E-com­merce, lo­gis­tics firms to tread ru­ral path

China Daily (Canada) - - FRONT PAGE - By ZHONG­NAN in Suichang, Zhe­jiang zhong­nan@chi­nadaily.com.cn

The Min­istry of Com­merce will en­cour­age more e-com­merce and lo­gis­tics com­pa­nies to ex­pand into ru­ral ar­eas this year as part of its ef­forts to cre­ate more jobs and pro­vide bet­ter in­for­ma­tion ac­cess, of­fi­cials said onWed­nes­day.

They said that the pri­mary ob­jec­tive of the ef­forts would be to cre­ate a more or­derly ru­ral e-com­merce mar­ket this year. To achieve this, the min­istry will in­te­grate re­sources from telec o m m u n icat ions , trans­porta­tion, postal ser­vices, fi­nan­cial ser­vices, sup­ply and dis­tri­bu­tion sec­tors to en­hance ru­ral ar­eas’ abil­ity to up­grade their in­fra­struc­ture fa­cil­i­ties and mar­ket ac­cess chan­nels.

Kong Lingyu, deputy direc­tor-gen­eral of the depart­ment of mar­ket sys­tem devel­op­ment, said e-com­merce not only of­fers ru­ral res­i­dents con­ve­nient ac­cess to goods, but is also an im­por­tant tool to gauge the cur­rent mar­ket prices.

The ru­ral mar­ket has tra­di­tion­ally been dom­i­nated by deal­ers of some brands and re­tail­ers with limited stocks. Be­cause of the high com­mis­sion fees and trans­porta­tion costs, ru­ral con­sumers of­ten had to pay rel­a­tively higher prices than those in cities to buy prod­ucts such as flat screen tele­vi­sions, wash­ing ma­chines, mo­tor­cy­cles and farm­ing tools.

“Build­ing in­for­ma­tion shar­ing, fi­nanc­ing and credit sys­tems will be pri­or­i­ties to fa­cil­i­tate the devel­op­ment of e-com­merce in ru­ral ar­eas, along with cheaper mo­bile In­ter­net and lo­gis­tics ser­vices,” said Kong.

To­tal ship­ments to ru­ral ar­eas reached 2 bil­lion parcels in 2014, up 13 per­cent on a year-on-year ba­sis, data re­leased by the State Post Bureau show.

Ex­press de­liv­ery com­pa­nies such as SF Ex­press (Group) Co, YTO Ex­press Co Ltd and China Postal Ex­press and Lo­gis­tics Co have built more than 50,000 ser­vice cen­ters and de­pots in ru­ral ar­eas, cov­er­ing 56.8 per­cent of the na­tion’s vil­lages and towns.

Nie Lin­hai, deputy direc­tor-gen­eral of depart­ment of elec­tronic com­merce and in­for­ma­tion at the Min­istry of Com­merce, said: “The rapid growth in e-com­merce will help spur ru­ral con­sump­tion and cre­ate more jobs for lo­cal young­sters, and at­tract en­tre­pre­neur­ial tal­ent to ru­ral ar­eas.”

In­stead of paint­ing their brand names on the walls in dif­fer­ent vil­lages, gi­ant e-com­merce com­pa­nies such as Alibaba GroupHold­ing Ltd, JD.com Inc and Sun­ing Com­merce Group Co Ltd have all be­gun to deploy more­man­powerand re­sources in the coun­try­side to sus­tain growth and tap the huge po­ten­tial.

Sun Weimin, vice-pres­i­dent of the Nan­jing-based Sun­ing, a ma­jor player in the Chi­nese e-com­merce mar­ket, said the com­pany plans to open be­tween 1,500 and 2,000 ser­vice sta­tions ev­ery year in the coun­try’s low­ertier cities and ru­ral mar­kets over the next five years. It will also es­tab­lish 10,000 de­pots cov­er­ing 25 per­cent of ru­ral ar­eas be­fore 2020.

“Th­ese ser­vice cen­ters will pro­vide re­tail, lo­gis­tics, prod­uct in­stal­la­tion and main­te­nance ser­vices, as well as on­line shop­ping train­ing for peo­ple in ru­ral ar­eas. Sun­ing will also al­low its prod­uct sup­pli­ers from both city and ru­ral ar­eas to stock their goods in ware­houses across the coun­try,” said Sun.

Wang Xiaox­ing, an e-com­merce an­a­lyst at Bei­jing­based In­ter­net con­sul­tancy Analysys In­ter­na­tional, said even though the gov­ern­ment has rolled out fa­vor­able poli­cies to bol­ster the devel­op­ment of e-com­merce in ru­ral ar­eas, it is not easy for e-com­merce com­pa­nies to suc­ceed in this new niche mar­ket within a short pe­riod.

“Ru­ral res­i­dents have far lower salaries than their coun­ter­parts in cities. The gov­ern­ment needs to set up more mod­ern lo­gis­tics in­fra­struc­ture fa­cil­i­ties in the coun­try­side,” Wang said. “It takes time to ad­dress th­ese hur­dles.”

WANG ZHUANGFEI / CHINA DAILY

Ali­pay, the third-party on­line pay­ment arm of Alibaba Group Hold­ing Ltd, pro­motes its ru­ral pay­ment ser­vices and ru­ral e-com­merce at an expo in Bei­jing on Wed­nes­day.

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