‘Taobao villages’ take off thanks to online entrepreneurs

By Li Qiaoyi in Shuyang and Song Shengxia in Beijing Source:Global Times Published: 2016/11/9 20:13:39

Unlocking rural retail’s potential

With Taobao villages sprouting like mushrooms in vast rural China, a multitude of farmers have shifted toward living off e-commerce, casting a new light on rural job creation that is often obscured in the country's overall employment landscape. The stories of two young people in Shuyang county, East China's Jiangsu Province, shows of how e-commerce has profoundly changed the way rural residents live and work.

A Taobao village specializing in the sale of garden miniatures in Zhouquan in Shuyang county, East China's Jiangsu Province, on October 30. Photo: Li Qiaoyi/GT

A Taobao village specializing in the sale of garden miniatures in Zhouquan in Shuyang county, East China's Jiangsu Province, on October 30. Photo: Li Qiaoyi/GT

Crippled in the lower part of her right arm, Li Min, a 22-year-old with a degree in fashion design, found it hard to find a job four years ago, even though she graduated at the top of her class.

Later that year, Li from Shuyang county in East ­China's Jiangsu Province, opened an online store on Taobao, the largest e-commerce website in China, to sell potted flowers and plants.

The virtual store opened a gate that she could enter. "Plants sell extremely well in winter, especially when choking smog hits the country," she told the Global Times on Sunday.

The young woman's online store racks up 1,500 yuan ($221) per day in sales on average, earning her 45,000 yuan a month. She has hired three workers to handle customer service and packing, and expects sales to double during the upcoming Double Eleven (November 11) shopping extravaganza.

Her inspiring story has earned her a nickname - ­Online Venus. Over the past four years, while running the online shop on and off, she has gotten married and had a baby.

Rural job creation

E-commerce is also working its magic as a job creator in the case of Zhong Ji, who is also from Li's hometown. The 27-year-old veteran and once a national martial arts champion told the Global Times on Sunday that he found himself lost after being discharged from the army in 2009. "It's hard to adapt to civilian life, and [I] wanted to do something big and challenging," he said.

He stayed in the Special Duties Unit of the local police for about two years before he decided in 2011 to open an online store on Tmall, Alibaba's online platform, to sell children's books. Thanks partly to his luck and partly to his hard work, his online book store brings in 30 million yuan in sales a year, ranking among the top three online book stores in Shuyang.

Over the past five years, he has expanded his business to four stores on Tmall and 10 stores on Taobao and hired 50 workers for customer service, warehousing and packing.

He expects that book sales could reach 1 million yuan during the upcoming November 11 shopping festival and sales of shoes and clothes could top 3 million yuan.

These compelling stories, epitomizing a bourgeoning Taobao village phenomenon, give more clarity to the often invisible part of China's job market.

E-commerce platforms, notably Alibaba's Taobao and Tmall, have come across as hitting the accelerator on job creation in the country's vast rural area, where occupations other than farming are being eagerly sought, especially by younger rural residents.

Take Shuyang, home to one of the country's top five Taobao village clusters, as an example. By Alibaba's definition, a Taobao village is a village where more than 10 percent of local households run online shops that net annual online sales exceeding 10 million yuan.

According to data disclosed by the county government at the fourth Taobao Village Summit Forum, which was hosted in Shuyang at the end of October, the county's online merchants have so far hit more than 30,000.

That figure is a fraction of jobs added thanks to the buoyant Taobao village phenomenon. Active online stores in Taobao villages across the country total more than 300,000, according to a report released by Aliresearch, ­Alibaba's in-house think tank, at the annual forum, which was held outside Alibaba's birthplace of Zhejiang Province for the first time.

It is estimated that an active online store is capable of creating 2.8 direct jobs in Taobao villages, according to ­Aliresearch, so at least 840,000 jobs have thus been created due to the fast-paced expansion of the villages.

By the end of August, the number of Taobao villages in the country had reached 1,311, up dramatically from last year's 780, the Aliresearch report said.

Alibaba President Jin Jianhang expects the number to skyrocket. He told the Global Times on the sidelines of the forum that Taobao villages will top 10,000 in the future, though he didn't give an exact time frame.

Jin believes the 10,000 mark can be hit due to rural China being integrated into the modern economy as a consequence of the country's infrastructure building efforts, which include equipping villages with high-speed Internet connections and logistics networks.

If Jin's theory proves right, vast rural areas will be expected to become a bright spot in China's overall job-creating landscape.

Deeper issues

With rapid growth also comes concerns over the true viability of Taobao villages, which often see villagers selling identical products and thus easily falling into price wars.

In a speech at the forum, Wei Yan'an, head of the rural work department of the Shaanxi provincial committee of the Communist Youth League, suggested that "Taobao villages also need an upgrade to avoid being equated with the marketplace of products that are mediocre and cheap."

Some rural online merchants have already taken note of the need to move up the entrepreneurial ladder. For example, Zhong from ­Shuyang, who started selling books and later diversified into shoes and clothing, set up a physical shoe plant of his own in 2014, designing, manufacturing and selling shoes under his own brand.

On top of that, the wealth creation enabled by the prevalence of Taobao villages is seen as hiding deeper social problems, observers have pointed out.

Relative to the common sight of migrant workers leaving their parents and children at home, a new phenomenon has emerged - an increasing number of the core rural labor force is looking to make a living off of online retailing, Chen Hengli, author of The First Taobao Village in China, noted in a panel discussion at the forum. The most successful ones have turned out to be "left-behind" as they send their children to urban areas in pursuit of a better education. They also send their parents too to take care of their children.

"It has so far remained beyond the capacity of Taobao villages to fully address the country's urban-rural divide, notably in the areas of education and healthcare," Wang Dan, China analyst with the Economist Intelligence Unit, told the Global Times.


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