A sign that translates to “China Shuihu Golden Egg E-commerce Base” straddles a road in Shuihu Village, Shangye Town, Feixian County, Linyi City, Shandong Province. The road beneath it leads to some of the hamlet’s main e-commerce facilities.

A small hamlet situated in the heart of the Yimeng Mountains, Shuihu Village, Feixian County, Linyi City, Shandong Province, sells 150 million hollow golden eggs made of plaster that can be filled with various items throughout China every year. In 2003, a popular Chinese talent show-style TV programme launched a reward system in which qualifying participants can smash golden “eggs” that contain various prizes. The concept became popular throughout the country in subsequent years, especially in conjunction with promotional activities, celebrations, banquets, and other festive occasions, creating a plaster craft market segment with hundreds of millions of yuan of annual output value. A major participant, Shuihu was producing 80% of the golden eggs sold on the a major Chinese e-commerce platform as of spring 2022, according to the online shopping giant.

Although the village’s inhabitants have made plaster crafts since the 1990s, they did not make good profits from them until relatively recently. In 2006, a resident named Sun Yunbing received an order for more than 10,000 golden plaster eggs, which made him realise that there was a large demand for this type of product. His son began helping him sell them online, and the family’s business started to gain market recognition. In 2013, Sun generated more than 1 million yuan of e-commerce revenue, which inspired him to lease 8 mu of land in the village and build a golden egg factory on it.

A Shuihu resident paints plaster eggs.

The first Shuihu resident to significantly increase their income with plaster eggs, Sun’s success aroused his fellow villagers’ interest. Dozens of golden egg workshops started to gradually appear in the hamlet, and its e-commerce industry began expanding and developing rapidly in 2014. Three hundred thirty-one online stores, 90 full-time and part-time customer service staff, and 11 express delivery companies were present in the village of 760 households and as many as 200,000 to 300,000 of its plaster crafts were being purchased by buyers throughout China every day as of August 2021, representing nearly 300 million yuan of annual output value, with online transactions accounting for nearly 90% of total transaction volume.

The booming industry has also been driving the development of similar products in the village, such as small plaster dolls, plaster sculptures both large and small, resin statues, large hand-painted eggs, and art teaching aids, as well as supporting products and services, such as packing boxes, wooden mallets that are used to break the golden eggs, golden confetti that they can be filled with, stickers that are used to seal the holes that enable them to be filled, and logistics. Shuihu has also been able to renovate its roads and streetlights; barbecue restaurants and other late-night dining businesses have been  emerging; five new convenience stores have opened; the village’s elementary school was able to purchase new equipment; and its three kindergartens were remodelled and have started attracting students from neighbouring villages.

A Shuihu resident dries golden eggs in front of their home.

Promoting Sustainability via Innovation

Shuihu’s 2019 sales champion, Sun Yuxing generated 17 million yuan of revenue through his online stores that year. He thought he could hit a new high in 2020, but the sudden emergence of the COVID-19 pandemic reduced his annual turnover to 8 million yuan as the occurrence of offline celebrations and promotional activities decreased sharply.

In 2021, Shuihu official Sun Yun mentioned that he thinks sales would have inevitably declined even without the pandemic and that the village’s plaster egg industry has, therefore, needed to innovate. He noted that local production capacity has expanded rapidly due to the fact that the process is simple, easy to learn, not technically demanding, and requires a relatively low amount of investment and that homogeneous competition has squeezed profit margins.

“Up to 8 yuan of profit could be achieved per egg when I first got involved with the business seven years ago, but more people make golden eggs now, and profit margins have dropped to about 2 yuan per egg,” Sun remarked, explaining that some of the businesses that produce plaster eggs in the village have begun producing more artistic ones in response to the situation.

A view of a Taobao store featuring golden eggs run by Shuihu residents loaded on a web browser

An organisation known as the Shuihu E-commerce Cooperative was also established in the village in order to promote the development of its e-commerce industry and provide various services and benefits for its members.

A plaster egg more than one meter in height with bright peonies painted on it that is relatively difficult to make, sells for more than 1,000 yuan, and, therefore, yields profit equivalent to what hundreds of golden eggs do is showcased alongside other creations in its product exhibition hall.

“The plaster egg business was greatly affected by the COVID-19 pandemic during the first half of [2020],” Zhu Jianwei, general manager of a company known as Feixian Qingyuan Arts and Crafts Co. Ltd and creator of the type of one-meter egg that is on display at the Shuihu E-commerce Cooperative, recounted in 2021. “I discovered that plaster crafts that are painted in an artistic manner sell well on e-commerce platforms, so I invited an experienced painter who lives nearby to help make some. I didn’t expect the market feedback to be as good as it was.”

With an eye on the long-term, the cooperative is currently negotiating to arrange for skilled experts from some art schools to help it design new products in order to inject new development momentum into its plaster craft industry and remain competitive.

For more information, please contact WFP China COE (wfpcn.coe@wfp.org)