Business That Clicks

By Ma Xiaowen

Born in 1991， Cui Qisong， who comes from Lizhuang Town， Huimin County of east Chinas Shandong Province， became a migrant worker after graduation from high school. In 2015， he found that his neighbor was doing business online. He joined the trend and started selling soil collected from farms by the Yellow River， which is considered to be perfect for cultivating fl owers. This odd product turned him into a millionaire within just three years.

The number of grassroots startups like Cuis has increased rapidly. In August 2019， there were over 2，800 online stores， with a combined sales volume of more than 1 billion yuan （$141 million）， opened by residents of Lizhuang. More than 10，000 e-commerce practitioners have sprung up in Huimin.

Rural transformation

E-commerce has witnessed rapid growth in rural areas in this decade. In 2009， when AliResearch， Alibabas research arm， tried to identify Taobao villages， a term coined by Alibaba to define any place where 10 percent of the local population are engaged in online retail and make at least 10 million yuan （$1.4 million） from the Taobao platform annually， there were only three. Taobao is the e-commerce giants major online shopping platform.

But in 2019， there are 4，310 Taobao villages scattered in 25 provincial-level regions， according to a report released during the Seventh China Taobao Village Forum on August 30.

The report， co-authored by AliResearch， Nanjing University， Zhejiang University and the Chinese Academy of Social Sciences， revealed that in 2018 alone， the combined sales volume of 2.4 million vendors in Taobao villages exceeded 700 billion yuan（$98.4 billion）， accounting for 50 percent of Chinas rural e-commerce volume and creating 6.83 million jobs.

The development of Taobao villages has helped lift many rural areas out of poverty through encouraging online sales of farm produce and local specialties. Along with the development， local authorities have improved roads， broadband Internet services， power supply and logistics to support farmers in setting up online stores. It represents a transformation of the rural economy， as well as the lifestyle and mindset of rural residents.

Gao Hongbin， Vice President of the Alibaba Group and Director of AliResearch， told Beijing Review that besides the increase in number， Taobao villages are spreading in central and western parts of China. He said a new feature in these areas is that e-commerce clusters tend to be based in a town， rather than individual Taobao villages in the east.

“Perhaps we can say that towns in central and west China are more suitable for ecommerce， as they have more favorable conditions compared to villages，” said Gao. For example， villagers regularly visit town fairs， which turn towns into centers of trade and information. In addition， towns are usually the transportation hub for surrounding villages.

When asked about the reasons behind the success of Taobao villages， Gao mentioned three indispensable factors： fi rst and foremost， the entrepreneurial spirit； second， the e-commerce platform； and third， local governments support in improving the business environment and providing preferential policies.

Systemic improvement

Jack Ma， founder of the Alibaba Group， joined the Seventh China Taobao Village Forum on August 30 after his debate with Elon Musk， CEO of U.S. electric car company Tesla， at an artifi cial intelligence conference in Shanghai.

To boost Chinas e-commerce development， Ma said in his keynote speech that Alibaba will work with local governments to build a new supply and marketing system for rural areas where farmers can buy better seeds and fertilizer， and sell their products as well.

Ma said although Chinas supply and marketing cooperative （SMC） system helped develop the agricultural industry and rural areas， it needs to undergo reform and adopt new ideas and technologies. Alibaba is willing to work with local governments to build a new SMC system to help farmers sell their products and purchase the fi nest agricultural inputs at reasonable prices， Ma said.

“It is of vital importance for Taobao to achieve better sales of agricultural products and help improve farmers livelihood，” Ma said， adding that Alibabas success lies in the entrepreneurship of young people， farmers and small businesses.

Ma believes that in 20 years， rural areas across the world will have to embrace the Internet and digital economy. He said he is glad to see that the majority of Chinese people are embracing e-commerce， and that it is bringing talent back to rural areas.