Online retailing revitalizes rural consumption: report

Home>>

(People's Daily Online) 13:13, May 17, 2021

Online retailing is stimulating China's rural consumption, said a recent report issued by the Academy of China Council for the Promotion of International Trade (ACCPIT).

Villagers in Jiangyong county, Yongzhou, central China's Hunan province sell oranges on a livestreaming platform after collecting their harvest, April 29.

Every 10,000 yuan ($1,545) in income for farmers from agricultural products sold on online platforms generates a total of 3,528 yuan in consumption, 1,131 yuan of which goes to the online sector, the report said.

Fengxian county in east China's Jiangsu province is a producer of high-quality apples. However, due to the lack of a universal standard and branding, Fengxian's apples were not well introduced onto the market.

Thanks to e-commerce platforms, 20 percent more of locally grown apples have been commercialized, with sales revenues having meanwhile surged by 70 percent. In addition, over 2,000 jobs have been created in local communities.

"Enhanced purchasing power has come from the prominent income growth in rural areas, as well as the narrowing income gap between urban and rural residents," said Zhao Ping, deputy head of the ACCPIT.

Income is key to whether rural consumption can further unleash its potential, she added.

The report found that the longer farmers cooperated with e-commerce platforms, the more capable farmers and farm produce dealers are in terms of resisting shocks.

Last year, some of those who had cooperated for less than three years with e-commerce platforms suffered from losses, while this situation was not the case for those who had cooperated with e-commerce platforms for more than three years.

This meant that e-commerce provided a more secure sales channel for farmers and relevant dealers, and long-term cooperation could provide them with relatively more stable income, said Zhou Jinzhu, deputy director of ACCPIT's research division of international trade.

A woman introduces the process for making tea on a livestream platform in Baokang county, Xiangyang, central China's Hubei province, April 15.

Moreover, in general an additional year of using e-commerce platforms has led to 3,061 yuan extra in online consumption for rural consumers, the report said.

In addition, rural consumers living farther from urban areas tended to have a higher demand for online consumption, according to the report. That is to say, every one kilometer added to the distance between their residence and the nearest city is expected to result in 765 yuan more in terms of online consumption.

"This indicates that e-commerce is enriching their choices for commodities. The fast delivery does offer a quality consumption experience for rural residents who live far away from the cities," Zhou explained.

According to the National Bureau of Statistics, the growth of retail sales for consumer goods in rural areas outpaced that of urban areas for eight consecutive years from 2012 to 2019, while the growth of online retail in rural regions also exceeded that of cities during the period from 2015 to 2019.

The report said that in 2019, rural residents' tendency for marginal consumption stood at 0.858, which means that every one extra yuan of disposable income would generate 0.858 yuan of consumption, while the figure in urban areas meanwhile stood at 0.628.

"The growth potential of the rural market is huge, which will provide a strong growth engine for the Chinese consumption market," Zhao commented. 

(Web editor: Hongyu, Liang Jun)