How can rural e-commerce develop steadily and achieve profitability?

With the widespread popularization of the Internet and the promotion and use of Internet of Things technology, following the rise of urban e-commerce in China, rural e-commerce is developing at a rapid pace.

According to the "2014-2015 China Agricultural Products E-commerce Development Report," in 2014 China's agriculture-related e-commerce enterprises reached 31,000, of which 4,000 were agriculture-related trading e-commerce businesses, forming a market structure of "two superpowers, many strong players, and a niche market." Among them, the "two superpowers" made up of Alibaba and JD.com occupied the main share, while in recent years some emerging agricultural product e-commerce companies, after obtaining capital injections, have also formed their own distinctive development models. According to statistics, the sales of agricultural products on the Alibaba platform grew from 3.7 billion yuan in 2010 to more than 80 billion yuan in 2014, with an average annual growth rate of 112.15%. As for fresh food e-commerce on Taobao, in 2013 the national fresh food e-commerce transaction scale reached 13 billion yuan, a year-on-year increase of 221%, and it was expected to reach 26 billion yuan in 2014.

Regarding the development of rural e-commerce, some people believe it is like the spring thunder of May: it comes quickly and goes quickly. According to statistics in the "Report," at present only 1% of domestic agriculture-related trading e-commerce businesses can be profitable, 7% have huge losses, 88% have slight losses, and 4% break even. Regarding the problems existing in China's agricultural product e-commerce, the famous scholar Hong Tao believes that the serious homogenization of e-commerce website construction has led to disorderly competition, operating at a loss, and even the coexistence of website building and website closure.

The characteristics of the Internet, such as freedom, openness, equality, free access, interactivity, cooperation, individuality, virtuality, continuity, and globalization, determine that in the new era of continuously developing informatization, e-commerce is closely related to people's work and life.

The widespread application of the Internet in rural areas has further promoted revolutionary changes in the production and marketing of agricultural products. In the past, rural residents' self-sufficient and closed business state of "only caring about planting, not about selling, only burying themselves in production, not about the outside world, only caring about food and clothing, not about prosperity" is quietly changing.

With one optical fiber, one computer, several cameras, and other equipment, sitting at home in the countryside, one can send out sales information for agricultural products for people all over the world to know. Even consumers who are tens of thousands of miles away can follow the clues and buy their desired agricultural products at any time.

Why is it that rural e-commerce, which appears simple, has so few profitable agriculture-related trading e-commerce businesses, and the scope of losses exceeds people's expectations?

From an analysis of the current operation of agriculture-related trading e-commerce, the main reasons lie in "commonality, homogenization, and miscellaneous branding."

Commonality makes it so that although the agricultural products sold through e-commerce are dazzling and varied, it is difficult to find the personalized products consumers need; homogenization makes it so that the agricultural products sold through e-commerce all look familiar, yet differentiated goods that consumers need are nowhere to be found; miscellaneous branding makes it so that although there are thousands upon thousands of agricultural products sold through e-commerce, strong-brand agricultural products that consumers need are mixed in with inferior ones.

For rural e-commerce operators to develop steadily and obtain the best economic benefits in the fiercely competitive market economy, they must work on "personalization, differentiation, and branding."