The Hometown of Hickory Nuts Goes Online, Selling 1 Billion a Year

Whether in coastal regions or the western borderlands, the county-level economy is colliding and merging with e-commerce. E-commerce, represented by “Taobao”, is penetrating into the daily lives of residents in cities and counties in various ways, giving rise to new concepts such as the Top 100 E-commerce Counties or Taobao Villages. According to statistics, in 2013 the sales of agricultural products on Alibaba's various platforms reached 50 billion yuan, and in 2014 it is expected to reach 100 billion yuan.

In the area around Hangzhou, where Alibaba is headquartered, e-commerce is developing vigorously and has become an important part of the local economy. How did the local e-commerce economy develop? What role did the government play? A Huaxi Metropolis Daily reporter conducted an exclusive interview with Zhou Liankun, deputy mayor of Lin'an City.

Lin'an City is a county-level city under the jurisdiction of Hangzhou. At the first China County-Level Economy and E-commerce Summit, Lin'an City was awarded the title of “Top 100 Counties in China's E-commerce Development”, ranking 32nd nationwide and first among Hangzhou's five counties (cities). According to Zhou Liankun, Lin'an's online sales last year reached 1 billion, boosting farmers' income by 120 million.

Examples like Lin'an City are very common in China's southeastern coast. According to the “Brief Report on the Development of County-Level E-commerce in China”, by the end of 2013, China's e-commerce market transaction scale reached 10.2 trillion yuan, a year-on-year increase of 29.9%. Among this, the e-commerce scale in the southeastern coast and economically developed areas is relatively large, while the central and western regions have just started.

Huaxi Metropolis Daily reporters Luo Ti, Wang Jigao

Market Development

Villagers Open Online Stores and Get a Taste of Success

Next They Want to Sell Vegetables and Fruit

E-commerce can drive the integrated development of multiple industries. For example, when you buy hickory nuts online, tickets to local tourist attractions in Lin'an may be included in the delivery, thereby boosting Lin'an's tourism industry

Huaxi Metropolis Daily reporter: What are the characteristics of Lin'an's e-commerce economy?

Zhou Liankun: Lin'an's hickory nut output accounts for nearly 40% of the country's, and its processed nuts and roasted seeds also account for 30% nationwide. Starting in 2005, some villagers in the main nut and roasted seed production and processing areas of western Lin'an opened online stores to sell nuts and roasted seeds. After getting a taste of success, they attracted more villagers to “get online”. Last year, Lin'an's online sales reached 1 billion, boosting farmers' income by 120 million.

Huaxi Metropolis Daily reporter: After e-commerce developed, what benefits are there compared with the past?

Zhou Liankun: Lin'an is a mountainous city. Without e-commerce, its sales channels would be limited. Take hickory nuts as an example. Originally, the buyers were mostly consumers in the Yangtze River Delta region such as Shanghai and Hangzhou. After adopting e-commerce, customers from places like Xinjiang and Taiwan, China can also buy local hickory nuts from Lin'an. Next, we want to work on some of Lin'an's other fresh agricultural products, including our high-mountain vegetables and fruits. I think this market has great potential.

Huaxi Metropolis Daily reporter: What promoting effect does e-commerce have on Lin'an's overall economy?

Zhou Liankun: E-commerce can drive the integrated development of multiple industries. For example, when you buy hickory nuts online, tickets to local tourist attractions in Lin'an may be included in the delivery, thereby boosting Lin'an's tourism industry, including Lin'an's rural homestays.

I know a freelance photographer in the city who longed for rural life, so he went back to his hometown and renovated his old house. Once the house was built, he opened an online store. Selling what? Furniture, but he only needed one computer and worked alone. I asked him how much profit he made a year. The profit was relatively small, but he was living the kind of life he wanted, and he could also bring people around him to visit the countryside and experience rural life. I think this is also a trend.

E-commerce can also encourage college students to return home and start businesses. For example, in Lin'an's traditional nut and roasted seed processing enterprises, the owners' children can open online stores after graduating from college, combining with the family's offline business, so that the older generation and the younger generation complement each other's strengths.

From the development process of e-commerce, we also want to sum up some experience so that it can be expanded into other fields such as tourism, cultural creativity, and crafts. This is what we are exploring and figuring out in the next step.

Huaxi Metropolis Daily reporter: What are the main challenges in developing the e-commerce economy?

Zhou Liankun: Many villages have encountered bottlenecks. If they do not take the branding path, they may not be able to compete with others. We have one large operator who can do more than 10 million a year, but this year's year-on-year growth rate is not as high as last year's. In addition, in the past year or two, the threshold for opening online stores has become higher, and the costs have increased a lot compared with before.

Government Role

Three-Level E-commerce Network System

Helping Taobao Villages Solve Problems

Everyone knows e-commerce is very important. Many people are anxious, but they do not know how to do it. In this process, the government needs to build platforms to promote and popularize e-commerce

Huaxi Metropolis Daily reporter: For e-commerce operators encountering bottlenecks, how does the Lin'an municipal government give them a push?

Zhou Liankun: At the beginning, it was mainly a spontaneous market behavior, and the government was not very involved. But after developing to a certain stage, now one should be able to feel the visible hand of the government.

For the relatively mature Taobao villages, the government addresses the bigger problems they now face, such as warehousing, logistics, delivery, and food safety, by standardizing and upgrading them.

We have an e-commerce industrial park in the urban area. At the town and street level, Longgang Town in the western region has built the country's largest nut and roasted seed food city. At the village level, there are multiple specialized e-commerce villages. This has gradually formed a relatively complete three-level e-commerce network system of “urban area, town and street, village”, playing a very good role in clustering, guiding, and demonstrating.

Huaxi Metropolis Daily reporter: For e-commerce operators who have just entered the industry, what help can the government provide?

Zhou Liankun: Mainly to provide some public Internet services. From our visits, we have realized that the greatest need of villagers opening online stores is for basic technical issues, including how to do webpage design, operations, promotion, marketing, and so on. In the villages, we find leaders who do especially well in this area and have them take certain positions in industry associations to guide other farming households in this work.

In addition, at the municipal level, we have set up a public service center for e-commerce. This center brings together many third-party service providers to offer the services just mentioned.

Huaxi Metropolis Daily reporter: In many county-level cities across the country, e-commerce has just started. What should the government do first?

Zhou Liankun: There must be training. Now everyone knows e-commerce is very important. Many people are anxious, but they just do not know how to do it, and many traditional enterprises also need to update their thinking. In this process, the government needs to build platforms to promote and popularize e-commerce. This is the first priority.

Another part is to build platforms. Last year we successively opened the Alibaba Lin'an Nut and Roasted Seed Industrial Belt and the “Taobao Specialty China——Lin'an Pavilion”. The industrial belt attracted many nut and roasted seed processing enterprises to settle in, while the local pavilion mainly reflects the characteristics of local agricultural products. These two major platforms provide many nut and roasted seed enterprises and online stores in Lin'an with new channels for wholesale, retail, and display, greatly increasing their sales.