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China's Alibaba expanding into rural market

Reporter: Han Peng 丨 CCTV.com

05-27-2016 05:08 BJT

China's e-commerce giant Alibaba has announced an investment of 10 billion yuan, or 1 and a half billion US dollars, over the next three years, to set up its service in the country's rural areas. This will likely help alleviate poverty. CCTV's Han Peng reports from one of Shandong’s villages, to see how the service is improving the lives of residents.

Rural life in China isn’t all idyllic. Marginalized from the booming urban market, one out of ten peasants still lives under the poverty line.

But the rising e-commerce market is providing to be a much-needed platform to sell their produce at a higher price. And it makes it easier to buy urban products as well.

That's the latest program by China's e-commerce giant Alibaba. The company is setting up some 100,000 rural service stations over the next three years in some of the poorest and remotest villages.

"My business aims to help my neighbors to buy what no one sells, and sell what no one buys in our village. We believe there is huge market potential in rural areas," said Xia Youzhi, rural resident.

Xia Youzhi used to run the only convenience store in his village. Last year, he decided to join Alibaba, and set up a rural service station.

Alibaba is by far the first and only online retailer in China to set up a sales and purchasing platform for rural residents. And in Chinese villages, e-commerce works in quite a different way.

Villagers don’t really know how to use a computer or a mobile app, so Xia has to install a big computer screen in his store to help them pick out products and make online orders.

Most villagers are skeptical about online payment, fearing that sellers might scam them. So Xia, as a trusted local shop owner, receives the cash from villagers, and then pays online through his own bank account.

But his most demanding work lies outside the store. Most villages have no roads for trucks, so deliverymen can only send the packages to the rural service station.

Xia has uses a motor-tricycle to transport the packages to villagers' homes. At the same time, he can collect from the villagers whatever they hope to sell.

We now follow Xia Youzhi to complete the so-called "last kilometer logistics". The roads here are quite bumpy and difficult, but this is regarded as the core to e-commerce competition. No matter how new e-commerce may look like to local buyers, the deals have to be completed in the most traditional and rural way.

Figures show that one-third of China's villages lack the necessary infrastructure for logistics, and two-thirds still have no access to the Internet.

But as China pledges to complete Internet infrastructure for all villages by 2020, Alibaba says it is confident in tapping into the huge potential of the rural market.

"E-commerce can solve one of the biggest problems for rural residents -- that is by helping them be equally informed about the market with urbanites. With just a click of a mouse, they can buy and sell what they want, making them an equal player in the market," said Sun Lijun, partner of Alibaba Group.

Xia Youzhi's rural service station is one of the earliest in China -- in a village near Shandong's central city of Weifang.
It was never a booming export region until now.

Local authorities say despite a nation-wide shrinkage, Weifang has seen its export rising last year, because it embraced the idea of rural e-commerce.

Some say with more villagers buying and selling online, the world might just see a "Made in China" tag coming out of the country's villages.

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