The World of Chinese - - Editor's Letter -

The quiet eco­nomic rev­o­lu­tion of e-com­merce in the coun­try­side has been a cat­a­lyst for en­trepreneur­ship and in­de­pen­dence in ru­ral ar­eas for a decade. Vil­lages that once sur­vived on farm­ing and fac­to­ries now thrive on Taobao and Tmall. Learn more about how life has changed for China's of­fi­cial “Taobao vil­lages.”

Across from Lü, a tra­di­tional red em­blem hangs on the wall of a home, but it has been re­made in plas­tic, mag­ni­fied about 100 times its usual size and, on closer ex­am­i­na­tion, has the Taobao doll and dog mas­cot wo­ven into the aus­pi­cious fish sym­bol of abun­dance. The slo­gan on Lü’s other side, through con­trast­ing with the up­right Com­mu­nist slo­gans they’ve re­placed in both mes­sage and whim­si­cal bas­ket-weave de­sign, nonethe­less rep­re­sents the na­tion’s hopes for its coun­try­side writ­ten lit­er­ally on the vil­lage’s walls: “Go­ing away to roam—can’t beat do­ing Taobao at home.”

Wel­come to China’s new so­cial­ist coun­try­side. It’s splashed with cor­po­rate lo­gos and is a more or less a spon­ta­neous side ef­fect of the dig­i­tal rev­o­lu­tion, but to the Chi­nese lead­er­ship to­day, “Taobao vil­lages” like Beis­han speak to the suc­cess of a pol­icy long in the plan­ning. Speak­ing at the 2015 World Eco­nomic Fo­rum in Davos, Chi­nese premier Li Ke­qiang painted a com­pelling scene of one in­signif­i­cant vil­lage that could send “more than 30 mil­lion prod­ucts daily around the world” through the magic of e-com­merce, vin­di­cat­ing the ef­forts of the last 30 years of Chi­nese mar­ket re­forms.

How­ever, for most of those 30 years, the vil­lage it­self had been the af­ter­thought. As sym­bol­ized by the mil­lions of work­ers trav­el­ing home for the Spring Fes­ti­val, the by­word around the Chi­nese coun­try­side was “empty vil­lage”— bereft wealth, fu­ture, and even peo­ple, as its young and even mid­dle-aged res­i­dents left to seek op­por­tu­ni­ties in the cities, leav­ing just chil­dren and the el­derly at home. The con­cept of the “new so­cial­ist coun­try­side” first ap­peared in 2006 in the coun­try’s 11th Five Year Plan, as the au­thor­i­ties’ la­bel for their vi­sion of clos­ing the ur­ban-ru­ral development gap in­duced by mar­ket re­forms.

De­fined by Alibaba, Taobao and Tmall’s par­ent com­pany, a vil­lage is con­sid­ered a Taobao vil­lage if more than 10 per­cent of its house­holds are in­volved in e-com­merce and bring in a to­tal rev­enue of more than 10 mil­lion RMB per year. Though the phrase and its def­i­ni­tions were first published in 2013, there were sup­pos­edly al­ready 20 ex­tant Taobao vil­lages around China by that time; the first ones, Beis­han among them, had got­ten their start as early as 2006. As of 2016 the to­tal num­ber of Taobao vil­lages had in­creased ex­po­nen­tially to 1,311.

It’s not ex­actly clear how Alibaba orig­i­nally de­vel­oped those met­rics, and in Beis­han it­self there is some con­fu­sion about the per­cent­age of its 1,000 house­holds that are in­volved in e-com­merce—lü says there are “300 to 400 reg­is­tered stores, but a house­hold can own mul­ti­ple stores by reg­is­ter­ing one un­der the unique ID num­ber of each fam­ily mem­ber—it’s all free.”

