Ecommerce is massive in China, but there’s no doubt that it’s far more popular (and practical) in the cities than it is in the countryside. There are a number of reasons for this: lower education levels, lower broadband and smartphone penetration, and under-developed infrastructure that leads to much slower shipping and delivery systems.
China is urbanizing fast, but nearly half of its population still lives in the countryside. That means that rural areas are a massive potential market for ecommerce companies. JD has already made significant expansions in rural ecommerce this year, and Alibaba aspires to grow its market there too. At an event in Guangdong on Thursday evening, Alibaba CEO Jack Ma spoke about how the company sees rural ecommerce and what it has planned going forward.
What follows is Tech in Asia‘s translation of one section of Ma’s remarks, which are transcribed in Chinese here.
Of the utmost importance is how to pull up China’s rural economy. We think that China’s economy will have undergone a fundamental change only when China’s rural areas become wealthy. We believe the digital gap [between urban and rural residents] is going to get bigger and bigger. But the digital gap isn’t a technology problem, it’s a consciousness problem, a preparedness problem, and a whether-or-not-you’re-ready-to-accept-these-advances problem. To integrate the city and the countryside in parallel with the push of urbanization, ecommerce must be at the fore. We’ve had a test site in [rural] Suicheng county in Zhejiang province, and our two years in Suicheng have told us that the countryside’s consumption potential is vast. And agricultural produce is getting more and more interest among ecommerce [shoppers], especially now with all of the food safety concerns and problems.
Alibaba plans to expend a lot of energy in the entire field of rural ecommerce. We’re really hoping to bring ecommerce to all of China’s [many] villages, so that rural people can get a taste of the city life and sell their own products in the cities.
We’ve placed a lot of emphasis on our two rural test sites [in Zhejiang and Guangdong], and when we last reported this to [Guangdong] Governor Zhu [Xiaodan], the provincial government placed a high level of importance on it. Today I’m thankful to all of the counties’ various economic leaders, and I want to say that what Alibaba is doing here isn’t a slogan or a stunt, it’s something genuine. Internally, we talk about the youth sent down to the countryside*, but today through ecommerce and the web we can really send intellectuals to the countryside, and through that change the intellectual structure there. Let the rural people return to the earth, let the intellectuals return to the farms, and send the products of their agriculture all over the nation. Then there will truly be [a culture of] consumption/spending.
So Alibaba will increase its investment in the rural financial industry, increase its investment in rural distribution. In this new age of rural ecommerce, we want to start now [and unlike the way we started with Taobao and Tmall] base all of the technology on big data cloud computing. Our rural ecommerce will make life more convenient and solve efficiency problems so that rural people can easily buy and sell online.