Known as ‘China’s eBay’, Taobao is a huge online marketplace where Chinese users and merchants can sell and buy products. Alibaba, the owner of Taobao, reports rising rates of eCommerce in rural China, with 70,000 village sellers using the site to retail their produce.
What is interesting is that there are 200 plus Taobao villages in China. Alibaba defines a Taobao village as one where at least 10% of village households engage in e-commerce or at least 100 online shops have been opened by villagers; and total annual e-commerce transaction volume in the village is at least RMB 10 million ($1.6 million). These statistics underscore that eCommerce is not just an urban convenience – it is an engine to power the economy of the impoverished Chinese countryside, where 50% of China’s vast population resides.
Recently, news channel CNBC carried a feature story highlighting entrepreneur Lv Zhengzong from Beishan village. Lv used to sell sesame buns until he heard that people in nearby villages were using Taobao to sell produce to distant places. He set up an online shop in a 100 square feet room with a computer and started to produce camping gear. Today his company BSWolf generates $8 million in annual sales of outdoor gear. His $16 sleeping bags are a best seller on Taobao.
The story does not end there. Lv’s success inspired fellow farmers in his village to follow in his footsteps. They went to local cyber cafes, taught themselves to type and started their own online shops, seeking guidance from Lv to go about the new business. 2300 people in the village have left their traditional farming job to start online businesses.
In India, there is huge potential for eCommerce to power prosperity in rural areas. 70% of the Indian population lives in villages according to the 2011 census, and it is of concern to the government to restrict the trend of migration to urban areas, which puts huge strain on urban infrastructure and leaves villages denuded of the younger population with potential to work and earn. The solution is to take industry and business opportunity into rural areas and diversify beyond agriculture. The success of Taobao villages suggests that eCommerce can do this.
I would like to emphasise that for rural eCommerce to succeed, it is important to ensure that mCommerce is enabled, in local languages. Rural India largely accesses the internet on mobile phone. According to a 2014 report, 66% of active internet users in rural India access the web through mobile phones.
One of the factors that has facilitated rural eCommerce boom in China, is the local language applications built by eCommerce platforms and websites, including Alibaba, Walmart, Suning and others. It’s important to remember that rural consumers are not only sellers but also potential buyers of goods on eCommerce sites. Therefore it is important to develop simple and intuitive local language mCommerce apps that motivate even the first time user to start transacting.
I have observed before, that digital inclusion cannot succeed as an isolated concept to ‘bring people online.’ They have to see opportunities for benefit, financial growth, convenience and time saving that are relevant to them. For this, we need to create local language applications that are accessible on every device – low end smartphones and feature phones. To create and tap the business opportunity in rural India, we need to be proactive, not reactive.