Ul­ti­mately, it doesn’t re­ally mat­ter: Taobao vil­lages are

im­por­tant for their emo­tional and sym­bolic mean­ing as much as their ac­tual num­bers. Beis­han’s story be­gan in an al­most cliché fash­ion with what Chi­nese me­dia has dubbed the “pan­cake-to-taobao” nar­ra­tive of the vil­lage’s first e-com­merce en­tre­pre­neur Lü Zhen­hong.

Lü, as the story goes, was a mi­grant who made a liv­ing in var­i­ous Chi­nese cities sell­ing Jinyun’s fa­mous baked pan­cakes. In 2006, just three years af­ter Alibaba launched Taobao, he de­cided to open an on­line store sell­ing out­door equip­ment such as hik­ing and camp­ing gear. This al­lowed him to come home and take care of his par­ents. He tells TWOC that his early days of Taobao en­trepreneur­ship were “im­pro­vised”; he got into it be­cause a few friends had opened on­line stores and he chose out­door equip­ment be­cause it seemed like an in­ter­est­ing prod­uct cat­e­gory that could sell well.

How­ever, in the new fron­tier that was con­sumer-to­con­sumer e-com­merce in those days, there was ev­ery­thing to win for the en­tre­pre­neur who seized op­por­tu­nity at the right time. In 2008, Lü reg­is­tered his own out­door equip­ment brand, Bs­wolf; the BS stands for Beis­han. The com­pany brings in around 8 mil­lion USD in rev­enue each year. Ac­cord­ing to Lü Zhen­hong, many of his friends and neigh­bors in Beis­han got into e-com­merce when they be­came cu­ri­ous about what he and his fam­ily were do­ing. He then be­came the un­of­fi­cial ad­vi­sor as well as sup­plier for the vil­lage’s new batch of Taobao en­trepreneurs: be­sides get­ting point­ers from Lü on what to sell and how to sell, many in the vil­lage got their start on Taobao as dis­trib­u­tors of Bs­wolf prod­ucts, which they could ac­quire from Lü as or­ders came in, so as to re­duce over­head.

To­day, while some in the vil­lage con­tinue to act as Bs­wolf agents, others mer­chants have added prod­uct lines, reg­is­tered their own brands, or branched off to other prod­ucts in the broad “out­door equip­ment” cat­e­gory: fire­wood, bar­beque grills, and “wind blan­kets” for elec­tric scoot­ers. Whereas e-mer­chants used get their stock or­der-by-or­der from Bs­wolf be­cause they wor­ried it wouldn’t sell, now it’s be­cause their home-based busi­nesses have no stor­age space for the amount of or­ders they get.

This sce­nario is what Lü Yang refers to as the Beis­han Model, and the Jinyun County Youth League Com­mit­tee, the body that han­dles public re­la­tions for the vil­lage, pro­motes it on the na­tional stage as the “clas­sic model” of what a Taobao vil­lage ought to be: “It is an ex­am­ple of one home­grown en­ter­prise that stim­u­lated the econ­omy of a whole vil­lage; ex­ec­u­tives, lead­ers, and other en­trepreneurs are com­ing here to see how it works,” says Liu Yicheng, deputy sec­re­tary of the Youth League.

Hav­ing seen its suc­cess, Jinyun’s county gov­ern­ment in­vested money in im­prov­ing the area’s in­ter­net in­fra­struc­ture in ef­fort to keep Beis­han’s mo­men­tum go­ing. Across China, other lo­cal gov­ern­ments are in­vest­ing in rent-free ware­house spa­ces for their Taobao vil­lagers and as­sist e-busi­nesses with loan ap­pli­ca­tions, while even Alibaba has got­ten in on the ac­tion with “Taobao Univer­sity” train­ing cour­ses for new mer­chants. Lü Zhen­hong is now a ma­jor part of this ma­chine in his own vil­lage, as Jinyun’s Youth League also reached out to him to cre­ate in­tro- and in­ter­me­di­ate-level train­ing work­shops for would-be e-com­merce mer­chants, some of whom have never used a com­puter be­fore, as well as for “on­line store em­ploy­ees” rang­ing from cus­tomer ser­vice rep­re­sen­ta­tives to prod­uct pho­tog­ra­phers and web­page de­sign­ers.

