What to Do When Agricultural Products Don't Sell? E-commerce Helps Resolve Sales Difficulties
The rural market, with its diverse consumer demand and enormous potential, has long been regarded as the blue ocean for Chinese e-commerce. The problem of unsalable agricultural products is a longstanding issue, mainly due to farmers' excessively high expectations for agricultural product prices, combined with the lagging development level of local rural e-commerce and farmers' lack of knowledge about selling agricultural products online. Relevant personnel suggest that in order to minimize the impact of large price fluctuations of agricultural products on farmers' incomes and help farmers maintain reasonable expectations for agricultural product prices, multiple policy measures including support for rural e-commerce talent training should be introduced, and greater attention should be paid to the development of rural e-commerce.
Crisp Pears Stored in Cellars Face the Predicament of Being Unsalable
Qian County is located north of Xianyang City in Shaanxi Province, and various seasonal and seasonal fruits including apples, crisp pears and peaches are the local characteristic advantageous industries.
When reporters recently interviewed at Shanglumo Village, Yanghong Town, Qian County, many pear farmers reported to reporters that since last winter up to now, crisp pears that previously fetched good prices and sold smoothly have encountered obvious difficulties in selling, and in Shanglumo Village alone, millions of jin of crisp pears are “desperately waiting for buyers.”
Villager Liang Zhanming said that in 2013, his 18 mu of pear orchard produced a total of more than 80,000 jin of crisp pears, and merchants from Guangdong, Guangxi and other parts of the country bought all of these pears before the New Year at prices of 2.2 yuan to 2.4 yuan per jin, and from selling pears alone, his family's gross income last year reached about 170,000 yuan. “In 2014, because the pear blossoms suffered frost damage and there was severe drought at the turn of spring and summer, it was an ‘off year’ for pear trees, and only more than 50,000 jin of crisp pears were harvested. As few merchants showed interest, all these pears were stored in the family's pear cellar and basically none were sold. And before the New Year, the price of crisp pears also dropped to 1.28 yuan to 1.33 yuan per jin, a considerable decrease compared with 2013.”
Qiao Bin, deputy mayor of Yanghong Town, said that the crisp pear planting area in Yanghong Town is around 5,500 mu, and the 2014 crisp pear output reached more than 15 million jin. After early-stage sales, there were still 4 million jin of crisp pears waiting for “buyers” in pear cellars, and this year's sales did indeed encounter some difficulties.
Rural E-commerce Development Lags Behind
During interviews in Shanglumo Village, reporters found that the reason for the unsalable crisp pears this year is directly related to farmers' excessively high expectations for pear prices after having made their fortunes from crisp pears in recent years. The obviously lagging development of rural e-commerce locally is the “underlying reason” for farmers' unreasonable expectations regarding agricultural product prices.
During interviews in Shanglumo Village, reporters found that the vast majority of pear farmers in this village still limited their form of selling crisp pears to “waiting for customers to come to the door,” lacking the awareness and practice of actively reaching out to promote crisp pears, and modern agricultural product sales methods such as e-commerce sales were even more of a “blank slate” in farmers' minds. Because there was no channel to obtain crisp pear price information through e-commerce, many farmers misjudged the sales situation and sales prices of crisp pears, thus causing the unsalable situation. Therefore, accelerating the construction of county-level agricultural product e-commerce sales platforms is an inevitable way to avoid “low prices hurting farmers.”
Advancing Rural E-commerce Development Through Multiple Measures
Grassroots agricultural department heads and university experts in the e-commerce field interviewed by reporters said that China's e-commerce is currently developing rapidly, and rural e-commerce has broad development prospects within it. They suggest that relevant government departments introduce measures to help rural e-commerce adapt to the needs of the situation and develop rapidly.
