April 20, 2013

E-Commerce in Rural China


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E-commerce in China is massive and drastically expanding but not all of China's online buyers and sellers are located in urban areas.

Image via Allianz

According to China's National Bureau of Statistics, China's urban population has surpassed the share of rural residents but there are still more than 656million people still living in China's rural areas more than twice the total population of the United States.

Not only does this present a huge potential as an untapped market with rising pockets of wealth but also demonstrates further possibilities for the expansion for e-commerce in China.

The following infographic bellow by Alibaba demonstrates the sheer size of China's current e-commerce activity.

The video bellow also produced by Alibaba showcases an example of how e-commerce has enabled farmers to access markets around the country and to sell their goods at more competitive prices. It follows the story of one particular entrepreneur Du Qianli who explains how his Taobao organic foods online store is helping poor farmers in China's Taihang Mountains earn extra income.

Mr. Du details in the video how many producers in rural China suffer from shrinking local demand and need to sell their goods further afield in order to survive and to become prosperous. Opening e-shops on Taobao is easy for them thanks to the company's self-learning courses and help from a network of fellow rural entrepreneurs like Du.

Unlike in the United States and Europe where e-commerce supposedly threatens the future of small local and rural business, in China e-commerce presents a wealth of opportunities. Entire towns and cities in rural areas are thriving on e-commerce especially as it is decentralised and enables producers to sell nationwide.

Of course buying and selling millions of goods in a country as large as China presents many logistical challenges. Compared to other emerging economies such as India, China's rural infrastructure is relatively well developed and constantly improving. Yet as ATKearney reports in order to sustain the current rises in e-commerce activity in China the logistics infrastructure needs to grow to support this.


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