According to research recently released by bjbusiness, roughly 64% of netizens in rural China shop via mobile phone, far in excess of those who shop by PC (~36%). In many of China’s less developed markets, the smart phone is indeed the key gateway to internet access rather than the PC due to the lower device cost when compared with the PC. E-commerce penetration in rural areas has risen substantially, as key e-commerce players such as Alibaba and JD shift their strategic focus from top-tier cities to rural areas. Mobile usage meanwhile has come to embrace online shopping quite rapidly and seamlessly.
Roughly 74% of rural netizens indicate Taobao and Tmall as their most frequently visited e-commerce sites, while ~19% tend to use the B2C players JD and Yihaodian as their first choice. The numbers above in our mind reflect the strength of Alibaba’s brand awareness as the largest e-commerce platform in China. We meanwhile expect JD’s brand influence to grow further, driven by its aggressive rural area expansion plan articulated at the outset of this year. JD’s most popular online shopping category is appliances & electronics, followed by apparel and agricultural products. Alibaba and JD have actively engaged in online agricultural product sales in rural areas. The platforms sell products such as seeds, fertilizer and agricultural appliances. Some 10% of rural consumers indicate that they are now accustomed to purchasing agricultural products online.
How Rural China Logistics is Handled by eCommerce Firms ?
Logistics and fulfilment are still the largest concern for rural consumers when they shop online. Roughly 18% of rural online buyers are displeased with logistics, a level significantly higher than that of higher tier urban consumers, reflecting the relatively undeveloped logistics networks found in most lower tier markets. We believe logistics will prove amongst the most critical competitive tool in acquiring rural customers. Those market participants that can provide the best fulfilment experience for customers are likely to win big in the battle for online customers.