STOCKED UP: Online shop owner Yuan Xiaoping checks inventory of clothes and shoes in her warehouse, a bedroom in a rented apartment in Changsha, Hunan Province, on July 21 (LI GA)

Starting a business used to be quite a hassle—renting an office or warehouse, hiring employees and bringing together enough capital to purchase goods and equipment. But today, the only startup capital a person needs is a computer and an Internet connection.

Xiao Lili, a sophomore at Peking University, opened an online shop on Taobao.com, China's largest online customer-to-customer platform, in March.

"I was just curious how easy it would be to start the business," Xiao said.

Xiao spent a mere 1,000-yuan ($163) for a deposit to open her online shop.

And that's how Xiao started her business. Her cousin, who studies in the United States, mails cosmetics to Xiao. Besides Taobao, Xiao resells them on a university bulletin board system.

"I have to go to classes every day and deal with school. I don't have enough time to make more money," said Xiao, who makes about 1,000 yuan per month on her cosmetics business. "It puts a squeeze on my time, but I am happy with the money and it is enough to cover basic expenses."

Online entrepreneurs

More college students in China are looking to online retailing for business opportunities amid a harsh employment situation. About 7 million new graduates entered the job market in 2013, competing among themselves and with other peer groups for only 9 million vacant employment positions.

Ten years ago, the number of job vacancies outnumbered new graduates 4-1. Today's graduates are far less certain of their job prospects.

Wang Jiaqiang, a 23-year-old graduate from Zhejiang Science and Technology University, opened an online shop in 2011 selling boxes. It started as a hobby, as his father runs a factory in his hometown and provides boxes at a very low cost.

Wang never thought of making a career of it until his hobby's annual trade volume reached 15 million yuan ($2.45 million) in 2012 with about 30,000 clients nationwide. His father has acknowledged the power of the Internet. Now this online shop has become an important sales channel for the factory.

"I feel lucky and proud to have my own business and support of my family," Wang said. "Normally, parents consider online business to be informal and unreliable."

Eighty percent of shopkeepers on Taobao were born between 1981 and 1994, according to a joint survey in 2012 by Peking University and Ali Research, a research arm of Taobao's operator Alibaba Group.

"In the past there were two types of jobs that graduates considered ideal—stable jobs in government or state-owned enterprises, or well-paying jobs with big transnational corporations or financial institutions," said Chen Yu, Director of the China Institute for Occupation Research at Peking University. "However, for young people today, starting their own business seems to be another attractive career path."