Former middle school classmates born in the 1970s put on uniforms and red scarfs, and pose for a picture in Chongqing on October 17. Photo: CFP

Bank employee Zhang Dapeng received an e-mailed invitation recently to the 10-year anniversary party for his university classmates at Beijing Technology and Business University.

However, to his surprise, the e-mail was not from his classmates or his teacher, but from a company that organizes classmate reunions.

"Having graduated 10 years ago, I have not seen or have lost contact with some of my classmates, and I'm looking forward to meeting them again," Zhang told the Global Times.

There are many people like Zhang. As well as reunions being a way for classmates to get connected again, it also offers a business opportunity.

New business

Deng Jiang is the founder of Tong Chuang Hui (literally, "classmate reunion"), a Beijing-based company that organizes reunion gatherings and parties. The company has been busy recently, with his 10 staff members handling six to seven orders each week to organize classmate reunions.

"The New Year's Day and Spring Festival holidays are drawing near, and they are popular periods for reunions," Deng told the Global Times.

He started the company in 2007, and it specializes in Beijing and nearby markets. Deng said he receives about 100 orders each year, and most of the clients are people who graduated from university 10 or more years ago.

After receiving an order, the company signs a contract with the class member who is in charge of the reunion, according to Deng.

The company first sends invitations to class members and teachers, and then contacts them by telephone. After the number of participants is decided, the company books hotels, restaurants and buses and also designs gifts, souvenir T-shirts and commemorative albums. During the reunion party, the company takes photos and videos to send out later.

Wen Neng, founder of Yuanhe Network, another firm offering reunion services based in Nanjing, capital of East China's Jiangsu Province, told the Global Times that charges for each reunion vary from 1,000 yuan to 5,000 yuan per person, according to the different standards of accommodation, dining and souvenirs required.

Wen's company was one of the first in the sector. He started by organizing reunions for his schoolmates when he was a sophomore at Nanjing University of Science and Technology in 2006. After graduating, he started Yuanhe Network in 2008, initially relying on schoolmate connections at his university. He has since opened branches in five other cities including Beijing, Shanghai and Guangzhou.

According to Wen, most reunions have around 30 participants. Given that the average price is around 1,500 yuan per person, the company can make around 45,000 yuan in revenue from each party.

In 2011, he received more than 60 orders in Nanjing alone, making 3 million yuan in revenue, and a high profit margin of roughly 50 percent. Deng said his company also has a healthy profit margin, of 30 to 40 percent.

Big potential

Currently, there are less than 10 companies in the classmate reunion business in Beijing, and a few more in other cities. But these firms believe the market has big potential, as people have become increasingly interested in reunions that could help them recall good memories or build contacts with old friends that could further their career.

Wen believes the business could be worth billions of yuan in the long run. "Each year, more than 6 million people graduate from universities, and they will get together at least three times in their lifetime. The average spending is also about 1,500 yuan per person," adding up to 27 billion yuan, Wen noted.

"There is also demand for middle-school classmate reunions, which makes the market even bigger," Wen said.

However, the market is easily accessible to anyone with university connections, he said, so competition could expand hugely.

Deng said his clients help promote the company through word of mouth. And Internet promotion is another marketing method for his company, using Weibo, BBS and forums.

"Compared with word of mouth and advertisements, which are passive marketing, active marketing - close cooperation with various universities - is more important," Wen said.

This is one reason why his company has branches in cities with a large number of universities, such as Beijing, Shanghai and Guangzhou.

Wen said another key factor for success is management of service suppliers like hotels and restaurants, as well as standardized procedures.

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.