E-com­merce be­gins to trans­form ru­ral China

China Daily (Hong Kong) - - BUSINESS -

BEI­JING — Ev­ery day, Chen Yan­dong han­dles dozens of pack­ages for the res­i­dents of Gaozhai vil­lage in North­west China’s Gansu prov­ince. They range from ap­pli­ances such as re­frig­er­a­tors and air con­di­tion­ers to daily ne­ces­si­ties like ra­zors and tooth­paste. Chen is amazed by how res­i­dents of the re­mote vil­lage make the most of their in­ter­net con­nec­tions to add con­ve­nience to their lives.

“Peo­ple are happy to get ac­cess to good prices and qual­ity prod­ucts from on­line ven­dors,” Chen said.

E-com­merce is help­ing re­vi­tal­ize China’s ru­ral vil­lages, home to half of the coun­try’s pop­u­la­tion. It has also emerged as a new growth driver for con­sumer spend­ing in the world’s se­cond largest econ­omy.

China has the world’s largest e-com­merce mar­ket. As the in­comes of ru­ral res­i­dents in­crease, growth in on­line re­tail pur­chases by ru­ral shop­pers has out­paced their ur­ban coun­ter­parts.

China’s ru­ral res­i­dents spent 894.54 bil­lion yuan ($131.5 bil­lion) on­line in 2016, ac­count­ing for 17.4 per­cent of the na­tion’s to­tal, ac­cord­ing to the Min­istry of Com­merce.

E-com­merce is also open­ing the doors to the huge ru­ral mar­ket for com­pa­nies and farm­ers.

Alibaba, which be­gan a ru­ral strat­egy on its e-com­merce plat­form Taobao in 2014, has set up lo­cal ser­vice cen­ters in about 30,000 vil­lages across 700 coun­ties to sup­port its e-com­merce busi­ness and pro­vide de­liv­ery ser­vices in ru­ral ar­eas.

To meet ris­ing de­mand, e-com­merce gi­ant JD.com is ex­pand­ing its ser­vice cen­ter work­force to over 300,000 in ru­ral ar­eas.

Farm­ers have also raked in hand­some prof­its from sell­ing premium pro­duce on­line.

Li Chun­wang from Wu­gong county in Shaanxi provinc has set up a co­op­er­a­tive which pur­chases fruit from farm­ers and sells it on­line. Pre­vi­ously it made an an­nual in­come of around 3 mil­lion yuan. In 2016, the num­ber shot up to nearly 300 mil­lion yuan.

The city of Dong­gang in North­east China’s Liaon­ing prov­ince is well known for its straw­ber­ries. In 2016, more than 80 per­cent of the city’s straw­ber­ries and straw­ber­ry­based prod­ucts were sold on­line. In the first three months this year, on­line sales reached 1.2 mil­lion yuan.

Tian Yi­hong, Party sec­re­tary of Wu­gong county, said e-com­merce has given lo­cal agri­cul­ture a boost and farm­ers no longer re­main stuck at the lower end of the value chain.

The gov­ern­ment has re­it­er­ated its sup­port for e-com­merce in un­der­de­vel­oped ru­ral ar­eas. The Min­istry of Com­merce an­nounced in Oc­to­ber 2016 that “pol­icy sup­port will be given to small on­line re­tail­ers ... to lower their op­er­a­tional costs.”

More will be done to sup­port and nur­ture e-com­merce busi­nesses op­er­at­ing in ru­ral re­gions, and train­ing pro­grams will be of­fered to small busi­ness own­ers, ac­cord­ing to the min­istry’s web­site.

As part of the Chi­nese gov­ern­ment’s goal to elim­i­nate poverty by 2020, it has cre­ated more than 1.000 “Taobao vil­lages” over the past decade.

On­line sales rev­enue in 105 na­tional-level poverty-stricken coun­ties, in­clud­ing the model dis­tricts lauded by the Min­istry of Com­merce, reached 220 mil­lion yuan on av­er­age in 2016.

E-com­merce plays a key role in poverty re­duc­tion, by not just giv­ing a man a fish, but also teach­ing him how to fish, said Liu Qiang­dong, chair­man of JD.com.

On­line busi­ness own­ers in ru­ral China topped 8.11 mil­lion in 2016, cre­at­ing over 20 mil­lion jobs.

the money China’s ru­ral res­i­dents spent on­line in 2016

HU WEIGUO / CHINA DAILY

Staff of a ru­ral fruit com­pany in Mengcheng county in An­hui prov­ince dis­cuss po­ten­tial new or­ders with a prospec­tive on­line buyer.

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