RTX15S9Q.jpg (Photo : Reuters)
In hopes of offsetting the saturated urban market, China's e-commerce sites expand to rural areas to tap the vast consumer market that remain untouched due to a poor transport system and low purchasing power.
JD.com or Jingdong Mall, a Chinese e-commerce company based in Beijing and by far one of the largest B2C retailers in China, announced their plans to set up a provincial level retail center in Guangdong Province. This move followed the company's decision to open a physical shop that caters to local farmers in Hebei Province last November.
Previously plagued by poor technology and low income, the rural villages nevertheless showed signs of burgeoning economy brought upon by the development of Special Economic Zones, increased productivity, economic reforms and industrialization.
The growing rural economies have shown improved consumerist potential and are thereby getting the attention of e-commerce giants previously confined within the urban market.
China's largest e-commerce company, Alibaba Group, previously published a report indicating the growth of online rural sales from the current 180 billion yuan ($29 billion) to 460 billion yuan in the next two years.
Alibaba's rural online sales constituted almost 10 percent of the company's total online sales during the first quarter of this year, an increase of 3 percent from the 7-percent figure two years ago.
Other Chinese e-commerce businesses are striving to grab a majority share of China's untapped rural market. Alibaba, being the biggest e-commerce business in China, is leading the race.
Alibaba has already established several branches in China's three counties and is planning to invest 10 billion yuan in three to five years, thus grabbing one-third of China's counties and one-sixth of the entire rural market.
Alibaba said that the company aims to work hard in establishing their rural bases that will help the communities conveniently buy urban merchandise and easily sell local products fast.
With the growth of online commerce in rural China in the coming years, employment and productivity are bound to increase, thus paving the way for poverty alleviation in remote areas.
