The key to rural e-commerce development lies in the implementation of service systems

In the past two years, rural e-commerce has developed rapidly, not only reflected in the rapid expansion of volume, but more importantly, it is also a new stage transition. The development stage has changed, and the central problem to be solved has changed. This is the key point for correctly grasping the trend of rural e-commerce today.

Rural e-commerce enters a new development stage

1. From "early layout" to "mid-game competition." In 2015, rural online shopping grew by 96%, online sales of agricultural products grew by more than 70%, and rural e-commerce sites reached 250,000 by the end of last year. The new progress in rural market coverage shows that rural e-commerce is rapidly moving from "early layout" to "mid-game competition." The new situation of multiple market entities entering the rural market to compete has become a fact in some regions and will continue to unfold in a wider scope.

2. From a single development model to a multi-model competitive situation. In terms of the market, especially since 2015, the entities involved in the rural e-commerce market have increased significantly, making the styles of rural e-commerce more diverse. As broad-domain platforms, Alibaba, JD.com, Suning, and others have all made efforts in rural e-commerce; specialized platforms focused specifically on rural e-commerce such as Ganje, Lecuntao, and Taoshihui have long broken through the local markets of a single city or province and are nationwide in rural areas; transforming merchants, especially supply and marketing cooperatives, postal services, and the former operators of the Ten Thousand Villages and Thousand Towns program, based on conditions from many years of deep offline cultivation, have begun to move from offline to online; e-commerce platforms from different brand merchants such as Nongshang No. 1, Cloud Farm, and Nongyisheng are also setting up points in villages, towns, and counties. This new progress in rural e-commerce has made its models rich and varied, and has also provided more choices for local governments, rural consumers, entrepreneurs, investors, service providers, and online merchants. The game of interests in the rural e-commerce market has become increasingly obvious. Rural e-commerce is not the only way, but many ways. Multi-dimensional competition is a new situation brought about by the new progress of rural e-commerce.

3. From the "online transaction stage" to the "service system stage." Rural e-commerce has already developed from the early "information service stage" to the "online transaction stage," and has now entered a new "service system stage." Its hallmark is the construction of a three-level service system at the e-commerce village, township, and county levels. In terms of its driving mechanism, in addition to the joint efforts of multiple entities, it is more manifested in the beginning of the convergence of two types of rural e-commerce. Although cultivating e-commerce entities is still one of the main tasks, their core business is no longer limited to online transactions. The more important change is that they have begun to target deep-seated pain points in rural e-commerce and even the rural circulation system, such as people's quality, logistics distribution, cold chain, traceability, and marketing service links. That is, they are making efforts around a localized service system that combines online and offline in rural areas and connects upward and downward flows, extending from front-end transactions along the industrial chain to deeper levels.

Building a strong implementation service system

In the new stage of rural e-commerce development, the most critical task is to establish a rural e-commerce service system that is implemented locally, combines online and offline, and connects upward and downward flows.

First, it is the requirement and guarantee for realizing the national rural e-commerce development goals. The "Guiding Opinions of the General Office of the State Council on Promoting the Accelerated Development of Rural E-commerce" issued last year clearly stipulated three key tasks for rural e-commerce: actively cultivate rural e-commerce market entities, expand the application of e-commerce in agriculture and rural areas, and improve the development environment for rural e-commerce. The first one refers to the service system. In addition, to achieve the other two goals, namely deep integration with the primary, secondary, and tertiary industries in rural areas and achieving obvious results in application, these are actually inseparable from the guarantee provided by the service system.

Second, it is a necessary condition for e-commerce to take root, blossom, and bear fruit after entering villages and households. The hardest part of e-commerce entering rural areas is that after e-commerce enters villages and households, it should not become mere decoration, but should be able to take root, blossom, and bear fruit, benefiting agriculture, rural areas, and farmers. In order to avoid the counterproductive results and idle capacity that have appeared in rural informatization construction over many years, an implementation service system such as the one described above becomes an absolute necessity.

Third, it is the key focus of "Internet Plus Circulation" in rural areas. Developing rural e-commerce is not just about adding a new increment; it is also necessary to use e-commerce to help existing business forms, including the transformation and upgrading of the rural service system.

Fourth, it is the guarantee supporting the upward flow of agricultural products. For the upward flow of agricultural products, "Internet Plus" and "e-commerce plus" add an amplifying effect. If you are good, it amplifies it; if you are not good, it also amplifies it. This is a double-edged sword, and if handled poorly, it may hurt yourself. This also explains the necessity and importance of an implementation service system.

