China / Regions

E-commerce giants speed up rural expansion

( Updated: 2015-10-20 18:00

The Chinese e-commerce giant Alibaba says it is moving faster in its rural market expansion by opening Guizhou province's first county operation and service center in Yinjiang county, which is seen as a breakthrough in its rural e-commerce strategy for western China, and a new era in online business for the relatively poor province.

This is also a part of the State's deployment and development of rural electronic commerce to increase consumption, because China's unbalanced urban-rural development has come with enormous barriers but also bright opportunities for online shopping for enterprises such as Alibaba and JD who are in now a furious race to dominate the rural market.

The State Council and ministries also have their action plans and guidelines that emphasize the importance of agricultural products and agricultural production, with the central government budget for 2015 earmarking 2-billion yuan ($31.5 million) for the development of rural e-commerce in the mid-western parts of China.

The Alibaba Group's research division, AliResearch, shows a rural online market in 2014 worth more than 180-billion yuan, which is expected to reach 460 billion yuan in the coming year, while experts from the Bank of China's investment banking division, BOC International, put the value of agricultural produce and production in rural areas in the trillions of yuan.

Some experts say that the use of computers and smart phones and the mobile Internet in rural areas make them a "blue ocean" and a gold mine, while the China Internet Network Information Center reports that, as of December 2014, there were 649 million rural people with Internet access, or nearly 31 percent of the total rural areas.

In considering all of this, Alibaba, Asia's largest online retailer, has announced plans to put 10-billion yuan into 1,000 county service centers and 10,000 village centers nationwide in 3 - 5 years and, in a letter to shareholders, Jack Ma, the group's executive chairman, explained that globalization, rural markets and big data are the three pillars of growth for the future.

Meanwhile, JD, China's second largest online retailer, is showing a firm hand in settling its own service centers in counties across the country, with the number of centers expected to go above 500 this year.

Wang Bingnan, an assistant commerce minister, comments, "Rural e-commerce will bring peasants convenience, employment, and entrepreneurships," then adds that JD's rural e-commerce this year involved thousands of people and that Guizhou is making itself the State's e-commerce center by following its plan of accelerated rural development.

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