In rural China, shoppers go online - with a little help

Thu Jul 30, 2015 6:12pm EDT
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By Sue-Lin Wong

TONGLU, China (Reuters) - Cheng Yonghao left his village in central Henan province almost 20 years ago, not expecting to return. He's now back home, and this week opened a village store to help locals shop online.

Cheng is just one of an army of local recruits who are part of Alibaba Group's big bet on rural e-commerce as China's internet giants invest billions in outpost service hubs to tap a market twice the size of the United States.

E-commerce growth in the countryside now outpaces that in major cities, though fewer than one tenth of online purchases made on Alibaba platforms were shipped to rural areas in the first quarter of this year. Alibaba estimates the potential market at 460 billion yuan ($74 billion) by next year.

Rival also says that developing rural e-commerce is a key strategy this year.

While the rewards are enticing, few are making money yet.

"We don't know when our rural e-commerce operations will become profitable, but there's value in what we're doing, there's consumer demand," Gao Hongbing, director of Alibaba's research arm, told reporters earlier this month.

TRAIN THE TRAINER   Continued...

Zheng Liying looks at a computer screen in front of a picture of Alibaba founder Jack Ma, seen on the cover of a publication, at Zheng's Alibaba rural service centre in Jinjia Village, Tonglu, Zhejiang province, China, July 20, 2015. REUTERS/Aly Song