Since 2014, the ministries of commerce and finance and the State Council Leading Group Office of Poverty Alleviation and Development, among other departments, have implemented comprehensive pilot projects to bring e-commerce to rural areas in 1,231 county-level initiatives, covering all 832 counties with income levels below the national poverty line. The total online retail sales volume in the 832 counties reached 180.4 billion yuan ($25.9 billion) in 2018, a 49.3 percent increase from the previous year, and rural e-commerce has created more than 30 million jobs. Over 10 million people have benefited from these projects, of whom 3 million have seen their incomes increase. In Huanxian county of Gansu province, for instance, e-commerce has helped the average household income increase from 750 yuan in 2015, 1,100 yuan in 2016, 1,560 yuan in 2017, and 2,450 yuan in 2018.

Success in rural e-commerce comes from the strong support of large e-commerce companies. Over 800"Taobao villages", clusters of rural online entrepreneurs who have opened shops on Taobao, Alibaba's e-commerce platform, have sprung up across different counties whose income levels fall below the provincial poverty line. For instance, 12 impoverished villages in Caoxian county, Shandong province, have eradicated poverty by creating Taobao villages. Over 20,000 people, or one out of every five who rose out of poverty in Caoxian county did so as a direct result of leveraging e-commerce. Pinduoduo, an e-commerce platform that allows users to participate in group-buying deals, has 140,000 online businesses started by people living in places with income levels below the national poverty line, generating annual sales of 16.2 billion yuan and creating over 300,000 local jobs. Also national industry associations have played a role in poverty reduction through e-commerce. In 2017, the Ministry of Commerce launched a platform to manage all information related to poverty reduction through e-commerce.

Despite rapid growth in recent years, rural e-commerce has barely transitioned out of its initial phase, and there is much room for growth.

First, rural e-commerce needs to be better focused and more effective. Some of the pilot projects bringing e-commerce to rural areas suffer from issues, such as the poor targeting of lower income families, suboptimal allocation of capital, and lack of focus in the measures undertaken. For example, rural e-commerce suffers from imbalanced development due to different natural conditions, levels of economic development and logistical costs in different places. Nevertheless, the pilot project special fund failed to fully consider these differences and opted for equal allocation of capital. Some of the county-level e-commerce regulatory authorities lacked overall project planning, were afraid to use the fund or lacked the skills required. As a result, funding disbursement was slower than expected.

Second, window-dressing and bureaucracy are still rampant. Some of the county-level e-commerce public service centers are hardly used except for showing off to authorities. A few of the warehouses in logistics distribution centers sit idle, and some are located too far from each other to take advantage of network effects. Some regions pursue a high coverage rate of village-level service centers single-mindedly, encouraging major e-commerce platforms to set up these centers only to end up with a demand shortfall.

Third, the talent shortage in rural e-commerce needs to be addressed. There are different degrees of scarcity of professionals with expertise in areas such as rural e-commerce marketing, operations and design, and in particular, highly-trained professionals. Most of the resident population in rural areas are retirees, and the young children they care for (whose parents have left to work in the cities), who are not keen on learning to use the internet. As e-commerce training takes away time that could be used on farming, some of the residents have been reluctant to participate. The participants are diverse groups of individuals with very different needs and learning styles, but the content and methodology of training represent a "one-size-fits-all" approach. The training courses are heavy on theory and offer few opportunities for hands-on learning. Some e-commerce training centers only teach basic platform operation skills such as setting up an online store, publishing notifications and accepting orders, but fail to provide comprehensive coaching on specialized skills such as product design, promotion, operation, graphic design, customer relationship management and warehouse management. As the course is of little relevance, students are uninterested in applying their knowledge to online entrepreneurship.

To facilitate rural revitalization and poverty reduction effectively, it is vital to foster industries with competitive advantage, find new ways to develop county-level e-business, and promote multi-channel rural e-commerce through various approaches. First, integrate online retail and wholesale platforms, including leading commodity business-to-business trading platforms operated by companies such as yimutian.com, zhongnongwang.com and agr580.com, agricultural product wholesale platforms such as 1688.com and meicai.cn, verticals in perishable products such as benlai.com and yiguo.com, as well as other e-commerce platforms for agricultural products. Second, integrate rural e-commerce into the cross-border value chain so that the products can be sold abroad, generate a global market presence and provide off-season products in different parts of the world. This also provides an opportunity for differentiation, product upgrading and market transformation. Third, leverage social media, such as WeChat, Weibo, Toutiao, TikTok, and Kuaishou, to enable rural e-commerce. Some internet celebrities in rural areas have managed to generate traffic to their online stories. Creating channels for e-commerce platforms and underprivileged counties to work together is also important. For example, companies on e-commerce platforms can assist aspiring entrepreneurs in rural areas with product development, branding and training, through which the two can establish a long-term partnership.

The author is associate researcher with Institute of E-commerce under the Chinese Academy of International Trade and Economic Cooperation, the Ministry of Commerce.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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