How to open up the last mile of rural e-commerce

Rural areas themselves are vast and sparsely populated, scattered in distribution, and difficult to consolidate goods for distribution. Building a sound logistics system has become an important aspect of competition among major e-commerce platforms and express delivery companies for the rural market.

Policy measures are needed to solve what individual e-commerce enterprises previously wanted to do but could not do well, and to break through the institutional and mechanistic obstacles to the development of agricultural e-commerce.

This year's "Double 11," Alibaba's first Rural Taobao delivery was made in Zhongyize Village, Miyang Town, Mile City, Yunnan Province. The pressure cooker selected by the villager took less than 1.5 hours from placing the order to signing for receipt. While the buyer was still asleep, the rush-purchased product had already been quietly delivered by Dongjun Logistics, a Cainiao Network rural logistics partner, to the village Taobao service station at the doorstep.

Along with the boom in online shopping, "marching into the countryside" has become an important business strategy for today's e-commerce enterprises. Rural e-commerce has begun to become a new battleground. Data released by Alibaba for the 2016 "Double 11" show that there were nearly 20,000 Rural Taobao points nationwide, covering 425 counties, and 5 million villagers purchased 11.5 million kinds of goods. Driven by the market, large enterprises such as Alibaba, JD.com, and Suning entered rural areas, and rural e-commerce increasingly presented a pattern of "two superpowers, multiple strong players, and one large expanse."

Although rural e-commerce has encountered unprecedented development opportunities, the current relatively backward logistics industry has become a major obstacle to the development of rural e-commerce. Hong Tao, director of the Institute of Business Economics at Beijing Technology and Business University, said that some rural areas are located in remote places, logistics development is obviously lacking, and preservation technology, storage capacity, and distribution strength vary unevenly, especially cold-chain logistics capacity is insufficient.

The "last mile" problem has become a major difficulty standing in the way of express delivery going to the countryside and e-commerce sinking to the grassroots. At the same time, the realities of rural areas themselves, including vast and sparsely populated land, scattered distribution, difficulty in consolidating goods for distribution, and empty return trips, are hard to change in a short period. For this reason, building a sound logistics system has become an important aspect of competition among major e-commerce platforms and express delivery companies for the rural market.

How exactly should the "last mile" of rural e-commerce be traveled? "More and more new farmers' expectations for logistics timeliness have begun to move closer to those of cities," said Xiong Jian, general manager of Cainiao Network's rural business unit. Through big data forecasting, home appliances, agricultural materials, and farm tools that better match rural purchasing habits can be pushed down in advance to county-level warehouses, achieving 50% same-day delivery and 100% next-day delivery. Big-data-supported advance inventory sinking can help numerous merchants respond more quickly to market demand and shorten the time goods spend in transit.

Data show that at present several major domestic express delivery leaders have completed network coverage of more than 80% at the county level, and a four-tier service network has begun to take shape, laying the foundation in advance for rural e-commerce's next explosive growth point. In addition to the continuously increasing outlets of private express delivery companies, China's postal service system is also constantly improving. In 2015, the number of nationwide postal universal service business outlets reached 53,000, and village postal stations reached 210,000, generally realizing "a post office in every township and postal service in every village."

In addition, many places across the country have successively created new models and new methods, such as the Zhejiang Suichang Ganje model and the Tianjin township station model, seeking to solve the problem of e-commerce entering villages. At the beginning of this year, when a reporter from Economic Daily interviewed in Suichang, Zhejiang, they learned that a "Ganjie.com" model was very popular among farmers. In each village, service stations were established relying on commercial shops or clinics, computers were provided free of charge to the service stations, and cooperation with telecom operators was used to solve the internet access problem. At the same time, part-time station attendants were trained in each village, and through a rebate model young people helped villagers make purchases on Ganjie.com.

"At the beginning of the model, most rural areas in Suichang had no express delivery," said Pan Dongming, head of the Suichang Online Store Association. To solve this problem, the online store association and relevant departments jointly built a logistics system from Suichang county town to each village, at 4 yuan per order, arriving in one day. Every day, the first thing outlet staff do when they get to work is register the express deliveries that arrive at the outlet, and then notify villagers to come and collect them. Similarly, if villagers have items to send out, they only need to hand them over to the village "Ganjie" outlet.

How can "agricultural goods going to the city" and "online goods going to the countryside" be combined across a wider range of rural areas? Wang Xiaobing, deputy director of the Market and Economic Information Department of the Ministry of Agriculture, said that policy measures are needed to solve what individual e-commerce enterprises previously wanted to do but could not do well, and to break through the institutional and mechanistic obstacles to the development of agricultural e-commerce. For example, rural logistics distribution and other matters need to be advanced as a whole within the county scope in order to reduce costs. In addition, preferential support measures for land use, electricity use, and network use that e-commerce has long awaited must also be implemented as soon as possible.