New Opportunities for Rural E-commerce Development in China
Wen Tingting, a resident of Anyue County, Sichuan Province, runs a decoration shop in the county town with her husband. She has now become one of JD.com's first batch of rural promoters in Anyue County. Earlier this year, the first batch of JD county-level service centers in Southwest China opened in Anyue County and Yilong County. This is China's first batch of self-operated county-level service physical stores for e-commerce, and Wen Tingting was the first customer of this service center.
It is understood that JD.com is establishing rural agency points such as "county-level service centers," which have now covered 5,000 villages. This year, JD.com's goal is to extend its services to tens of thousands of villages, and in the next three years it plans to cover 80% of China's villages. The village-level agency points require finding people familiar with the local area to serve as agents.
Liu Qiangdong, founder and CEO of JD Group, recently returned to Suyu District, Suqian City, Jiangsu Province, his hometown, and visited "JD Service Centers" in several villages to lend his support to the strategy of "deepening the rural market and promoting rural e-commerce." This move is regarded by the industry as an important manifestation of JD.com's rural e-commerce strategy.
On the other hand, Alibaba Group has launched its rural strategy, the "Thousand Counties and Ten Thousand Villages Plan," and will invest 10 billion yuan over the next three to five years to establish 1,000 county-level operation centers and 100,000 village-level service stations. At present, "Rural Taobao" has entered 8 provinces, autonomous regions and municipalities across the country, covering 13 counties and 295 villages.
According to Alibaba's plan, the key focus of its agriculture-related e-commerce business is "bringing online goods to the countryside" for farmer consumers and "bringing agricultural products to the cities" for urban consumers.
At present, e-commerce giants such as Alibaba and JD.com are expanding their territory in the rural e-commerce sector, and rural e-commerce in China has ushered in new development opportunities. At the Boao Forum for Asia Annual Conference 2015, many attending guests believed that 2015 may become the "year of enlightenment" for China's rural e-commerce, and that rural e-commerce is about to meet a new "outlet."
"The logistics cost of rural e-commerce is relatively high, and we are adopting model innovations," Liu Qiangdong said in an interview with Xinhua News Agency reporters during the Boao Forum for Asia Annual Conference 2015. He stated that rural e-commerce work is being vigorously promoted, the prototype of the logistics system is taking shape, and it may use local resources and existing rural transport tools to reduce costs; even rural hand tractors can be incorporated into the logistics system.
Liu Qiangdong believes that the current share of rural e-commerce is still relatively small. At present, the gradual reduction of urban costs is being used to subsidize rural logistics costs, and once the system takes shape, the overall cost will come down.
Jin Jianhang, president of Alibaba Group, also stated that Alibaba is stepping up cooperation with express delivery companies that have rural distribution capabilities, in order to solve the "last mile" delivery problem as quickly as possible.
Some experts point out that rural e-commerce and new-type urbanization are a mutually reinforcing development process. As China's urbanization process accelerates, more consumption potential will be released. Strengthening the information highway construction of small and medium-sized towns, increasing broadband frequency and access bandwidth in small and medium-sized towns and rural areas, improving network quality, and accelerating internet popularization and application are relatively easy, and will bring huge development space for rural e-commerce.
Precisely because of these multiple favorable factors, e-commerce companies are testing the waters in the agricultural products sector one after another. For example, Alibaba plans to invest 10 billion yuan in the e-commerce of agricultural products over the next three to five years, and the plan is expected to cover 1,000 counties in China.
Through the construction and operation of e-commerce platforms, agricultural product transactions can not only achieve services such as promotion, trading and customer service on the internet, but also complete market research through the use of big data, enabling agricultural product operating enterprises to better formulate their development goals. At the same time, through the rapid development of e-commerce, industries related to agricultural product sales, such as finance and logistics, can also develop, accelerating the process of agricultural modernization.
Liu Qiangdong said that the existence of the commercial gap between urban and rural areas has made rural prices consistently higher than urban prices in the past. With the development of rural e-commerce, this phenomenon will eventually be balanced, achieving consumer fairness.
In addition, rural e-commerce also coincides with the entrepreneurship of returning college students. With the popularization of the internet and the development of logistics and express delivery, e-commerce can help disadvantaged areas in western China leverage their resource advantages and achieve leapfrog development. In this process, the group of returning college students can use their wisdom and strengths to make a difference in the upsurge of e-commerce entrepreneurship.