A Town of 46,000 People Sells a Third of China's Hanfu — and the Return Rates Are Hitting 80 Percent
Cao County in Shandong has become the centre of a 13-billion-yuan hanfu industry, built by returnee entrepreneurs, among them a PhD-trained engineer — but its 18,000 shops are also the face of a return-rate problem that is eating the margins.
In a town of 46,000 registered residents in Shandong province, there are 18,000 registered online shops. The town is Caoxian's Daji township, and it sells more than a third of the traditional hanfu robes worn in China — a 13-billion-yuan industry in 2025, built by returnee entrepreneurs, among them a PhD-trained engineer.
The town's story is now the subject of a People's Daily series, reported on Weibo, that described the township as "China's busiest township" — home to the country's largest performance-costume production base, and a place where a piece of hanfu can support a county's economy. The series is called "The Unseen Chinese Economy", and it sends a young actress to the township's factories, where the robes are woven, embroidered and shipped out.
The industry's roots are in the town's own history. The township is the country's largest performance-costume production base, and the hanfu shops grew out of that trade. CCTV's coverage described Hu Chunqing, an engineering PhD who returned to the township with his wife and started designing original hanfu products, and whose annual sales quickly reached nearly 10 million yuan. The county's tourism bureau, in a separate account, described the county's peony culture and hanfu as a striking pairing — and the local tourism bureau is now pairing the robes with the county's peony season.
The boom's downside is being told on the same platform. The same week, CCTV News reported that the township's hanfu shops are facing a return-rate problem: the performance-costume shops report returns of 35 to 40 percent, and the hanfu shops report returns of 70 to 80 percent. The cause is the same flexibility that makes the robes popular: they are worn for an event, and returned. "Quite a few consumers wear them, perform, then return them," the report said. "When they're opened up, they're dirty, completely unable to reuse."
The story is a small window on how an e-commerce industry works in China. A town of 46,000 people can sell a third of the country's hanfu, and the same platform can report the return rates that make the business's margins thin — the robes are worn for events, and the industry's pricing is built on the assumption that they are worn for events.