Rural e-commerce faces the dilemma of logistics losses reaching 30% and lagging support services
Logistics losses for agricultural products reach 30%; chaos abounds in the training segment
Support is “crippled”: entrepreneurship has a path, but implementation has no door
Reporters from Economic Information Daily recently conducted surveys in some rural areas of Jiangsu, Hubei, Guangxi, Hainan and other places and learned that at present, rural e-commerce plays an important role in unblocking sales of agricultural products, increasing farmers' income, and prospering the rural economy. However, it should also be noted that rural e-commerce is still in its initial stage and faces multiple dilemmas such as shortages of people, money, and support services, especially in infrastructure construction, competitiveness building, entrepreneurship platform construction, the logistics system, and related training, where many shortcomings still exist. Among them, regarding logistics, some experts have said that the average loss rate in the logistics segment for agricultural products in China is 30%, while in developed countries such as the United States and Japan it is 3%, or even lower, a difference of as much as ten times.
Support services lag; chaos abounds in training
As rural e-commerce increasingly grows, some places are gradually establishing support systems, but overall, lagging support services for rural e-commerce, high transportation costs, and insufficient training or chaos in training are relatively common problems reported in many areas.
“I feel like I was cheated. Not long ago, I attended e-commerce training organized by a company. On the second day, they helped register a website. I paid 21,000 yuan by card at the time. More than a hundred people attended, all bosses like me who were eager to do e-commerce.” said Liu Shiyong, chairman of the Liugang Rice Planting Cooperative in Luodian Town, Jingshan County. In addition, some people reported that some e-commerce training only creates a webpage and is not a sales platform at all, and does not establish an upstream and downstream industrial chain.
Some grassroots cadres reported that at present agricultural laborers are generally older and relatively less educated, lack e-commerce knowledge and operational skills, and developing e-commerce faces talent gaps to varying degrees in positions such as marketing, operations, and design. The e-commerce sales platforms of Guobao Qiaomi and Jinghe Rice Industry in Jingshan, Hubei, are located in Wuhan rather than Jingshan, mainly because Jingshan lacks talent.
An agricultural official in Jintan, Jiangsu, said that rural entrepreneurship training is scattered across many departments, including agriculture, science and technology, civil affairs, human resources and social security, the Communist Youth League, the Women's Federation, the Federation of Industry and Commerce, and so on, and is in a chaotic state of “nine dragons not governing the water.” Departments and bureaus in counties and cities all have some funds and projects, and they each run their own part in farmers' entrepreneurship training. The level of the people invited to lecture varies greatly, some spent money but achieved little effect, and no entrepreneurship training platform with real influence has been established.
“Some farmers heard merchants say that there is a kind of crape myrtle flower that can bloom in seven colors, and many villagers believed it and also posted this information on websites. After many customers bought it and discovered the problem, they complained on the websites.” Li Yanchun, Party branch secretary of Yanxia Village, Yanji Town, Shuyang County, Jiangsu, gave this example and said that this not only affected buyers, but also affected the group of flower farmers, and even damaged the image of a region. Reporter surveys learned that some farmers sometimes sell fake products for short-term gain. How to combat the sale of fake products through online and offline coordination needs attention.
Network foundations in some areas are backward, and support services lag. “Backward infrastructure is obvious in the central and western regions, mainly due to poor network operation quality, high telecommunications costs, and no network coverage in some remote rural areas.” said a relevant person from the Jingshan County Commerce Bureau.
At the same time, with the efficient operation of e-commerce, it is increasingly inseparable from coordinated support from e-commerce services such as express delivery, warehousing, operations, and parks. Many places reported that e-commerce lacks a unified service platform and cannot provide online merchants with one-stop services such as consulting and warehousing. This is specifically reflected in high service fees, low service efficiency, and service gaps, such as relatively high express delivery fees, relatively slow delivery, and few related operational services.
Transportation costs remain high
Logistics losses for agricultural products are severe
The development of agricultural product logistics is relatively lagging, which not only weakens the market competitiveness of agricultural products, but also becomes a bottleneck in the entire circulation system. Chen Wenling, chief economist of the China Center for International Economic Exchanges, once said that the average loss rate in the logistics segment for agricultural products in China is 30%, while in developed countries such as the United States and Japan it is 3%, or even lower, a difference of as much as ten times.
Wu Jianqiang, director of the Information Center of the Jiangsu Provincial Agriculture Commission, and others said that compared with urban e-commerce and industrial product e-commerce, most rural logistics terminals currently do not reach villages. In addition, agricultural product logistics requires high speed or the use of preservation technology, resulting in more losses and relatively high logistics and transportation costs, which hinders the development of agricultural product e-commerce.
Relevant experts and industry insiders suggested laying out the construction of a large logistics system for agricultural products from three aspects.
The government should build service platforms and reduce direct leadership behavior. Zheng Fengtian, a professor of agriculture at Renmin University of China, said that relevant national departments have successively carried out many rural logistics projects in previous years. The Ministry of Agriculture, the Ministry of Commerce, the Ministry of Industry and Information Technology, and the supply and marketing cooperatives all have specific projects, such as supermarkets going to the countryside, the Ten Thousand Villages and Thousand Townships project, and cold chain logistics planning, but overall the results have not been great. There are two main reasons. First, rural areas are too scattered, resulting in very high construction costs for the logistics system, and neither the government nor enterprises have enough funds to invest. Second, government-led logistics system construction is relatively inefficient. A simple example is that postal express charges are clearly higher than those of Taobao and JD.com.
Zheng Fengtian gave an example, saying that the small commodity express delivery system in Yiwu, Zhejiang, has developed rapidly in recent years, providing customers with diversified services, and various logistics and express delivery enterprises have also achieved rapid development. This is because the government created a platform for the development of the logistics industry and provided various services needed by enterprises, but the government did not directly lead industrial development; instead, the market led the industry's development. He suggested that the government should create a good platform for the development of the logistics industry, especially targeting the industrial characteristics of agricultural product logistics, carry out pledge financing such as movable property, warehouse receipts, shop operating rights, and lease rights, and expand financing channels to accelerate industry development.
Relevant people from some leading agricultural enterprises and specialized cooperatives said that now large cities all have logistics parks, but in rural areas it is very difficult to find construction land for building a warehouse, and grassroots governments also lack relevant policy support. Dongfang City in Hainan Province is one of the largest production areas for winter corn in China. Several large local corn growers reported that they hoped to build an ice factory near the production area for storing fresh corn, but even after the vice mayor in charge coordinated several times, they still could not obtain an industrial land quota. “The lack of cold chain logistics facilities in rural areas is an important factor causing sharp fluctuations in the prices of agricultural products.”
Encourage large circulation enterprises and large e-commerce enterprises to extend their business networks to rural areas. For capable leading enterprises such as Taobao and JD.com, they should be encouraged to accelerate the construction of rural logistics systems. At the same time, support small and medium-sized logistics enterprises, especially micro and small enterprises, in developing in a specialized and distinctive way, or form large enterprise groups through mergers, restructuring, acquisitions, and controlling stakes. Create agricultural logistics demonstration bases and promote the establishment of close interest linkage mechanisms between logistics enterprises and farmers.