Taobao, the popular Chinese online retail platform, has become more important to rural economies across China due to an emerging phenomenon called “Taobao villages”.
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The popularity of “Taobao Villages” is increasing in China.
This trend consists in village residents who sell their handicrafts and products via online. According to Alibaba, Taobao village is any place where 10% of the population is engaged in online retailing.
The e-commerce has grown in rural China in 2014, with the number of “Taobao Villages” increasing over tenfold in comparison with 2013. At the end of last year the number of “Taobao Villages” reached 211 while in 2013 there were only 20.
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Almost half of China’s demography resides in agrarian regions and nowadays, e-commerce has an important potential to boost economic activity in China’s poorer areas.
These days, there are more than 70,000 Taobao Village marketers selling their products across China. This activity has created more than 280.000 job opportunities in rural China in 2014, in comparison with 60,000 jobs in 2013.
Thanks to e-commerce, rural areas have the chance to increase their sales by selling their own products such as fresh foodstuffs which are very demanded in cities. Also, e-commerce can be helpful to unlock the potential of China’s countryside and give access to China’s villages to a vast market which allows sell and buy a huge number of products.
Nowadays, there are Taobao Villages in 10 different China’s provinces, especially in coastal provinces such as Zhejiang, Guangdong, Fujian, Hebei and Jiangsu where there are more than 90 percent of the total number of Taobao Villages. However, this trend is expanding across China, and there are four Taobao Villages since last year in Midwestern provinces of Sichuan, Henan and Hubei.
Alibaba Group said that would encourage rural entrepreneurs to extend their business across Taobao by providing financing, marketing support and e-commerce training.
In order to attract rural merchants, Alibaba group will offer financial solutions to those Taobao Village marketers while Taobao University will offer seminars in rural areas where people have the opportunity to learn how to sell online. In addition, Taobao will launch special promotions on products sold by Taobao Village merchants.
Last October, Alibaba created a program to invest 10 billion yuan in developing a rural e-commerce service system to cover 1.000 counties and 10.000 villages.
However, the merchants’ enrichment and the increase of job opportunities are not the only consequences of e-commerce penetration on rural regions. There are other repercussions such as the economy development of rural areas and the incomes improvement of the village people and the creation of factories. In addition, the success of online sales has boosted other businesses such as delivery companies that have been created or have expanded their business to rural areas in order to deliver the purchased products to buyers.
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The success of those vendors resides in the appetite of Chinese consumers to buy quality handmade items and fresh products.
Taobao is a double-edged sword for people from rural regions because they can sell their products buts also they have access to a vast number of items that otherwise they will never could buy.
As we see, Taobao plays an important role in China because many marketers have the chance to sell their products around Asia and buyers have access to a huge amount of products.