E-commerce Giants to Expand Online Services in Rural Areas
Leading e-commerce giants in China are stepping up their expansion on online retail businesses in rural areas in hopes to getting into the new territories to offset a now saturated urban market. Recently JD.com has announced that they will also be setting up a county level operating center in Guangdong.
This followed the e-commerce company move and decision to open a physical shop in a small northern county in Hebei to assist farmers in purchasing home appliances using its online shopping stores. Even when plagued by poor transportation and a much lesser purchasing power, these rural buyers have remained mostly untouched by online shopping that is sweeping across China in the past years. But the situation changes as the swollen market in villages showed great potential and have caught the curiosity of the country’s e-commerce businesses.
In a recent report that was published by a research center operated by Alibaba, forecast a value of rural online sales will expand to a 180 billion yuan market for this year and will hit 460 billion yuan by 2016. Alibaba’s online site Taobao.com made nearly 10 percent of its total sales of the site during the first quarter of this year slightly higher than the 7 percent sales from two years ago.