When Zhu Renran and his friends decided to start a company, setting up in a suburban town in southern Shanghai was not the first place that would have come to mind.

Fengjing, which lies on the border of Shanghai and Zhejiang province, is known among locals for its ancient water town dating back more than 1,500 years ago. Except for a few industrial parks, the town, which covers around 90 square kilometers, remains largely pastoral.

Born and raised in Fengjing, Zhu moved to settle in downtown Shanghai after his graduation from college, working as a software engineer and later in corporate management in multinational companies.

In July 2017, when one of his former high school classmates approached him to start a company to scout esports talent back in his suburban hometown, he agreed without hesitation.

"The offer was too tempting to resist," said the 26-year-old, sitting in the lobby of Innovation Town, which was established by the Fengjing town government.

As an avid fan of video games, Zhu is not oblivious to China's craze for esports, which is being propelled by the country's booming video game market-already the world's largest and expected to register $37.9 billion in sales this year, according to gaming consultancy Newzoo.

The market is set to grow steadily as companies like Tencent, NetEase and Alibaba compete to market video games, fill stadiums with fans and sell broadcast rights to matches.

This has created a strong demand for professional gamers and live broadcasters.

One of the founders is an esports coach who led a Chinese professional team-called The Wings Gaming-to win the championship of The International 2016 in the game of Dota 2.

They had scouted almost every incubator and industrial park across Shanghai looking for office space, but nothing was comparable to what Fengjing could offer-free space for at least two years, free publicity and promotion for the company on any occasion the local government finds appropriate and minimal living costs in the town, which also boasts fresh air, a green environment and the serenity of surrounding countryside.

In addition, the town's remote location on Shanghai's south side has had little impact on its business, as players can wield virtual weaponry in multiplayer games anytime, anywhere.

Zhu's company is typical of the startups Fengjing aims to attract to transform itself into the innovation backyard of Shanghai.

"China has made tremendous progress in building megacities," said Zhang Bin, Party chief of Fengjing. "But we are still finding ways to develop towns with distinctive character, which has become a new engine for urbanization in terms of the economic growth and industrial transition of China. One thing we've learned from the process is that it is up to a small town itself to discover its strength and build on that strength to become distinctive."

The rise of new sectors brought by technology has transformed Fengjing's remoteness (it's located 60 kilometers from downtown Shanghai) into a competitive edge, as demonstrated in Zhu's case, Zhang said.

In 2015, Fengjing set up Innovation Town, where Zhu's company is based, to support and attract startups. So far, more than a dozen have thrived here, according to Chen Qiang, who has been overseeing the incubator's operations since its founding.

Over the past year, Zhu's 10-member company has prospered, helping more than a dozen professionals enter the booming esports industry, either as gamers or live broadcasters.

Zhu said the company is now able to break even and will continue to grow as it has started to gain recognition from the industry.

"We live and work in our hometown, doing what we really enjoy in an industry that has great prospects," Zhu said.