Can a single network cable really connect urban and rural markets?
"If you want a good life, hurry up and get on Taobao." Data from the Ministry of Commerce shows that in the first half of this year, rural online retail sales exceeded 310 billion yuan, and nationwide online retail sales of agricultural products reached more than 56 billion yuan. Faced with this market of unlimited potential, rural e-commerce has become a new outlet pursued by many entrepreneurs.
Recently, at the National "Internet+" Modern Agriculture Work Conference and New Farmers Entrepreneurship and Innovation Conference held in Suzhou, Minister of Agriculture Han Changfu pointed out that one of the breakthroughs in advancing "Internet+" modern agriculture is to promote agricultural e-commerce so that good products can sell at good prices.
But when the internet collides with agriculture, the most traditional industry, it sparks innovation while also facing many problems. How can entrepreneurs standing at the outlet ride the wind and fly higher?
What is still missing after an online store is built?
"Difficulty in selling" has eased somewhat, but pain points such as logistics remain
Liu Chuanjun, a graduate of the University of Chinese Academy of Sciences majoring in space physics, did not continue to look up at the starry sky. Instead, he chose to face the yellow earth and, without hesitation, embarked on the entrepreneurial path of agricultural product e-commerce.
His firm determination came from deep affection for rural areas. Liu Chuanjun, who grew up in the countryside, said rural areas do not lack high-quality agricultural products, but good things cannot sell at good prices. The agricultural product logistics chain has five or six links, agents earn nearly 80% of the profit, and farmers are at the bottom of the industrial value chain. In 2014, he founded the vegetable e-commerce company Meicaiwang, dedicated to providing fresh vegetable delivery for small and medium-sized restaurants. While helping farmers connect production and sales, it simplifies the circulation links of agricultural products to the greatest extent, increases farmers' income, and also lowers restaurants' raw material costs.
Finding a market is only the first step. The key is how to deliver agricultural products in time. Liu Chuanjun admitted frankly that for e-commerce specializing in fresh agricultural products, the way to survive is fast transportation and high product quality, which must rely on a developed logistics system. In the early days of the startup, Meicaiwang cooperated with several express delivery companies, but none could meet the requirements for speed, quality control and loss rate.
With no other choice, Liu Chuanjun could only build his own cold-chain logistics system. He said the cost of fresh cold-chain logistics is 1-2 times higher than ordinary logistics, and cold-chain costs account for 25%-40% of sales. Adding cold-chain equipment, operation and maintenance, the burden is quite heavy. "We hope to increase policy support such as fiscal and tax measures to appropriately reduce the burden on the cold-chain logistics industry. At the same time, improve the scale and intensification of cold-chain transportation and develop third-party cold-chain logistics."
Logistics is the pain point of rural e-commerce. Wang Ke is the director of rural logistics business at Cainiao Network. He is often asked by farmers, "How can we sell our good products?" Wang Ke said that how to transport good agricultural products to the market is also a major problem for rural e-commerce. On the one hand, logistics networks have not yet covered many rural areas, and there are obstacles in both the downward flow of consumer goods and the upward flow of agricultural products. On the other hand, the level of logistics facilities is low and cannot meet the transportation needs of fresh agricultural products.
Some large e-commerce enterprises have begun to lay out rural logistics. Alibaba launched the Thousand Counties and Ten Thousand Villages Plan, investing 10 billion yuan within three to five years to establish 1,000 county-level operation centers and 100,000 village-level service stations. Suning, through more than 1,600 direct-sale stores, has opened up the last mile of rural market services, and more than 90% of areas have achieved next-day delivery. JD.com has built advanced multi-temperature cold storage in 10 cities across the country, covering 63 large and medium-sized cities.
The government level is also promoting this. The Ministry of Agriculture organized new-type agricultural business entities to connect with e-commerce platforms, carried out fresh agricultural products entering cities in 10 provinces, and supported the construction of infrastructure such as graded packaging and cold-chain logistics. Vice Minister of Commerce Gao Yan introduced that in the first half of 2016, a total of 9.6 billion yuan of national special construction funds was used, driving 160 billion yuan of social funds, to support the construction of 182 agricultural product wholesale markets and cold-chain circulation facility projects. At the same time, it organized cooperation among large e-commerce companies, agricultural production and circulation enterprises, and local governments to promote the upgrading of traditional rural circulation channels.
What is needed to do rural e-commerce well?
Enthusiasm is needed, but there is also a need to better understand rural areas and agriculture
Lu Man from Jiangsu had always followed the traditional "winner" trajectory: after graduating from university, she entered a state-owned enterprise with good benefits, until she followed her boyfriend to Chenjia Village, Gaozuo Town, Jianhu County, Yancheng, to start a business. Her parents strongly opposed it, and the surrounding villagers also believed they had returned only because they could not make it in the city. But the young couple had their own ideas. "We hope to make youth different, and even more, we hope to lead our fellow villagers to become rich and change the face of rural areas."
The ideal is plump, but reality is bony. On the entrepreneurial path, they encountered many difficulties. First, they suffered a setback in funding. In the early days of the startup, they tasted all the bitterness of borrowing money everywhere but failing to get any. They also encountered trouble in breeding. They tried many breeding varieties, but none succeeded. Only after a long period of exploration and trial and error did they choose turkeys, which are easy to raise and easy to sell.
Through self-raised funds, loans and support funds, they solved the money problem. They built an online sales platform and broadened sales channels. "Rural entrepreneurship is by no means as simple as imagined. Success is difficult by relying on enthusiasm alone," Lu Man said. Today, their turkey business is on track. Many large out-of-town buyers come because of their reputation, and the scale of turkey breeding is growing. She said that seeing the once niche turkey become so popular through the internet, the villagers' views changed, and many took the initiative to seek cooperation. At present, the breeding base has integrated ecological turkey breeding, processing and sales, as well as feather craft research and development, and has driven 1,804 farming households nationwide.
Escape Beijing, Shanghai and Guangzhou, go home and do e-commerce. The deep integration of the internet and agriculture has profoundly changed agriculture and rural areas and stimulated more young people's enthusiasm for returning home to start businesses. The average annual growth rate of college students returning home to start businesses has remained at around double digits. By the end of 2015, the proportion of university graduates returning home to start businesses increased from 0.5% to 1%. They have education, technical knowledge and business skills, injecting new vitality into rural development and bringing new momentum to agricultural transformation and upgrading.
But "new farmers" crossing over into agricultural e-commerce experience much discomfort. Guo Hongdong, a professor at Zhejiang University's China Academy for Rural Development, said many new farmers are highly enthusiastic, but they are unfamiliar with the "three rural issues," do not understand rural production and do not know how to deal with farmers. There have even been situations where market channels were opened up, but problems arose in the supply of agricultural products. Only by becoming interdisciplinary talent proficient in both the internet and agriculture can one do "Internet+" agriculture well.
How can the urban-rural "digital divide" be bridged?