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January 6, 2015

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Home » City specials » Hangzhou

Taobao seeks big expansion into villages

By Xu Wenwen | January 6, 2015, Tuesday | Print Edition

EDITOR’S Note

The incredible rise of e-commerce in China has taken many by surprise. The heart of China’s e-commerce industry is centered in Zhejiang Province with Alibaba leading the way in the provincial capital Hangzhou. Today is the third in a series of our reporting about the villages that have been transformed after they embraced e-commerce.

For over five years 32-year-old Zheng Liying has been running a grocery store in her hometown of Jinjia Village, Tonglu County in Zhejiang Province. Since October she has been helping villagers buy and sell stuff on the Internet.

Zheng is part of Taobao’s ambitious plan to expand e-commerce into countless villages across the country, giving villagers access to more products at cheaper prices and farmers a bigger market to sell their produce.

In Zheng’s store, Wu Xiaona, 48, uses a computer and carefully looks at goods on taobao.com. She asks Zheng to scroll down as she peruses winter coats. She wants to buy one for the new year. Once the order is made, the goods are shipped to Zheng’s store, where Wu can pick them up at her leisure.

It is the fourth time Wu has purchased things online. Zheng’s store is a Taobao Service Site, which has been set up in 10 villages across Tonglu as a trial. Taobao.com, which is owned by Alibaba, is the country’s leading online shopping website and hopes these service sites help rural people, especially those who have little knowledge of computers, benefit from e-commerce.

The business magnet plans to invest 10 billion yuan (US$1.61 billion) in three to five years to establish 100,000 service sites in villages all over the country.

“I’ve heard about buying and selling on the Internet, but I don’t know how to do it,” Wu says. “Before it was awkward to get others to help me, but now we are encouraged to ask for help.”

Taobao has included several incentives like pay after delivery (Taobao pays the seller up front on behalf of customers) and full refunds if unused goods are not satisfactory to encourage villagers to try online shopping.

“At the beginning most people were asking me to buy daily commodities such as soap and towels,” Zheng says. “But soon they became more open-minded and now they like to buy clothing.” She adds that most online customers in her village are middle-aged women.

Taobao trains staff before establishing service sites and selects squares or grocery stores in a village since these are places locals often like to gather. A team of Taobao technicians runs the project in Tonglu.

The service sites also work well for those with something to sell. Beekeeper Hu Turong, who lives in Jinjia Village, says he used to travel 50 kilometers to Luci Bay, a popular scenic site, to sell his honey to tourists. Now he just takes the honey to Zheng’s store, a three-minute walk from his house. After that he just needs to wait for sales. The Taobao technicians take photos, compose a write up for the honey and upload the information onto the Taobao store named “Farmer Family at Fuchun River.” Zheng calls a delivery company whenever there is an order.

The same store also sells chicken eggs, mushrooms, Chinese herbs, nuts and even poultry, which is shipped after the bird is killed and cleaned. All agricultural products are from farmers in Fuchunjiang Town of Tonglu.

Sun Lijun, general manager of Alibaba’s Zhejiang branch and head of the technician team, says: “Usually one online store has one owner, but in this project, all villagers essentially own the store.”

So far Zheng’s store is in the start-up phase and farm produce worth less than 5,000 yuan has been sold in the first month. But according to Alibaba’s plan, there will be 50 sites in Tonglu by the end of January and 200 by the end of 2015.

“E-commerce in villages is one of Alibaba’s three strategies after listing overseas,” Sun says, adding the others are globalization and big data.

“Now the first step is to let villagers learn and get used to making purchases on the Internet, and after that it’s to instruct them on how to better run e-commerce businesses.”

Tonglu has been chosen as the site for Taobao’s trial because it is near Alibaba’s headquarters in Hangzhou, and boasts a variety of farm produce and four large domestic logistics companies — STO Express, YT Express, Yunda Express and ZTO Express.

Fang Yi, director of Tonglu County, says: “It is a win-win-win situation because e-commerce gives farmers access to more products, young locals now feel more comfortable staying in their hometown and our products can be sold everywhere.”

Hangzhou


 

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