JD eyes logistics for poverty alleviation
E-commerce giant to build brands for agricultural products in impoverished areas
The country’s second-largest e-commerce site JD will ramp up efforts to establish logistics facilities in impoverished areas and build brands for local agricultural products, said its chairman and CEO Liu Qiangdong.
In his proposal to the first session of the 13th National Committee of the Chinese People’s Political Consultative Conference, Liu, a member of the committee, called for promoting the large-scale production of agricultural products to increase competitiveness.
A long-acting mechanism for poverty alleviation should also be established, Liu said at a news conference on the sideline of the annual two sessions, adding that poverty alleviation could not be based on the thought of “wait, depend, and ask for.”
“The cost of logistics in rural areas is very high. About 60 percent of the agricultural product costs are on logistics and channels, and the final profit may be only 10 percent of the selling price. This situation must be changed,” Liu said.
Liu emphasized on strengthening the cultivation of agricultural product brands, and participation in the processing, brand packaging, logistics and marketing promotion of distinctive agricultural brands.
Liu also suggested enhancing the utilization rate of the cold chain storage and logistics facilities, as well as establishing the production standards and quality certification system for agricultural products.
The booming e-commerce sector is playing an important role in shaking off poverty in rural areas, as it can better bridge supply and demand with its technological and marketing advantages, and channel rural agricultural products directly to meet urban needs, according to Liu.
China will reduce the poor rural population by over 10 million in 2018, including 2.8 million people to be relocated from inhospitable areas, Premier Li Keqiang said while delivering the government work report at the first session of the 13th National People’s Congress.
JD has invested heavily in poverty alleviation. In January 2016, it signed a strategic partnership with the State Council Leading Group Office of Poverty Alleviation and Development. By the end of June 2017, it has helped 832 poor counties nationwide sell more than 3 million agricultural products online, with the sales revenue surpassing 20 billion yuan ($3.2 billion).
It is also developing cutting-edge technology solutions such as automated warehouses and unmanned aerial vehicles to cut logistics costs and increase efficiency in rural areas.
Liu was named honorary head of Pingshitou village in Fuping county, Hebei Province, one of the most impoverished areas in the country last year. He aims to have a tenfold increase in the village’s average household income within five years.
In January, JD planned to invest more than 20 billion yuan in Northeast China, comprising Heilongjiang, Jilin and Liaoning provinces, in the next three years, to promote local industrial upgrades, increase employment opportunities and inject technological innovation impetus.