Seven conceptual issues that must be clarified in county-level e-commerce development

County-level e-commerce has reached a point today where the question is no longer whether it can be done, but how to do it. If having a county magistrate promoting e-commerce in 2013 could still be considered bravely eating crab, then by 2014 a county magistrate promoting e-commerce could only be considered embracing the new economy, and by 2015 a county magistrate promoting e-commerce had become a matter of implementing the spirit of the State Council's e-commerce decision. Entering 2016, if a county magistrate still does not promote e-commerce, they have fallen behind the times. It is precisely under such circumstances that currently almost no county government work report has failed to deploy e-commerce, and no county magistrate says they are not preparing to develop e-commerce. However, a practical question immediately surges forward: what exactly is e-commerce? What is county-level e-commerce? And why should we promote e-commerce? How to resolve these conceptual issues facing county-level e-commerce has become the foremost topic. But regrettably, some places' understanding of county-level e-commerce remains in a state of "not knowing of the Han dynasty, let alone the Wei and Jin" - the situation of not knowing how to do it and not doing it well due to unclear understanding genuinely exists. Drawing on more than a year of e-commerce training sessions, I will sort out some common conceptual issues regarding county-level e-commerce.

Does young people opening Taobao stores mean county-level e-commerce? Such an understanding obviously underestimates e-commerce, focusing basically only on the small segment of online retail, lacking an overall understanding of large e-commerce, ignoring B2B, O2O, C2B and other forms as well as the new business formats derived from them such as internet finance and agricultural crowdfunding, and failing to see the far-reaching impact of e-commerce on economic and social development. I personally tend to believe that county-level e-commerce is the sum of all economic forms involving e-commerce within a county, including at least three levels: first, the online transaction system, such as online merchants and e-commerce platforms; second, the e-commerce service system, such as e-commerce services, express logistics, financial payments, and e-commerce parks; third, the industrial support system, such as industrial bases, leading enterprises, and family farms. It can be said that e-commerce is an emerging economic cluster covering more than a dozen related industries.

Does promoting e-commerce destroy the real economy? Many county leaders believe that promoting e-commerce might crush all the physical stores on the streets. But the actual situation is that it is not that e-commerce is too frightening, but that physical stores are too poor - consumers have already voted with their feet. "Envy, jealousy and hatred" does not solve the problem; rather, the real solution is to address the problems of high store rents, too many intermediate links, high personnel costs, and relatively heavy taxes and fees for physical stores. As for the idea that a county can "keep itself aloof" by not promoting e-commerce, that is also unrealistic, because the penetration of e-commerce is called "the network has no boundaries" - even if you don't promote it, you can't stop it. It is better to actively embrace the new economy and seize the initiative. On this conceptual issue, Premier Li Keqiang was far-sighted when he said: "We must recognize that the interaction between online and offline may open up new space. If you simply fear competition, you will ultimately exit the competition."

Is promoting e-commerce a futile effort with no tax revenue? This question should be answered by county magistrates who have promoted e-commerce - I'm afraid they are secretly delighted! I once seriously consulted the tax authorities on this issue, and the so-called claim that e-commerce pays no tax is probably just a rumor. Currently, a large number of online merchants do not pay taxes only because they meet the regulation exempting small and micro enterprises with monthly turnover below 30,000 yuan. E-commerce enterprises above designated size all pay taxes - for example, Three Squirrels paid over 100 million yuan in taxes in 2015. Not to mention Alibaba and JD.com, which have paid tens of billions in taxes. Moreover, through exchanges with e-commerce enterprises, I learned that in reality, e-commerce products have already had about 85% of turnover tax paid before going online, with only the final step of electronic invoices remaining. Having said all this, it only concerns the existing stock. More importantly, e-commerce will spawn a large number of new related industries, such as e-commerce services, warehousing and logistics, processing and packaging, and promotion and marketing - these can form new tax sources, and this is a much larger increment!