Ac­cord­ing to Lü Yang, since 2014 there has also been a plan to re­place the cur­rent vil­lage gov­ern­ment build­ing

with an in­dus­trial park, which will pro­vide of­fice and ware­house space to the vil­lage’s ex­pand­ing en­ter­prises. In­tended to be fin­ished to co­in­cide with a visit from Alibaba founder Jack Ma, the project was put on hold when Ma’s travel plans changed.

For now the park is still just a se­ries of con­cept il­lus­tra­tions, which Lü Yang proudly in­di­cates on her of­fice wall. But she sud­denly grows wary, re­veal­ing that the vil­lage’s growth doesn’t come with­out mis­giv­ings. “Do you think it still looks like a vil­lage?” she asks. “See all th­ese build­ings at the en­trance, the ren­o­va­tion…it doesn’t look so dif­fer­ent from the town, does it? I won­der if that’s in­evitable as a vil­lage de­vel­ops.”


In the late 1970s, Cana­dian scholar Dal­las Smythe fa­mously wrote a memo to Chi­nese mar­ket re­form­ers ti­tled, “Af­ter Bi­cy­cles, What?” Orig­i­nally an ad­mo­ni­tion to the au­thor­i­ties to not ne­glect the con­se­quences of tech­nol­ogy to the po­lit­i­cal and so­cial or­ga­ni­za­tion of the coun­try, the ques­tion re­mains just as per­ti­nent to the story of the Taobao vil­lage. Ten years af­ter Lü Zhen­hong started his on­line store, four years af­ter the vil­lage’s first ap­pear­ance on CCTV News, it’s not just the build­ings that are evolv­ing away from the fa­mil­iar pat­terns of vil­lage life.

In com­par­i­son to ru­ral Taobao’s fron­tier days, when it was a rel­a­tively low-stakes gam­ble with po­ten­tially as­tro­nomic gains, “mak­ing it” in a ma­ture and com­pet­i­tive Taobao vil­lage takes as much com­plex ma­neu­ver­ing as in any metropoli­tan cor­po­rate econ­omy. Lü Lu­bin, a “post-1980s gen­er­a­tion” re­tailer of elec­tric scooter blan­kets, rat­tles off a litany of prod­ucts he used to sell but aban­doned for those with bet­ter re­turns: “fold­ing chairs, stoves, air mat­tresses, car seat cush­ions, car parts...i’m al­ways on the look­out for good prod­ucts, and I of­ten travel to Yiwu city to see what’s sell­ing at the ware­houses, see if I can spot an emerg­ing trend,” he says.

He also keeps dili­gent con­tact with other mer­chants across the coun­try through on­line fo­rums, swap­ping tips and alert­ing each other to po­ten­tial changes to the mar­ket. “It takes more dis­ci­pline and ef­fort than just re­selling camp­ing equip­ment; I used to sell that too.” E-mer­chants can also be vic­tims of their own suc­cess, ac­cord­ing to him. “Our man­u­fac­tur­ers see how well we’re do­ing and fig­ure they can also sell on­line and cut us out.”

Not ev­ery en­trepreneur­ship story ends in suc­cess, and Liu ad­mits that not every­body has the right com­bi­na­tion of abil­ity, re­sources, and cir­cum­stance to run their own busi­ness, de­spite the lure of suc­cess sto­ries and free-to-reg­is­ter stores. “It’s the rea­son [the county’s] train­ing work­shops are di­vided into ‘en­trepreneur­ship’ and ‘em­ploy­ment’ tracks. We make it clear that not ev­ery­one is go­ing to be suited to open­ing their own shop, but ev­ery­one can find some­thing for them­selves in the e-com­merce econ­omy,” he says.

This al­most ex­actly de­scribes the e-com­merce ca­reer of Huang, a cus­tomer ser­vice rep­re­sen­ta­tive at a Beis­han Taobao store, who took

the job af­ter his own store failed.


