Julie Makinen reported on the front page of Sunday’s Los Angeles Times that, “Rural Taobao is an ambitious effort by Alibaba to turn China’s 600 million rural residents into online shoppers — and sellers — at a time when the company’s growth in transactions is slowing and China’s economic growth has ebbed to a 25-year low. In the last year and a half, the company has enlisted more than 15,000 village ‘partners’ like Luo Rong and hopes to have at least 40,000 by this time next year. Alibaba says it plans to invest $1.6 billion in the effort through 2019, with the ultimate goal of opening 100,000 Rural Taobao centers.
“But the company is hardly going it alone. It’s getting a big helping hand from the government, which is footing the bill to renovate storefronts like Luo’s, sending officials out to talk up e-commerce to skeptical farmers, providing gratis space for new logistics centers and deploying propaganda workers to promote Rural Taobao.
“The ministries of commerce and finance have allocated $300 million to 200 rural counties to spend on warehouses, training and anything else that might push the project forward.”
The article explained that, “While it’s inconceivable that Uncle Sam would offer such assistance to, say, EBay or Amazon, China’s Communist Party leaders see no problem working hand-in-glove with a company like Alibaba when it suits national aims. Government officials and Alibaba executives say Rural Taobao jibes neatly with national goals such as boosting consumer spending to fuel economic growth, narrowing the income gap between urban and rural citizens, promoting entrepreneurship and harnessing the power of the Internet to invigorate backward regions.
“And while China is still expecting an additional 200 million or so people to move from the countryside to its burgeoning cities, the government is aware that it can’t urbanize everyone.”
Sunday’s article added that, “There is great room to grow e-commerce in rural areas, Alibaba believes. Of the 600 million rural Chinese, only 77 million shopped online in 2014, according to data from the China Internet Network Information Center. In the first quarter of 2015, less than 10% of online purchases made through Alibaba platforms were shipped to rural areas.”
