Chinese e-commerce tycoon Jack Ma is considering launching a shopping day designed especially for China's rural community after China's largest online shopping festival on Nov. 11.[Tech.sina.com.cn] |
Chinese e-commerce tycoon Jack Ma is considering launching a shopping day designed especially for China's rural community after China's largest online shopping festival on Nov. 11.
According to China Entrepreneur magazine, Sun Lijun, Vice President of Alibaba Group revealed Ma got the idea as the shopping spree day is approaching when e-commerce giants furiously compete to attract customers.
Alibaba Group's sales data suggest there are already more than eight million people who purchase goods worth 4,000 yuan (US$628.8) per month. The rise of an elite middle class has helped boost China sales of foreign brands.
But Sun said the rural section of Taobao.com under Alibaba Group will also join in the Nov. 11 shopping festival. And the rural e-commerce will be one of the future strategies of Alibaba Group. The company is hoping to explore this new horizon as there are 600 million people in China still residing in rural areas.
Taobao launched its first rural service station in Tonglu County, Zhejiang in October last year. Alibaba is reportedly planning to invest more than 10 billion yuan (US$1.573 billion) in 3 - 5 years to build 1,000 county service stations and 100,000 village service stations.
Currently, the rural Taobao service stations have covered 6,000 villages in 27 provinces which are expected to attract tens of thousands of villagers to join in the 11.11 Shopping Festival.
The 11.11 Shopping Festival ("Double 11") began in 2009, with 27 merchants participating. It was an event for Alibaba Group's Tmall.com merchants and consumers to raise awareness of the value in online shopping. Since then, millions of consumers have flooded to websites for the bargain shopping spree every year.
Alibaba's rivals, like JD.com, also have similar online shopping festivals on the day. Alibaba Group alone announced a stunning US$9.3 billion gross merchandise volume settled through Alipay on Alibaba's China and international retail marketplaces on Nov. 11 last year.
China Internet Network Information Center statistics show that, by December 2014, there have been 178 million rural Internet users, while 77.14 million of them purchased commodities via cyberspace.
Zhang Yong, Alibaba's CEO, believes there is huge potential in rural customers going beyond the average imagination.
Jack Ma said in a public mail to shareholders that the 11.11 Shopping Festival proves China doesn't lack domestic demand. "We should think about how to ignite the power of consuming, no matter whether we promote imported goods, or we improve demand from third and fourth-tier cities and 600 million farmers."
There are also many limits and disadvantages for rural markets such as odd and fake goods ignored by the mainstream market, which also lacks of supervision. Another issue is the carrier and shipping services available, as many rural areas are too remote.
However, Alibaba is building the networks in China's countryside and is also exploring the potential of rural tourism, Zhang Yong said. They called it building an Alibaba's "ecological system" for rural economy. Many household appliances giants, such as TCL and Haier, have made deals with Alibaba to try to expand into the once ignored rural market.
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