“It’s free to reg­is­ter a store, but with so many peo­ple do­ing that around the coun­try, it’s takes more than just hav­ing a prod­uct and putting it [on­line],” he says.“let’s say you type in the prod­uct name: There are more than 100 pages of re­sults. How do you make sure yours is seen?”

“It takes a spe­cial amount of strate­giz­ing, not to men­tion en­ergy, to con­stantly think of ways to make your­self seen. It’s tir­ing,” he adds, in be­tween typ­ing re­sponses to a cus­tomer’s in­sis­tent pings on Taobao’s in­stant mes­sag­ing sys­tem, an­other cru­cial av­enue for the mer­chant to stay ahead of the com­pe­ti­tion. The e-mer­chants TWOC spoke to all agree that the com­puter is never turned off, and they are avail­able to cus­tomers from 8 a.m. to as late as 1 or 2 a.m. ev­ery day if they have enough man­power for it—but even the smallest mom-and-pop op­er­a­tions rarely log off be­fore 11 p.m.

“We keep a phone by our bed. I’ve slept through it, but I’ll an­swer if I hear it, and a few times I’ve run down­stairs to the com­puter to han­dle prob­lems at night,” says Zhou, who sells air-mat­tress with her hus­band. “City folks work late, peo­ple sim­ply mes­sage you at 2 a.m.; what can you do?”

Al­ter­na­tively, money could get you the recog­ni­tion you need. Taobao is af­ter all a busi­ness, and you could pay to get your prod­uct put on side­bars or linked on other prod­ucts’ pages. Lü Zhouyang, a Bs­wolf agent and rel­a­tive of Lü Zhen­hong, says that his profit mar­gins are ac­tu­ally start­ing to shrink the longer he has been run­ning and try­ing to ex­pand his busi­ness. “The costs of those ser­vices are too high. It’s one of the big­gest pres­sures my busi­ness faces th­ese days,” he says.

Others gam­ble on a more so­phis­ti­cated but chal­leng­ing op­tion: tran­si­tion­ing from be­ing agents to brand own­ers. In 2009, an­other Lü, one of Beis­han’s first vil­lagers to em­brace e-com­merce, chose to de­velop a line of fold­ing chairs un­der the brand “Wild’s”on Alibaba’s busi­ness-to-con­sumer mar­ket­place Tmall af­ter three years on Taobao. “Com­pared to be­ing a Bs­wolf agent, I had to do a lot of pa­per­work, and in­vest money in ev­ery­thing from the busi­ness li­censes to get­ting my logo de­signed and printed, which not ev­ery­one can af­ford, and I def­i­nitely took a big­ger risk if the sales aren’t good and I don’t get a re­turn on my in­vest­ment,” she says. “I think it’s worth it, though—when you have your own brand, you stand out, and if you then fo­cus on hav­ing high qual­ity and in­no­va­tion to go with that, peo­ple re­mem­ber you.”

Lü also be­lieves own­ing a rec­og­nized brand will safe­guard her if ever the out­door equip­ment mar­ket shrinks, and in this sense the Taobao vil­lage is a mi­cro­cosm of the Chi­nese econ­omy, which on the whole has been try­ing to de­velop in­no­va­tion, qual­ity, and a fo­cus on orig­i­nal prod­ucts over the cheap knock­offs and low-skilled as­sem­bly work for which it is no­to­ri­ous. Taobao has been re­cently co-opted into the process, as au­thor­i­ties have tried to crack down on fake prod­ucts and en­cour­age e-mer­chants to im­prove their prod­uct qual­ity.

