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15 July 2015

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Farmers Use E-commerce to Maximize Profits

2016-11-04 Download Print

After harvesting potatoes on his plot, Hao Jinde saved some for his family to eat and sold the rest, over 500 kg, making 600 yuan (88 U.S. dollars).

Instead of peddling on the street as in the past, this year Hao sold them to a store belonging to the online shopping platform, Lecuntao, at his village in Jingle County, a potato growing region in northern China's Shanxi Province.

"Compared with selling to the local guys, I got about 50 yuan more," Hao said.

Lyu Yaofeng, manager of the platform's Jingle County branch, said the platform could purchase the potatoes at a higher price, as they would sell them for a much higher retail price to villages about 100 km away where they do not produce potatoes.

At the same store, Hao and other villagers now have direct access to pears and other produce that can be delivered to their village at lower than market price.

"Most of the produce online come straight from where it is grown, which ensures lower prices," said Li Erping, manager of the store in Hao's village.

Lecuntao is an e-commerce platform aimed at the rural market, which sets up physical stores in rural villages. Since it was launched in 2014, its physical store network has grown to over 70,000 villages in China's 25 provinces. Rural customers can either order online or make their purchases at the physical stores in their village.

While the Chinese government is advocating e-commerce in rural area as part of poverty reduction efforts, online shopping platforms, including Alibaba's Taobao and JD, are also expanding their services to rural villages, which have helped with sales of agricultural produce.

In late October, Chinese authorities for the Internet, national planning and poverty alleviation jointly released a plan on poverty reduction using the Internet, encouraging e-commerce in rural areas and promising to expand broadband coverage to 90 percent of China's poverty stricken villages by 2020.

According to the Ministry of Commerce, the number of online shops selling agricultural produce exceeded 1 million by September this year, bringing sales to 170 billion yuan, and they are expected to hit over 220 billion by the end of the year; that is 6.3 percent of total online sales, and a 35 percent increase year on year.

When farmers have difficulty selling produce, the Internet is now a major channel to turn to.

According to an official in Linxian County, a date growing area in Lyuliang, dozens of online platforms were used to sell slow-moving date stocks last year. Thanks to the online sales, date sales increased by 30 to 40 percent, saving local farmers from financial losses.

"The 'Internet+' concept has changed rural China," said Fan Wusheng, director of the poverty alleviation office in Jingle County. "With their produce sold online, farmers are now able to make maximum profits."


Source: Xinhua