China’s Ministry of Agriculture announced on Tuesday it would conduct rural e-commerce trials in 10 provincial regions including Beijing, Jilin, Hunan, Chongqing and Ningxia this year, reports 21st Century Business Herald, an affiliate of Guangzhou-based Nanfang Media Group.
According to the ministry, e-commerce trials of fresh agricultural products will be launched in seven Chinese provincial areas, Beijing, Hebei, Jilin, Hunan, Guangdong, Chongqing and Ningxia; e-commerce trials of agricultural inputs will be conducted in four provinces including Heilongjiang and Jiangsu; and leisure agricultural e-commerce will proceed ahead in Beijing and Hainan.
The trial of fresh agricultural products will introduce four forms, including direct delivery from rural bases to urban communities and from wholesale markets to families. Song Junwen, the person who was in charge of the Fresh Agricultural Products Cooperative said that since the document stresses the role of the Internet in promoting sales and agricultural products, the next step by the government is very likely to combine the strength of traditional agriculture companies and the Internet.
China casts huge market expectations on agricultural productive materials, of which the trial will include setting up an online sales platform and e-commerce service system for agricultural materials and supporting e-commerce companies to build a big data analysis system.
Besides the three kinds of trials mentioned above, the document also introduces agricultural financial services. Loans for agricultural materials, and insurance on agricultural production, shall be provided through close cooperation with banks and insurance companies.
Rural e-commerce policies have been steadily introduced since 2015, and this year has already seen a number of e-commerce companies enter rural China. The Chinese government will focus its attention on reforming the supply side of agriculture in 2016.
Tech companies including China’s largest e-commerce platform Alibaba and China’s second largest e-commerce platform JD.com, have made attempts at offering agricultural financial services. On Tuesday, JD Finance announced it would partner with China United Property Insurance Company Ltd, and a husbandry financing assurance company, to cooperate on providing agricultural financial services.
The rural e-commerce trial will tackle many of the problems tech companies have been faced with including agricultural development models, logistics and quality and safety controls for agricultural products.
For many companies this document gives them clear direction on development models. Zhu Jun, General Manager of a department under the Taobao Nongcun(countryside) Business Division, said this document is more specific and practical than previous policies because it directly introduces several models of development, including the basic forms of retail, in addition to demand based production and contract farming models.
Despite this, most heads of e-commerce retain concern about logistical difficulties and specifically, completing the last leg of the delivery process in remote areas, in addition to the high cost of cold-chain logistics.
A major concern though is the cost incurred ensuring food safety throughout the production and distribution chain, and identifying and addressing risks. The document requires strengthening the existing system, that allows traceability and supervision for fresh agricultural food products, ensuring quality and safety.
(Top photo from Baidu Images)