Is promoting e-commerce promoting the virtual economy? What I want to say is: are the things sold through e-commerce all conjured up by Sun Wukong? All e-commerce products are produced by the real economy. The network is virtual, but the goods traded on the network are very real. On this issue, Premier Li Keqiang also made a clear judgment: "Don't think that e-commerce is just a 'virtual economy.' In fact, it directly drives the 'real economy' to a great extent." Moreover, from the practice in some places, e-commerce may also spawn new real economies that did not exist locally before. Like the "Shaji model" summarized by the industry - a poor village that collected scrap was transformed into a 5 billion yuan furniture industry. And in places that already had a foundation in the real economy, e-commerce has made the real economy even stronger. For example, in Lin'an, Zhejiang, the hickory nut industry became even more prosperous because it went online.

Does promoting e-commerce easily lead to unemployment? One should not panic just because a few physical stores have closed and some unemployment has appeared. While e-commerce destroys an old world, it also builds a new world. From practice, e-commerce can be called a typical labor-intensive industry, especially absorbing many young people into employment. When Premier Li Keqiang was researching e-commerce, he once said meaningfully: "Last year (note: 2014), despite slowing economic growth, employment did not decrease but increased. This is due to the streamlining of administration, delegation of power, and reform of the commercial system. And from the perspective of business formats, e-commerce played a tremendous driving role." The McKinsey Global Institute once surveyed 4,800 small and medium-sized enterprises, showing that with the popularization of internet technology among SMEs, for every 1 job lost, 2.6 new job opportunities are created.

Does promoting e-commerce mean starting from scratch? It can be simply said that e-commerce has never been a new industry created out of thin air; it is only a carrier and driving force for the transformation and upgrading of existing industries. The integration of e-commerce with existing industries is the direction, not building a new set from scratch. Even those emerging industries spawned by e-commerce are absolutely not water without a source - they must have real foundational support. From the deployment in the State Council's "Opinions on Vigorously Developing E-commerce to Accelerate the Cultivation of New Economic Momentum," the first priority is still "deep integration of e-commerce with other industries," thereby "becoming an important platform for promoting entrepreneurship, stabilizing employment, and improving livelihood services," and ultimately "playing a key role in the synchronized development of industrialization, informatization, urbanization, and agricultural modernization." Therefore, when promoting e-commerce, one must thoroughly study local industrial advantages and use e-commerce to accelerate development rather than pursue novelty without real foundational support.

Can promoting e-commerce lead to overtaking on the curve? It can only be said that e-commerce has indeed provided county-level economic development with an opportunity to catch up and surpass, but opportunity does not equal inevitable results - it still requires effective advancement of county-level e-commerce. From a practical perspective, county-level e-commerce is a very large systematic project. Observed from the direction of factor flows, there are roughly three levels: industrial products going to the countryside, agricultural products entering the cities, and e-commerce factors gathering within the county. Observed from transaction content, it can be divided into agricultural product e-commerce, agricultural input e-commerce, e-commerce poverty alleviation, tourism e-commerce, and even cross-border e-commerce and other forms. Moreover, it generally advances through four stages: the emergence of young e-commerce entrepreneurs, the rise of agricultural product e-commerce, the gathering of e-commerce factors in rural areas, and the formation of a new county-level e-commerce economy. Although e-commerce can achieve leapfrog development, the basic stages cannot be skipped. Thinking of "hugging thick legs" and "feasting on big players," cooperating with one or two platforms and recruiting one or two large e-commerce enterprises to make county-level e-commerce catch up in big strides is generally unrealistic - one must honestly start from basic skills. Of course, e-commerce is said to be "only fast is unbreakable" - as long as the approach is right, development will be fast, and major results can be seen in two to three years.

In the process of participating in promoting county-level e-commerce development, I have felt these conceptual issues especially deeply. It can be said that there is now a genuine need for a relatively in-depth movement to popularize e-commerce concepts, especially for county and township officials. It is necessary to lower the threshold of e-commerce concept presentations, starting from the popularization of common sense, explaining the basics clearly, so that people can think clearly and act with ease.