How­ever, those pres­sures had al­ready de­vel­oped or­gan­i­cally in Chi­nese vil­lages. Some com­mu­ni­ties that ex­pe­ri­enced a small re­nais­sance in the mar­ket econ­omy by be­com­ing clus­ters of small, home-based work­shops pro­duc­ing or as­sem­bling sin­gle types of prod­ucts—a com­mon eco­nomic struc­ture in de­vel­op­ing economies—are ex­pe­ri­enc­ing a sec­ond “hol­low­ing out” as their type of pro­duc­tion gets left be­hind by

the in­creas­ing tech­ni­cal demand of the Chi­nese and global economies. One ex­am­ple is South Da­hong­men Vil­lage, one of many “cloth­ing vil­lages” that used to pop­u­late Bei­jing’s Dax­ing district, whose econ­omy is now col­laps­ing as clothes-man­u­fac­tur­ers leave China for cheaper coun­tries to pro­duce in. Ac­tu­ally pop­u­lated by mi­grants who were lured in by cheap rents, res­i­dents of the vil­lage tells TWOC that not even two years ago, al­most ev­ery home had an “as­sem­bly” work­shop, which added but­tons and did other piece­work for clothes sold at the nearby Da­hong­men Whole­sale Mar­ket.

Now, says a but­ton-sewer sur­named Li, lo­cal restau­rants are fail­ing since the ma­jor­ity of res­i­dents have closed shop and left to “re­join” the mi­grant lifestyle. His next-door neigh­bor, Yu, is one of a few in the vil­lage who have turned to e-com­merce to sal­vage their liveli­hood, but this also en­tailed tran­si­tion­ing from a pro­ducer of “cheap” fin­ishes to a pro­pri­etor of his own prod­uct line. “I’ve changed to sell­ing suits that I make my­self, right here, and cus­tom uni­forms that com­pa­nies can or­der from me,” Yu says. “You make noth­ing th­ese days just fin­ish­ing some­one else’s prod­uct: Now, ev­ery­where, it’s all about in­no­va­tion.”

Beis­han also has a hand­ful of th­ese prod­uct-fin­ish­ing work­shops re­main­ing, usu­ally over­looked by me­dia and Alibaba’s as­sess­ments of the vil­lage econ­omy. Zheng, the owner of a work­shop that as­sem­bles and sells cheap plas­tic toys and backscratch­ers, also started a Taobao store, but ad­mits that her prod­ucts, as they cur­rently are, make neg­li­gi­ble re­turns on­line com­pared to whole­sale mer­chants. “The others, with their out­door equip­ment, that’s a big­ger prod­uct and their cus­tomers tend to have more, pay more; so they make more per prod­uct,” she says. “Mine are not worth much in­di­vid­u­ally; I don’t think the plat­form is re­ally suited to my prod­ucts.”


Lü Lu­bin tells TWOC, just off­hand, that Beis­han is no stranger to in­ter­na­tional me­dia at­ten­tion. Af­ter re­peat­ing the fact of CCTV’S four vis­its, he says we’ve been pre­ceded re­cently by a Ger­man re­porter, and be­fore him came China Daily and CNBC. Both have writ­ten glow­ing re­ports of how Taobao has trans­formed ru­ral liveli­hoods, and only slightly played up the jux­ta­po­si­tion be­tween rus­tic vil­lage life and the vil­lagers’ so­phis­ti­cated, tech­nol­ogy-driven, and far-flung busi­ness con­nec­tions. “Their ques­tions are more or less the same as yours: How did you get into e-com­merce, how did it change your way of life?”

What did it mean to tell the story of the Taobao vil­lage? It might be a story of op­ti­mism, as it is to Premier Li, per­haps min­gled with some awe and re­lief that an al­most un­fore­seen mir­a­cle of tech­nol­ogy could al­le­vi­ate one of China’s great­est eco­nomic and so­cial development headaches. It could be a story of DIY en­tre­pre­neur­ial spirit and in­creas­ingly cos­mopoli­tanism of a once com­mu­nis­tic and closed-off na­tion, as it is to many Western me­dia. It could even be a story that looks in­ward, as with many Chi­nese me­dia and re­searchers that have fol­lowed the lives of in­di­vid­ual vil­lagers, young peo­ple es­pe­cially, who have been able to leave be­hind the stress­ful life of mi­grant work to re­turn home, take of their fam­i­lies and “re­vive” the mil­len­nia-old fab­ric of tra­di­tional Chi­nese so­ci­ety.

