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Print Edition> Business
UPDATED: April 13, 2015 NO. 16 APRIL 16, 2015
Yard, Net, Table
E-commerce is the key to boosting slow produce sales
By Wang Jun


Apples, pears and peaches color the landscape of Qianxian County in northwest China's Shaanxi Province. However, since last winter, pear sales have fallen. In the county's Yanghong Town alone, millions of kilograms of pears await buyers.

When interviewed by Xinhua News Agency, Liang Zhanming, a farmer in Shanglumo Village of Yanghong Town, said that in 2013 his 1.2-hectare land produced 40,000 kg of pears, which sold for 4.4-4.8 yuan ($0.72-0.78) per kg and netted him a total revenue of 170,000 yuan ($27,732). Buyers came from across the country, from as far away as south China's Guangdong Province and Guangxi Zhuang Autonomous Region.

"But in 2014, beaten by harsh frosts and droughts, the pear output was only 25,000 kg," said Liang. "Few buyers have come to buy and almost all of the pears are still in my cellars. The prices fell to 2.56-2.66 yuan ($0.42-0.43) per kg before the Spring Festival (which fell on February 19 this year)."

Qiao Bin, deputy head of Yanghong Town, said that in 2014 a total of 7.5 million kg of pears were produced in the town, 2 million of which are still waiting for buyers.

"We've had difficulty selling pears this year," he said.

Recently, farmers in Shanglumo Village have gotten rich from pear sales, which raised their expectations for pear prices, causing the slow pear sales this year. Most Shanglumo villagers now still wait for buyers to come and are not aware of promoting through e-commerce and other new methods of selling farm produce. Behind the unreasonable expectations on farm produce is the region's underdeveloped e-commerce.

Having no access to price information from e-commerce platforms, many farmers have overestimated the sales and prices of pears. To accelerate the establishment of county-level e-commerce platforms is the solution to preventing farmers from being hurt by low prices and slow sales of farm produce.

China's rural e-commerce has already shown explosive growth since 2009. According to a research report on county-level e-commerce by Alibaba Group, in 2013, through Alibaba's customer-to-customer platform Taobao.com and their business-to-customer platform Tmall.com, 1.4 billion parcels were sent out from Chinese counties, and more than 2 million shops registered on these two platforms were from the rural areas.

Underdeveloped and underutilized

Li Qi, a member of the Ministry of Com-merce's e-commerce consulting committee, said the rapid development of rural e-commerce will be a good opportunity to solve the problem of sluggish sale of farm produce.

"Currently, some agricultural products produced in rural areas are still primary materials with simple packages, but products sold through online shops must be well packed and processed. Through the transformation of agricultural products to processed products and then to commodities in online shops, prices of farm produce will rise significantly. The government must offer training to farmers in this regard," said Li.

Wei Yan'an, head of Rural Youth Work Department of Shaanxi Provincial Committee of the Communist Youth League of China, has long been engaged in studying e-commerce in rural areas. He said there are three challenges in developing e-commerce in rural areas.

Farmers do not correctly understand e-commerce. Some e-commerce concepts that are commonplace in cities are still novelties to farmers and even rural government officials. To them, simply opening a shop on Taobao.com is e-commerce.

WEALTH OF PROMOTION: A staff member of a Chinese yam company in Zouping County, east China's Shandong Province, checks sales data on the company's website. The county is famous for Chinese yams, and local farmers promote Chinese yam sales through e-commerce platforms (DONG NAIDE)

Wei said there are two mistaken ideas in the development of rural e-commerce: considering e-commerce an independent industry or considering e-commerce just a marketing method. Both methods ignore the connection between e-commerce and real industries, making e-commerce directionless, like water without a source.

Rural e-commerce needs policy support, government investment and technologies. To grow e-commerce in rural areas that are less developed than cities, the government must play a chief role.

On the other hand, many local governments only focus on setting up e-commerce industrial parks or attracting investment, but give inadequate support to online shops opened by farmers. For instance, it is difficult for farmers to obtain loans or enjoy policy support for opening online shops.

In Wei's opinion, without supporting policies and services, the development of the e-commerce industry will remain fragile.

Logistics also impede the development of e-commerce in rural areas.

Many farmers are interested in opening online shops, but few of them have gone into action. An important reason is the restriction of logistics, said Wei. At present the logistics costs are high to develop e-commerce in rural areas, especially those mountain areas.

Li also said, restricted by various conditions, logistics costs in rural areas are usually higher than those in cities, impeding the transportation of farm produce out of rural areas and that of industrial products into these areas.

Promotion on all fronts

To accelerate the development of rural e-commerce, Li said commerce and agricultural departments should strengthen the research, formulation and implementation of rural e-commerce policies.

Another research report released by Taobao.com last September shows online shops in counties will need 2 million employees in the next two years.

"At present, a large number of young migrant workers are returning to the countryside from cities. I suggest the government strengthen training of farmers and university graduates to work for rural e-commerce through various training measures," said Wei.

"The government must also attach importance to the construction of industrial chains, including telecommunications, logistics, packing and processing, as well as supporting small online shops while introducing big investments," Wei stressed. "Through establishing local farm produce brands and supporting county-level e-commerce platforms, the government can and should accelerate the development of e-commerce in rural areas."

Leading industrial companies and farmers' cooperatives should also be fully utilized to accelerate the development of rural e-commerce, said Li.

To solve the problem of logistics, Li suggested the government use the post networks as the logistics platform for rural e-commerce, since the China Post has established complete mail delivery networks all over the country.

Perhaps then, farmers like Liang can better share their lush—and tasty—products with the rest of the country.

Copyedited by Kylee McIntyre

Comments to wangjun@bjreview.com

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