Alibaba Group Set its Eyes on Opening in Rural Areas
Alibaba the e-commerce giant is planning to invest around 10 billion yuan in the span of five years in efforts to construct thousands of facilities in rural China in the company’s hopes to tapping into the increase in demand in these areas.
These facilities includes about 1,000 county operational center and around 100,000 village service stations and will see the company’s network to extend to a third of China’s counties and one sixth of the rural areas. These centers focus in improving logistics services and to cultivate buyers and sellers in these rural areas. The company hopes that the people living in these rural areas will enjoy the same consumption choices compared in cities and the talent can create businesses in rural areas.
Alibaba which is expanding after its New York listing raised its value to US$25 billion making it the world second largest internet company based on market value, hopes that farmers in rural areas can now directly purchase materials from manufacturers to help lower costs and sell their produce in different parts of the world without even leaving home.
Online retail volume increased by 41 percent year on year up to 1.85 trillion yuan in 2013 although the rural market was identified as the new growth engine in urban demand for online shipping tempers. Sales from other sites such as Taobao accounted for around 9 percent for the first quarter in 2014.