Finally, it is also an important part of optimizing the e-commerce environment. Whether the county-level e-commerce environment is good or not, the most important criterion is whether there is an implemented and powerful service system.

Rural e-commerce construction calls for an "airport model"

At present, the overall characteristics of rural e-commerce service system construction are:

First, more and more regions have already taken the construction of rural service systems as the core content of the new stage of rural e-commerce for layout and implementation. This truly proceeds from the requirement of combining online and offline, touches the deep constraints of the rural circulation system, and is of far-reaching significance.

Second, among them, the three-level service system of county, township, and village has become standard equipment for rural e-commerce. Whether it is the government or market-oriented platforms, all regard building such a three-level service system as an important "required action."

Third, the combination of online and offline (O2O) has clearly shown different paths. There are mainly three kinds: for example, Alibaba's Rural Taobao, as a representative, moves from online to offline; supply and marketing cooperatives, like the former Ten Thousand Villages and Thousand Towns stores, move from offline to online; and there are also some e-commerce platforms, such as Taoshihui, which, upon arriving in a place, adopt a franchise and integration approach, that is, an external online platform and a local offline commercial entity join hands to jointly carry out online-offline integration locally.

Fourth, upward and downward flows are not synchronized. In particular, the lag in the upward flow of agricultural products has become an unavoidable topic in the current development of rural e-commerce.

Fifth, the industrial foundations and main industries differ from place to place, so the service systems required around specific industries are also different. A truly good service system must fit with the local industrial structure in order to form strong support for local rural e-commerce.

Finally, in the current construction of rural e-commerce service systems, duplicate construction is very serious. Different external platforms are all building their own independent service systems. Just like Air China, China Eastern Airlines, China Southern Airlines, and many other airlines, do they need to build their own airports wherever they do business? In this way, there is great waste of social resources. The author hopes that rural e-commerce can also have its own "airport model." One locality only needs to build one rural e-commerce "airport" that is open for access, shares resources, and serves multiple uses on one network.

Rural e-commerce must "follow the timing," "be grounded," and "adapt to local conditions"

What are the development trends of rural e-commerce? Now we can see several trends:

The first trend is that e-commerce is rapidly entering adulthood. The "12th Five-Year Plan" period was the 5 years in which China's e-commerce developed fastest. Even if the development speed of e-commerce during the "13th Five-Year Plan" period declines somewhat, it is bound to continue growing rapidly, and it will enter its adulthood. E-commerce in adulthood is different from e-commerce in infancy. The policy system and regulatory system for e-commerce, including rural e-commerce, will all change as conditions change.

The second trend is the contest between "county-level self-ecology" and "platform self-ecology," which calls for a new rural e-commerce ecology that is open, integrated, and shared. "County-level self-ecology" means that in rural e-commerce development, the existing market ecology of the county is taken as the main basis, and changes are brought about through local growth and external integration to promote transformation and upgrading. "Platform self-ecology" means taking the platform's ecological model as the principle. When an external platform enters a county, regardless of what the original market ecology is like, it mainly relies on its own platform and adopts more of an approach of external force squeezing and even forceful subversion, bringing changes to the local market ecology. "County-level self-ecology" and "platform self-ecology" actually represent two different ways of implementing rural e-commerce in counties, thus bringing different effects to the locality. During the "13th Five-Year Plan" period, it is hoped that the development of rural e-commerce can properly handle the relationship between external and local forces, and through market competition, strive to find and enter an open, integrated, and shared rural e-commerce market ecology at a relatively low cost.

In addition, there are other trends, such as: the upward flow of agricultural products will receive more policy attention and resource investment; cross-platform, micro-platform, and sharing economy will play an increasingly large role in rural e-commerce development; e-commerce will act more on the supply side, promoting the transformation of existing stock; and in the above process, mechanism innovation and institutional innovation are becoming increasingly important, and so on.

During the "13th Five-Year Plan" period, the development of rural e-commerce, like all other work, should be guided by the "five development concepts" of innovation, coordination, green development, openness, and sharing. As far as the rural e-commerce service system is concerned, the author believes it is necessary to grasp the following trend characteristics: First, "follow the timing." Rural e-commerce is a major trend, and we must follow the timing. Industrial transformation and upgrading is a major trend, and we must follow the timing. Second, "be grounded." Rural e-commerce is different from urban e-commerce. Its special scenarios and special entities determine that it has its own special laws. Past successful experiences and certain templates cannot be mechanically applied to the specific scenarios of rural e-commerce. If it is not grounded, one will suffer. Third, "adapt to local conditions," especially considering the upward flow of agricultural products. With so many highly differentiated segmented products, the service systems corresponding to them are different.