An Overview of E-Commerce in Rural China: A Growing Market to Watch Out

[wd_hustle id="social-share" type="social_sharing"]

China outranks the United States as the largest e-commerce market with a revenue of $US636 million in 2018. It is expected to show an annual growth rate of 12.4% according to the recent records. With users between the 25-34 years old spending on fashion, toys, hobbies, and DIY.

In the west, the huge numbers of brick-and-mortar shops or physical stores make online shopping just an “add-on” experience for the customer. But in China, e-commerce, as Jack Ma puts it, is the “main course” of the meal.

In a country as big as China, which is almost equivalent to five time zones, how can merchants from the east coast or even in major cities reach out to rural areas? Logistics would be the main concern.

The connected market: Thanks to the internet

But the internet made it all possible. The convergence of internet, data, emerging technologies and platforms that homegrown companies such as BAT (Baidu, Alibaba, and Tencent) have focused on the past few years, made e-commerce as if the air that anyone breath when you’re in China.

For example, Alibaba recently invested in rural e-commerce platform, Huitongda to expand its rural presence and increase sales outside the major cities.

It’s a lifestyle that shapes the market, which pushes both homegrown and overseas companies to explore a variety of ways to reach out to customers. Should you consider looking at the rural areas?

Here’s what you need to know about the e-commerce in rural China

#1 Drone delivery is part of the day-to-day experience of residents

Everything changes fast in China even in rural areas where JD, the second largest e-commerce platform takes deliveries via drones. The rugged and narrow mountainous roads in the villages where the complex terrain can be a barrier to improve the logistics can be done on air.

Zhangwei is one of JD’s hub. It was one of the first villages in Jiangsu province where it has its first roll of drone deliveries in early 2017 and as of this writing gets an average of four deliveries per day.

From diapers to sundries to shampoo, residents wait as they “fall from the sky” where the drones are scheduled to deliver the purchased items of the villagers.

#2 Big data gives hint on what to sell

Alibaba’s Rural Taobao brings e-commerce to the next level as they provide big data to local producers and sellers, which allow them to analyze and access the sought-after items.

Local sellers can use the big data to identify the preferences of customers and decide which fruits are better to sell in a certain time of the year. Farmers can take advantage of these solutions to boost sales.

Turning to high-tech tools gives producers ways to market their harvests on Taobao, by harnessing live streaming.

#3 Online payments made easy via mobile phones

One of the most convenient ways to pay merchants and send money to their family in the major cities is via mobile payments. Alibaba and Tencent are establishing their financial arms such as Alipay and WeChatPay, allowing these residents in rural areas to make transactions In a few minutes.

Most people don’t have computers in these areas, but smartphones make it more accessible and easier for them to pay. It’s not an innovation after all for these dwellers, as powered by QR codes, paying for goods and services in supermarkets and restaurants and even mom and pop shops are the way of life.

According to South China Morning Post, “By the end of last year about 47 per cent of China’s rural internet users had adopted mobile payments, up from 31.7 per cent a year earlier, according to data published on Wednesday in a biennial report by the government-run China Internet Network Information Centre (CNNIC).”