINHUA)

When one steps inside Caoxian’s Youai Cloud Warehouse, a livestreaming base dedicated to hanfu, it feels less like a clothing warehouse and more like a time capsule. Thousands of intricately embroidered garments line the racks - from elegant horse-face skirts to modernised editions of traditional Chinese clothing. 

On one side, livestreamers dressed in hanfu smile at their smartphone cameras, twirling for their online audiences while the chime of incoming orders punctuates the air. Behind them, visitors run their hands over organza fabrics, marvelling at the fusion of age-old craftsmanship and contemporary taste. 

Caoxian’s story epitomises an unlikely transformation. Once among the poorest counties in southwest Shandong Province, it has grown to become China’s hanfu hub. By 2024, Caoxian’s hanfu sales had surpassed 12 billion yuan ($1.67 billion) - more than half of the national market share. For a county with no more than 2 million residents, the achievement is extraordinary. The catalyst for this meteoric rise is e-commerce. 

The rise of a hanfu hub 

Caoxian languished in poverty for decades, with its economy reliant on traditional industries such as farming and forestry. Many of its residents migrated to more developed regions of the country.  

Change came in 2008, when a handful of young migrant workers returned home and started selling costumes online. Having witnessed the rise of online sales in cities, they began listing photography costumes and graduation gowns on Taobao, the leading e-commerce platform in China. The revenues dwarfed farming income, and soon their success stories spread. 

A large number of villagers followed. By 2013, the local government had recognised the trend and stepped in with support. Subsidies, training schemes, tax breaks, streamlined business registration and even loans were introduced. Infrastructure improved too: Logistics routes were expanded, and broadband reached remote villages. What began as side hustles quickly turned into full-time occupations.  

By 2018, Caoxian had established itself as a national e-commerce hub with 113 Taobao villages, forming the country’s second-largest cluster. In Dinglou, one such village, per capita income surpassed 100,000 yuan ($1,392) per year, outpacing levels in Beijing and Shanghai. On the Singles’ Day - China’s annual online shopping bonanza held on 11 November - Caoxian frequently ranked among the top-selling counties nationwide. 

A model showcases new hanfu designs at a fashion launch event in Caoxian, Shandong Province, on 10 April (XINHUA) 

As hanfu became trendy among young Chinese eager to reconnect with their cultural heritage, Caoxian entrepreneurs saw a golden opportunity. Capitalising on existing tailoring skills and factory facilities, they drove down costs. Affordable prices led to large-scale sales, propelling hanfu into the mainstream, and Caoxian into pole position. 

By 2021, the county was home to more than 2,000 related enterprises, including 600 dedicated hanfu manufacturers. Collectively, they commanded a third of the national hanfu market. By 2024, that had risen to over 50 percent. 

The e-commerce sector grew in tandem. Today, Caoxian hosts 8,476 e-commerce firms and 91,200 online shops, among which 15,000 are dedicated to hanfu. Around 350,000 locals - one in five residents - are directly employed in the e-commerce sector, either as shop owners, garment workers, logistics handlers or livestreamers. 

E-commerce has not only created jobs, but also reversed migration. Instead of leaving to work in major cities, young people have been returning to open online businesses. Villages that were once deserted by working-age residents are now humming with commercial activity.  

When the horse-face skirt went viral during the 2024 Lunar New Year, Caoxian once again became the nation’s supplier of choice, showing its sustained competitiveness in the market. 

A staff member demonstrates hanfu etiquette to an African visitor in Caoxian, Shandong Province, on 19 June 2025 (XINHUA) 

From copycats to creators 

Caoxian exemplifies a broader trend in China’s counties, where e-commerce has revived dormant industries and fuelled rural revitalisation. In Shuyang, Jiangsu Province, flower farmers sell blooms online rather than travelling across the country. In Qiuxian, Hebei Province, sweet potatoes and mutton reach buyers nationwide. In Anxi, Fujian Province, online tea sales account for one quarter of the national total. 

According to a report released at the fifth China New E-commerce Conference held in July, e-commerce has brought opportunities to diversified groups of people. Short-video platforms alone have created related jobs for more than 40 million people, including farmers and artisans. Rural online retail reached 2.56 trillion yuan ($356.5 billion) in 2024, with agricultural product sales climbing nearly 16 percent year on year. 

Yet challenges remain. Homogenisation of products fuels cut-throat price competition. Over-reliance on transient online “traffic” creates volatility. Despite its market leadership, Caoxian faces the problem of over-supply, thin margins and product imitation. 

For entrepreneurs such as Hou Guodong, born in 1989, the lesson is unmistakable: Originality is essential for survival. The son of Taobao merchants, he launched his own hanfu brand after studying e-commerce, employing 35 staff. 

The horse-face skirt craze taught him not to rely on single-item booms. Now, his label designs collections by dynasty and season: Tang for spring, Song for summer, Ming for winter. Fast prototyping via livestream “trial runs” helps to gauge demand before scaling up. His return rate hovers around 15 percent, far below the industry average. 

“The competition has washed away many low-end copycats,” Hou told Xinhua News Agency. “Those with design capacity, efficiency and quality control will survive. That’s the new normal.” 

In Youai Cloud Warehouse, flexible digital production lines operate alongside more than 1,000 pieces of equipment. Production data is synchronised in real time with livestreaming platforms, allowing automatic scheduling according to sales performance. This integration enables the facility to respond quickly to changing consumer preferences. 

The local government is actively nurturing such competitiveness. Special funds support smart manufacturing upgrades, while partnerships with universities bring in design expertise. Shared studios allow firms to collaborate on intellectual property, ranging from patents to prototypes. 

The county has even secured fast-track patent approval, cutting waiting times from months to just 10 days. For an industry where a garment’s popularity may last only three months, that speed is vital. 

Hanfu items are also offered in places where they are most wanted: scenic and cultural sites. At these locations, dedicated hanfu centres have been established, creating a system that integrates display, sales, rental and styling. 

Staff sort parcels at an e-commerce logistics centre in Caoxian, Shandong Province, on 18 June (XINHUA) 

The county has also been proactive in promoting hanfu-themed consumer events and expanding the market for related products and merchandise. To date, it has successfully hosted three hanfu cultural festivals, featuring runway shows, cultural lectures and numerous other activities, in a bid to expand the influence of hanfu among consumers.  

Internationally, Caoxian firms have joined exhibitions in the Republic of Korea and Italy, and collaborated with cross-border platforms such as Shein and Temu. Overseas fans are beginning to post pictures of themselves in horse-face skirts on social media, extending Caoxian’s reach far beyond China’s borders. 

Today, Caoxian continues to thrive thanks to the combination of e-commerce and hanfu. Local logistics networks deliver the latest fashion creations to consumers as swiftly as in China’s big cities. As the county nurtures new growth drivers - from wooden handicrafts to specialty foods and pet products - the wider potential of e-commerce as a catalyst for the real economy is being realised in this once-unlikely corner of Shandong.