E-Commerce Giants Investing More in Rural Expansion
E-commerce giant Alibaba is moving faster in its rural market expansion as they open their first county operation and service center in Yinjiang county in Guizhou province. Experts sees this as a breakthrough in the rural e-commerce strategy in western China an a new era in the online business in a poor province. This is also a part of the State deployment and development of rural commerce that will increase consumption as China’s unbalanced urban-rural development that comes with enormous barriers and bright opportunities for online shopping in enterprises such as Alibaba and JD which are now in a race to dominate the rural market.
The State Council and its ministries are already preparing heir action plans and guidelines that will emphasize the importance of agricultural products and agricultural production along with the central government budget for 2015 marking a 2 billion yuan for the development of rural e-commerce in the mid-western parts of China. AliResearch, Alibaba’s research division is showing a rural online market that is worth more than 180 billion yuan and is expected to hit 460 billion yuan by next year. Experts from the Bank of China’s investment division BOC International are placing the value of agricultural produce and production in the rural area in trillions of yuan. Experts are also saying that using computers and smart phones and the mobile Internet in rural areas is a gold mine. China Internet Network Information Center is reporting that as of December 2014 there are 649 million people in rural areas with Internet access or 31 percent.
Considering this, Alibaba announced its plans to invest 10 billion yuan into the 1,000 county service centers and 10,000 village networks centers nationwide in the next three to five years. According to Jack Ma, said that globalization, big data and rural markets are the next pillars of growth in the future. JD the second largest online retailer is also showing a firm stance in settling in its own service centers in the counties across the country with its number of center is hit above 500 before the year ends. Rural e-commerce are bringing peasants employment, convenience and entrepreneurship adding that JD’s e-commerce involves thousands of people and Guizhou is making itself the State’s e-commerce center as they follow plans in speeding rural development.