JD.com: The Influence of Chinese E-Commerce on Local Farming

Major e-commerce platforms have initiated strategic programs where they market agricultural products. For instance, Alibaba has created various clusters of digital sellers and other provisions that have brought business and job opportunities to rural areas. Other platforms such as JD.com have an asset-heavy strategy and drone to strengthen their in-house logistics. JD.com has also developed Chinese rural service centers.

Besides JD.com, other platforms include Kuaishou and Pinduoduo. Kuaishou is a short video platform that invests in the flow of data resources to promote agricultural produce. Pinduoduo has registered a successful agricultural product sale through its anti-poverty initiative, which has tripled to nearly $9.3 billion. In comparison to other competitors, this particular platform resonates better with the rural community. It specializes in the lower market and offers cheap products for users on a tight budget.

Since the foundation of Pinduoduo, agricultural produce is seen as a strategic industry. Most recently, the platform developed a $1.6 billion project that promotes agricultural products.

Why Does China Choose E-commerce Options?

E-commerce solves multiple flaws in the marketing strategy of agricultural products. This is crucial as the products are poorly standardized and highly perishable. In China, agricultural products are cultivated on a small scale with minimal to no planning. There is a need for transparent engagement with consumers, larger markets, robust demand, and more demands for rural communities to make sound decisions on planting. E-commerce breaks informational and geographical barriers and offers a natural solution to these problems.

Rural e-commerce is in line with the demands of stockholders in the system. It gets support from the government and those that see it as an opportunity to advance the poverty alleviation agenda in China. The urban markets are saturated, which makes the rural markets an avenue for technology companies. In addition, most former migrant employees bring labor and expertise back to the rural regions once they get back to their hometowns.

E-commerce Vs. Traditional Networks

Conventional informal networks are forcing rural communities to move their sales to online platforms. In the past, agricultural products were sold through a less centralized marketing network. It involves many levels with commissioning agents. The informal network operates on cash and interpersonal trust where all involved rely on one another. Every participant shares the risk and benefits from the unique information advantage. Even though middlemen have a privileged position in this network, they have an incentive to enhance the survival of farmers by providing long-term credit.

With this chain, there is a buffer between the institutionalized market and small landholders. Nonetheless, the informal system encounters competition from online platforms. As more cities adopt digital networks, traditional methods are slowly being wiped out and replaced. For instance, retail and wholesale markets are moving to urban areas. On the other hand, e-commerce is exclusively institutionalized. E-commerce algorithms also promote some crops with high-profit margins and sales.

More Than Branding

The success of the current digital agricultural product marketing can be attributed to the traffic flows and intervention of institutions. Governments offer favorable laws, subsidies, and policies while e-commerce invests in the data flow, infrastructure constructions, funds, and training. These platforms promote high-value-added products online, thanks to celebrity endorsement. For instance, Running Chicken costs approximately RMB 100 for one kilo, which is thrice the average price.

Nonetheless, the typical rural community misses out as only a few have embraced e-commerce marketing channels. The network is all-inclusive, and therefore, more can benefit from joining the online market. This will not only advocate for the poverty alleviation movement but also remove the mysterious veil of tech. There is more than branding when it comes to e-commerce transactions—using e-commerce platforms to market agricultural products can turn around the accessibility of the goods. It also introduces sellers to a larger market.

The Takeaway

E-commerce platforms are reliable platforms that support and favor those in the selling and buying cycle. Though a lot needs to be done to consolidate the marketing structure, farming products can now be accessed through your mobile device.

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