Wei Yan'an, director of the Rural Youth Work Department of the Communist Youth League Shaanxi Provincial Committee, who has long been engaged in rural e-commerce research, said that rural e-commerce has shown an explosive growth trend since 2009. By 2013, on the Taobao and Tmall platforms alone, parcels sent from counties reached 1.4 billion pieces, and there were more than 2 million online stores registered in rural areas on Taobao and Tmall. “The recently jointly released ‘Brief Report on County E-commerce Talent Research’ by the Ali Research Institute and Taobao Business School points out that in the next two years, the demand for e-commerce talent by county-level online merchants will exceed 2 million people. Against the current background of rural youth returning home to start businesses, relevant national departments can consider combining farmer training and education with e-commerce development, using various means and methods such as professional farmer training and college student entrepreneurship training to accelerate the cultivation of rural e-commerce talent.”
Wei Yan'an said that in the development of rural e-commerce, the following prominent problems still exist:
First, the problem of awareness. He said that concepts such as Internet thinking, e-commerce philosophy and micro-marketing that have already become commonplace in cities are still new things in rural areas to this day, and even some county and township cadres have insufficient understanding, knowing at most that opening a Taobao store is e-commerce, and there is still a considerable distance from the true concept of e-commerce. Those pioneers in the rural e-commerce field also often fall into misconceptions in two directions: either they regard e-commerce as an independent industrial form and develop e-commerce for the sake of e-commerce, not closely combining it with the real economy, ultimately making it water without a source; or they regard e-commerce as an ordinary marketing method and operate it as a new channel, ignoring integration with existing industries, and as a result cannot stand alone.
Second, the policy problem. Wei Yan'an said that for agriculture to develop, first it relies on policy, second on investment, and third on science and technology. This saying also applies to the development of rural e-commerce. In developing e-commerce in rural areas where development obviously lags behind cities, government action is very important, and this is also the common experience in developing county e-commerce in various places. At present, in the development direction of rural e-commerce, many places are still stuck in platform thinking, wanting to spend great effort building their own platforms at every turn, spending a lot but with poor results. In fact, it is more realistic to honestly build incubation platforms. In addition, everyone now often places the focus of support on e-commerce parks and enterprise investment attraction, paying insufficient attention to grassroots e-commerce entrepreneurship. It is very difficult to get a loan to open an online store or enjoy some policies, and the “ant army” trend of e-commerce entrepreneurship cannot be formed. The construction of the e-commerce soft environment has not kept up, supporting services cannot keep pace, and the e-commerce economy is very fragile.
Third, the logistics problem. Wei Yan'an said that many people want to do rural e-commerce, but few truly get moving. The reason is that logistics is a major bottleneck. To develop e-commerce in rural areas, the current delivery cost is very high, especially in non-plain areas, where the cost is several times higher than in cities and still inefficient. Second, return trips are seriously empty-loaded, which in turn raises logistics costs. “Relevant government departments should attach importance to building the industrial chain including communications, logistics, packaging and processing. Large enterprises should be introduced, and small entrepreneurial online stores should also be supported. Through measures such as highlighting local characteristics, strengthening agricultural product brand building and supporting county-level e-commerce development platforms, the rapid development of rural e-commerce should be promoted.”
Li Qi, an expert on the E-commerce Expert Advisory Committee of the Ministry of Commerce, said that the rapid development of rural e-commerce is a good opportunity for solving the problem of unsalable agricultural products. “At present, the agricultural products produced in some rural areas of China are still primary raw materials, and their packaging and specifications are often relatively simple. However, ‘online goods’ sold through e-commerce channels require fine packaging and processing. From agricultural products to processed products and then to online goods, this is a key link in raising the prices of agricultural products, and relevant government departments need to train farmers in this regard. In addition, for the rapid development of rural e-commerce, departments such as commerce and agriculture should also strengthen research, formulation and implementation of rural e-commerce policies, so as to truly use industry to support agriculture and cities to support agriculture.”
Regarding the construction of rural logistics platforms, Li Qi said that limited by conditions, rural logistics costs are often relatively high, and the last-mile problem of agricultural products and related manufactured industrial goods “being unable to get out or get in” is quite prominent in rural areas. At present, China Post has already established a relatively complete mail delivery network nationwide, and it is suggested that government departments can use postal services as a logistics platform for the rapid development of rural e-commerce, while also promoting the rapid development of rural e-commerce through the drive and guidance of leading enterprises and farmers' professional cooperatives.