Ul­ti­mately, it sig­nals a re­turn of the vil­lage and its peo­ple to the fore­front of the story of China’s development. Af­ter all, the e-com­merce vil­lage and its mer­chants were there long be­fore they were branded as Alibaba’s “Taobao vil­lages,” and the more things change, the more they also stay the same. Not ev­ery per­son in Beis­han is in­volved in e-com­merce, of course, and the el­derly in par­tic­u­lar are con­tin­u­ing to farm. Their at­ti­tudes to­ward e-com­merce are mixed, with one el­derly sweet-potato farmer sur­named Zhang say­ing that there’s no need to sell on­line “if you sell well enough in town,” as her pro­duce does.

On the other hand, Chen, who owns a lan­tern-mak­ing work­shop that is one of the re­main­ing pro­duc­ers of tra­di­tional hand­crafts in the vil­lage, and which is em­phat­i­cally not an

on­line busi­ness, has a more pes­simistic take: “Why think about e-com­merce if you can’t even run a phys­i­cal store well?”

Iron­i­cally, Bs­wolf ’s Lü Zhen­hong has the an­swer to this ques­tion. In 2009, his on­line busi­ness wellestab­lished, he opened a phys­i­cal store in the nearby town of Huzhen but later closed it be­cause the vol­ume of sales didn’t jus­tify the cost of up­keep. “We chose this prod­uct be­cause it sold well on­line, not be­cause it was pop­u­lar lo­cally,” he ad­mits. “Nowa­days in the vil­lage, we’re used to sell­ing as well as buy­ing things on­line, and it has re­ally changed the way we think about con­sumerism.”

On the other hand, Lü Lu­bin thinks the core of the Beis­han story is about peo­ple and their con­nec­tions, and in those cases it’s ac­tu­ally nei­ther a story of con­stancy or change, but the adapt­abil­ity of any­thing that’s re­ally cen­tral to the iden­tity of the vil­lage. He notes that he him­self never took any of the county’s classes and that most in the vil­lage still learn by help­ing each other. “There was a lot of ‘feel­ing the stones’ when we started out, and you can say we do that in col­lab­o­ra­tion. This whole place got started when we saw some­body we knew do­ing some­thing good.”

This is still the way that the vil­lage em­braces in­no­va­tion, car­ried over from those early days when e-com­merce was in its in­fancy and its fu­ture was theirs to de­fine. Then again, small com­mu­ni­ties and vil­lage en­tre­pre­neur­ial “clus­ters” have re­lied on net­works of fam­ily and neigh­bors to ob­tain re­sources, form bar­gain­ing blocs with sup­pli­ers, and act as la­bor force, in­for­ma­tion net­work, credit lender, fi­nan­cial and le­gal ad­vi­sor, and myr­iad other sup­port­ing roles that ur­ban busi­nesses take for granted.

As Lü steps out of his home of­fice to leave a Wechat voice mes­sage for what he says are ques­tions from a col­league he com­mu­ni­cates with on­line, the fun­da­men­tal ques­tion of the Taobao vil­lage story re­verses it­self: In the 10 years since e-com­merce ar­rived, is it the plat­form that changed the way we think about the vil­lage, or is it the other way around?

Items sold in bulk, such as th­ese backscratch­ers pro­duced in the vil­lage, bring dif­fer­ent re­turns on­line ver­sus off­line

Taobao-themed dec­o­ra­tions were added to the vil­lage as part of a drive to beautify the area

Hand­i­crafts and small man­u­fac­tur­ing work­shops still op­er­ate off­line busi­ness in parts of the vil­lage

Pack­ages from Beis­han vil­lage are sorted in the nearby town of Huzhen be­fore they are sent out to cus­tomers across China

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