How does e-commerce “save” Chinese farmers?

E-commerce is one of the important channels contributing greatly to poverty reduction in China’s rural areas.

Life changing decisions

In 2018, Chen Jiubei – a farmer living in Badagong – a remote town in central China’s Hunan province made a bold decision that could change the lives of himself and those around him. people in her town, it’s livestream sales through e-commerce platform Taobao.

Chen’s livestreams mainly revolved around farming, cooking and talking about the products he sold, and it quickly became popular. Chen amassed 40,000 followers in just over a year and began regularly selling his seasonal corn and rice harvests online.

E-commerce “saved” Chinese farmers

The people of Badagong saw Chen’s initial success, and they sought her help to sell fruit. Many of these farmers are “below the poverty line,” with a per capita annual net income of 2,300 yuan (NDT), but Chen says they now make up to 3,000 yuan in profits every day. Through her livestreams, many people in the village have been lifted out of poverty.

Chen said the e-commerce business has markedly improved his life. Meat and fish used to be considered a luxury food only eaten during Tet holidays, now her family can have it in every meal. By the time of harvest, she was able to hire workers instead of doing it herself as before. “My mother used to work very hard, but now with the money I earn, she can rest,” Chen said.

The “Taobao Villages”

Badagong village is not the only village to benefit from selling on e-commerce platforms. There are more and more “Taobao villages” appearing in China, helping to significantly improve the lives of farmers here.

“Taobao Village” is a phrase that refers to villages with at least 100 households doing online businesses on one of China’s largest e-commerce platforms – Taobao, generating 100 million yuan in revenue. (NDT) and above.

According to data from AliResearch, after 10 years, the Taobao village model has brought profits to about half of the total rural population in China. As of August 2019, there are a total of 4,310 Taobao villages in 25 provinces.

The total revenue generated by Taobao villages amounted to 700 billion yuan in a year. The total number of active farmers’ online stores on Taobao increased nearly tenfold to 660,000 in 2018, from 70,000 in 2014. In 2019, 63 Taobao villages were located in the poorest areas of China. generated about 2 billion yuan in e-commerce sales.

Research by the World Bank and AliResearch shows that the average household income in Taobao village is three times that of ordinary rural households, which is equivalent to the urban household income. The report also says that e-commerce in rural areas contributes to reducing income inequality and creating better employment opportunities for women and young people, creating 6.8 million jobs a year for people. rural people.

Why are e-commerce platforms involved?

The companies have indicated that in addition to helping to alleviate poverty in rural areas, they also aim to “put rural agricultural products on the street” so that consumers can buy fresh products directly. , shallow standards without going through an intermediary like before.

Demand for agricultural products across China has begun to emerge in recent years. From 2014 to 2017, rural e-commerce increased nearly sevenfold, from 180 billion yuan to 1.24 trillion yuan.

According to the Ministry of Commerce, during Alibaba’s Singles Day shopping festival held in November 2019, agricultural product sales reached 7.4 billion yuan, up 64% year-on-year.

Vice Minister of Commerce Wang Bingnan said that China’s e-commerce has developed rapidly in rural areas and has covered all 832 poor counties nationwide, creating favorable conditions for poor areas to develop. new business models.

Online retail sales in rural areas increased from 180 billion yuan in 2014 to 1.7 trillion yuan in 2019. Total online retail sales of agricultural products reached 397.5 billion yuan in in 2019, an increase of 27% over the same period last year, helping more than three million farmers increase their income.

“Our goal is to build a digital tool for rural revitalization and a new rural infrastructure driven by technology,” said Li Shaohua, Vice President of Alibaba.

According to Li, strategies include linking urban and rural areas in China, giving urban consumers access to more agricultural products, and introducing urban products to the public. rural villages to help improve their quality of life. By 2022, Alibaba hopes that sales of agricultural products on its platform can exceed 400 billion yuan per year.

Future “races”

Alibaba is not the only platform paying attention to rural e-commerce. Pinduoduo, the third-largest e-commerce platform in terms of sales in China, has also launched rural poverty alleviation initiatives such as Duo Duo Farms, which uses artificial intelligence (AI) to help aggregate demand for agricultural products and connect farmers directly with merchants and consumers who want to buy their goods. Meanwhile, e-commerce retailer has also pushed farming, launching initiatives like JD Farm that uses technology like the internet of things (IoT), AI, and blockchain to farm pages. Farms can adopt a data-driven approach thereby improving productivity.

Local governments in China are also “eager” to join this race, joining hands with influencers (KOLs) to promote local products, such as the Wuhan government. Live broadcast of the sale of dried noodles, crayfish, tea leaves and oranges in April 2020 after the city was shut down due to the Covid-19 epidemic.

Direct selling (livestream) will be an important tool for farmers to introduce their products to consumers. According to the “2020 China Consumer Market Development Report” released by the Ministry of Commerce Research Institute, in the first half of 2020, there were more than 10 million live e-commerce broadcasts, with more than 50 billions of viewers and more than 20 million products sold. This trend has spread to rural areas and is growing rapidly. The revenue of the national agricultural product network in the first three quarters of 2020 reached 288.41 billion yuan, up 4.3% year-on-year.

Huong Dung (Synthetic)

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