E-commerce Goes to the Countryside: People's Posts and Telecommunications News Explains Rural E-commerce

A farmer growing peppers in Zhangjiajie, Hunan, went from growing 3000 kg of peppers a year to supplying 500,000 kg of peppers a year, all because he set up a "Pepper Network" that brought together a large number of people who wanted to sell peppers, and even led to cooperation with the China Supermarket Alliance. Similar platforms are already very numerous. Without anyone noticing, the countryside has become the next vast frontier for e-commerce applications. We want to appeal to e-commerce enterprises: Go to the countryside!

Wang Kaiqian, deputy director of the China International Electronic Commerce Center, pointed out that agriculture is the foundation of the national economy, and agriculture-related issues have always been the biggest concern of the Party Central Committee and the State Council. In responding to the financial crisis this year, we need to ensure growth, expand domestic demand, and adjust the structure, and the market with the greatest potential for expanding domestic demand is the countryside. China's agricultural production conditions are very primitive, still relying on scattered planting and breeding, and small-scale cultivation and production. The loss rate during the transportation and storage of fruits and vegetables alone reaches as high as 25% to 30% each year. What is the fact behind this figure? It means that nearly 100 million tons of fruits and vegetables are lost in the circulation process. If we convert this at the basic price of 500 yuan per ton, the total amount is 50 billion yuan, and that is where the market value lies. Yet in developed countries this indicator is generally below 5%, and in the United States it is as low as 1% to 2%. Therefore, in the agricultural sector there is enormous room for savings, enormous market space, and also enormous space for informatization and e-commerce services.

If in the past we could not implement this because objective conditions were lacking, now our material conditions are basically in place. The "Village-to-Village Project" has already shown results: villages now have postal service, roads, and electricity, as well as telephone and internet access. The means of informatization can be implemented, and the material conditions are in place. In 2008, China's rural netizens reached 84.6 million, and the proportion of rural population among netizens has continued to rise, with the internet spreading rapidly into rural areas. What comes next is the question of how to do it. China already has more than 70,000 leading enterprises in agricultural industrialization, nearly 150,000 rural cooperative and intermediary organizations, nearly 1.5 million large rural business households, and more than 2.6 million farmer brokers. As commodity producers and market operators, farmers urgently need both the government's public-interest information services and commercial information services. The vast countryside is calling out to the many e-commerce enterprises.

The two low-profile "Zhejiang Economic Figures of the Year," Sun Deliang and Sun Zhen, have already quietly extended the internet's reach into agriculture and the countryside. Netsun Toocle has joined hands with Telecom to jointly invest 10 million yuan to establish "Netsun Telecom," aiming directly at the application of e-commerce in the rural market. Coincidentally, Dayuan E-commerce Company, which was founded more than a year ago and mainly distributes medicines to the rural market, has recently also begun to enter the field of e-commerce platforms targeting the rural market. Sun Deliang said that "Netsun Telecom" will provide e-commerce trade services based on an advanced internet online platform. This will change the current situation in which rural enterprises in various places are disconnected from outside demand information and business opportunities are not smooth, so as to better resolve the contradiction between small-scale production and the large market.

Lu Lei, a member of the China Finance 40 Forum, believes that under the financial crisis, the advantage for China's economic recovery lies in the countryside, and the income growth and consumer demand of hundreds of millions of rural residents remain to be developed. Sun Zhen believes that the many policies now introduced by the state to stimulate rural consumption, including the home appliances going to the countryside program, illustrate exactly this point. "In fact, farmers also long to go online and snap up bargains, it's just that we haven't provided them with such a channel."

Through about 10 years of development, e-commerce has already become one of the main sales channels for many small and medium-sized enterprises, and online shopping has also become a consumption habit for more and more urban residents. As the urban e-commerce market continues to mature, the rural market has become the "next pot of gold" that many e-commerce enterprises value. Rural e-commerce gives upstream merchants and end consumers a platform for dialogue, and in the future agricultural products can also go farther through e-commerce. However, transitioning from the virtual network to real transactions must still rely on convenient logistics and distribution.