how to promote transformation and upgrading of agriculture by e-commerce- shuyang case from china

How to realize agriculture and rural transformation by E-commerce---ShuYang case

from China

Professor Hongdong Guo

China Academy for Rural Development, Zhejiang University

E-mail: [email protected]

Questions to be Discussed

•What is agriculture and rural transformation?

•What is a successful agricultural and rural transformation?

•How to realize agriculture and rural transformation ?

Successful agriculture and rural transformation

• Part time farmers turn to professional farmers

• Low value-added products turn to high value-added products

• The short industry chain becomes a long industrial chain

• Not competitive to competitive

• Low income farmers turn to high income farmers

• Scattered production into cluster production

• Poor rural areas become rich and beaufiful areas

Challenges facing agriculture and rural areas in china

• Difficult product sales• High production cost• Industry is not competitive• Hard to make money in

agriculture• Poor farmers• Young people are not willing

to specializes in agriculture• Rural hollowing

• In order to solve the problem of agriculture and rural development Chinese government has taken many measures, and one of the important measures is to encourage the use of information technology, especially e-commerce to develop rural areas.

Two main forces driving e-commerce development

Government

( Alibaba,JD.com,Tencent etc.)

E-commerce giants

Government support – Policies

• “The guidance on the promotion of e-commerce developmentin rural areas”.State Council General Office

• “The guidance on the accelerated development of e-commercein rural areas”.Chinese Ministry of Commerce

• The project of “ information used in rural areas.”Department of Agriculture

Source: Aliresearch

Cultivate market participation

Build up basic infrastructure

Issue policies and create service environment

How to realize agriculture and rural transformation by E-commerce---ShuYangcase from China

沭阳简介[SHU

YANG ]

located in Northern Jiangsu Province

the second most populous county in China

the most populous county in Jiangsu Province

Shuyang is a typical large county of agricultural population with a large agricultural population and a poor farmer.

favorable location

north latitude 34°

innovation

Poverty gives rise to the desire

for change

tradition

Dynasties of Ming and Qing

Hu's Garden

Shuyang: County of flowers and trees in China

浙江大学中国农村发展研究院

中国农村电商研究中心

the development process of rural

e-commerce in Shuyang

germination: 2000—2006

gallop: 2013—nowbreakthrough:2007—2012

• low Internet

connectivity

• webpage

• high Internet

connectivity

• the third party e-

commerce platform

• e-shops

• the upgrading of

infrastructure

• new supply networks

• government involvement

• service system

• Taobao Village → Taobao

Town → Taobao Village

Cluster

Farmers sell flowers and trees byE-commerce wide spreadly now

8 billion 500 million yuan e-commerce business turnover in 2016

33 thousand e-shops 2.7 parcels per second

2016

85million

201570million

2017before

AUG69million

the number of parcel

The development of e-commerce is very fast

三 Part-time farmers become professional farmers



Scattered production into cluster production

1991 2001 2015

3 thouand mu

40 thousand mu

500 thousand mu

二

30 thousands farmers do business

洒水壶、保鲜膜

鲜花、干花

花盆、肥料籽种、树苗

盆景、乔木

铁锹、遮阳网

商品种类一应俱全

field cultivation

nursery stock

horticulture

green

Low value-added products turn to high value-added products

colorful potting



R & D breeding cultivation marketing

processing

tourism

original chain extended chain

The industrial upgrading of flowers and garden plants:

extension of industrial chain

Not competitive to competitive

Shuyang

40%

the total sale of flowers and garden plants on Taobao platform



More and more local people get a job

employment250,000

5000

Young people returned and started e-business



Happy family



Farmers' net income grew rapidly

nice car pretty house

Farmers become rich farmers

Poor rural areas become rich and beautiful areas

charming countryside in Shuyang



government / policy

e-commerce ecosystem

agricluture

farmers

wealthy farmers

powerful agriculture

beautiful contryside

entrepreneurshipinnovations

The development mode of Shuyang's rural e-commerce

e-commerce ecosystem

e-commerce

Key factors for the success of Shuyang Case



The first key factors:

farmers' entrepreneurship and innovations



industrial foundation

physical cost

risk cost

learning cost

embeddedness

cost-oriented

locally-oriented

grounded entrepreneurship

result in

The second key factors: good industrial foundation



electronic commerce platform

physical cost

risk cost

learning cost

asset-light

cost-oriented

locally-oriented

grounded entrepreneurship

support

The third key factors: favorable e-commerce platform



The third key factors: favorable e-commerce platform



low logistics cost → online competition

The fourth key factors: efficient logistics system



缺

氛围

人才

网货服务

设施

try to understand

the present

situation and act

appropriately to

the situation

Last but not least: role of government

Shortages?????

atmosphere

talentsfacilities

service product

the government: improve infrastructureroad and

transportationnetwork facilities

e-commerce service center Free Talent training Support in terms of funds, sites, taxes, etc.

the government: policy support



have a sound e-commerce ecosystem

e-businesmen

e-service provider

platform firm

training agency finance

agency

public sector

e-commerceassociation

product provider

logistics firm

industrypark

supply network

e-business' needs

commodity supply loan training image processing brand design e-shop

decoration marketing

tactics data analysis Logistics

Conclusion and Implication

•E-commerce is an important means to promote the transformation of agriculture and rural areas

•The governments of developing countries need to continue promote the access of the Internet and the development of e-commerce in rural areas to create a sound e-commerce ecosystem for farmers.

how to promote transformation and upgrading of agriculture by e-commerce- shuyang case from china

Economy & Finance