E-commerce and Countryside in China | Daxue Consulting

E-commerce and countryside in China,
The Next frontier
April 2018
By Daxue Consulting
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Internet in rural and urban China
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– Daxue Consulting [Beijing, Shanghai, Hong-Kong] – – April 2018 – – All rights reserved –
INTERNET IN RURAL-URBAN CHINA TAOBAO VILLAGES ONLINE SHOPPING IN RURAL AREAS ABOUT DAXUE
Internet in rural and urban China (1/4)
More and more Chinese people are leaving rural areas to settle down in urban areas.
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Source: Slides from the Alibaba Group, 2016
INTERNET IN RURAL-URBAN CHINA

The number of internet users in China remained stable over the past few years.
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Source: CNNIC reports on China’s rural internet development

Internet access in rural areas is still limited in comparison to urban areas.
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Source: CNNIC report on China’s rural internet development, 2016
Rural-urban internet and mobile payments usage (% population) (2016)

The lack of computers and internet access explains the lower use of internet in rural areas.
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Source: CNNIC report on China’s rural internet development, 2016

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Taobao villages insights
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Taobao villages insights (1/8)
A “Taobao Village” (淘宝村) is a cluster of rural e-tailers within an administrative village where... :
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TAOBAO VILLAGES
Residents got started in e-commerce spontaneously with the use of
Taobao marketplace
Total annual e-commerce transaction volume is at least 10 million
RMB (= $1.6 million)
At least 10% of village households actively engage in e-commerce,
or at least 100 active online shops have been opened by villagers
Source: Alizila News, An introduction to Taobao villages, January 2016

Taobao villages are all over China.
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Source: Slides from the Alibaba Group, 2016
Provinces with Rural Taobao presence
TAOBAO VILLAGES

It took only 4 years to establish more than 2,000 Taobao villages in China.
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Source: AliResearch reports, Alibaba Research Center for Rural Dynamics
TAOBAO VILLAGES

Most of the Taobao villages are concentrated in 6 provinces.
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2014
Source: AliResearch report, Alibaba Research Center for Rural Dynamics, October 2016
TAOBAO VILLAGES

“Taobao Town” is defined as a town, when it comprises at least three Taobao Villages.
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TAOBAO VILLAGES

Some Chinese cities gather dozens of Taobao villages.
Ranking City Province Number of Taobao
villages
1 Taizhou 台州 Zhejiang 浙江 107
2 Wenzhou 温州 Zhejiang 浙江 101
3 Jinhua 金华 Zhejiang 浙江 95
4 Guangzhou 广州 Guangdong 广东 91
5 Quanzhou 泉州 Fujian 福建 69
6 Hangzhou 杭州 Zhejiang 浙江 65
7 Heze 菏泽 Shandong 山东 61
8 Shantou 汕头 Guangdong 广东 50
9 Suqian 宿迁 Jiangsu 江苏 50
10 Suzhou 苏州 Jiangsu 江苏 46
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Top 10 cities by the number of Taobao villages (2016)
TAOBAO VILLAGES

A taobao village cluster gathers at least 10 Taobao villages and makes more than 100 million RMB annually.
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Top 10 Taobao villages clusters in China (2016)
Ranking County / District Province Number of Taobao
villages
1 Yiwu City 义乌 Zhejiang 浙江 65
2 Wenling City 温岭 Zhejiang 浙江 54
3 Caoxian County 曹县 Shandong 山东 48
4 Puning City 普宁 Guangdong 广东 48
5 Suining County 睢宁 Jiangsu 江苏 40
6 Jinjiang City 晋江 Fujian 福建 32
7 Baiyun District 白云 Guangdong 广东 32
8 Panyu District 番禺 Guangdong 广东 32
9 Shuyang County 沭阳 Jiangsu 江苏 31
10 Ruian City 瑞安 Zhejiang 浙江 30
TAOBAO VILLAGES

“Clothing” is the most popular commodity in Taobao villages.
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Ranking Commodity
1 Clothing
2 Furniture
3 Shoes
4 Auto supplies
5 Suitcases, bags, leather products
6 Toy
7 Household commodities
8 Bedding
9 Outdoor supplies
10 Main home decoration materials
Top 10 commodities by sales revenue of Taobao villages in China (2015)
Source: AliResearch report, Alibaba Research Center for Rural Dynamics, 2015
TAOBAO VILLAGES

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Online shopping in rural areas
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Online shopping in rural areas (1/4)
The number of netizens remains stable in rural areas, while they are increasingly engaged in online shopping.
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Source: CNNIC reports on China’s rural internet development
ONLINE SHOPPING IN RURAL AREAS

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Rising internet penetration rate
Growing income
Promoting policies
Decrease of offline trade
E-commerce main players moving to the countryside
Rise of consumption
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Source: AliResearch report, Alibaba Research Center for Rural Dynamics, 2015 (translated from Chinese)
Major reasons for the rapid growth of online shopping in rural areas

The e-commerce development already contributes to the growth in rural areas.
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Source: The Economist Intelligence Unit

Whether e-commerce services exist or not strongly impacts the wealth of Chinese households.
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Source: AliResearch and SWUFE, 2016

About us
Daxue Consulting is a market research and management consulting firm focusing on the Chinese market. We are leveraging a
multiple-methodology approach in order to support clients’ needs, auctioning traditional methodologies as well as technology-driven
tools.

With offices in Beijing and Shanghai (as well as a commercial representation in Hong-Kong), Daxue Consulting’s team is composed of
local and overseas-educated Chinese and china-educated foreign project managers. Our commitment to understanding clients’
challenges and base all our recommendations on data have convinced more than 120 clients to work with us and come back to us for
new research projects. In total, we conducted more than 250 projects over the last 6 years.

With a team of 15 full-time project managers and a network of hundreds of data-miners, Daxue consulting is able to cover China
entirely in terms of data collection and research. Daxue Consulting is often solicited in order to work on market sizing, market
opportunity assessment, acquisition and target identification, consumer understanding. We have worked with major international
companies as well as for SMEs.
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ABOUT DAXUE

Disclaimer
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E-commerce and Countryside in China | Daxue Consulting

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