How China’s internet boom is creating new jobs in the country’s rural areas
With the development of China’s broadband infrastructure as well as rapid adoption of online shopping and mobile payments, the rural areas are shaping up to become the next engine of growth for the world’s largest e-commerce market
When Luo Zhaoliu decided a year ago to quit his job in Shenzhen, the southern coastal city striving to be the Silicon Valley of China, he joined other aspiring entrepreneurs who are pushing the country’s digital revolution into the next frontier for innovation and productivity: the rural areas.
Luo, 34, returned to his hometown, a remote village in Wan’an county in the southeastern province of Jiangxi, to start a business making fermented bean curd, following nine years as a research and development engineer at a company that made components for electric cars.
He established a small factory, recruited middle-aged and older people from his village as employees, and set out to sell the Chinese condiment nationwide through major online retail platforms.
It is a venture that showed how China’s internet revolution and advances in technology have started to open opportunities for entrepreneurs in rural areas to build viable businesses, while creating new jobs to revitalise local communities, he said.
Luo’s efforts are a reminder of the disparity in development that still remains between China’s big cities and rural areas, where employment opportunities are scarce and many residents have to find work in urban areas to support their families, which they have to leave behind.
With the development of China’s broadband infrastructure as well as rapid adoption of online shopping and mobile payments, the rural areas are shaping up to become the next engine of growth for the world’s largest e-commerce market.
Most Chinese in the country’s vast rural areas however, have not adopted the internet lifestyle as much as those in urban areas, where the internet is a part of daily life – from watching films and buying insurance to hailing a ride and ordering food delivered to their doorstep.
Growth in China’s internet usage received a big boost in 2015 when Beijing unveiled its Internet Plus strategy – a concept to integrate the mobile internet, cloud computing and big data for manufacturing, and promote the development of e-commerce.
Usage may get a further lift after Premier Li Keqiang, in his recent speech to the National People’s Congress, called on the nation’s telecommunications industry to abolish domestic data roaming fees as well as further cut the cost of broadband services for residential and business customers.
China, which has more than 600,000 villages, had 772 million internet users and 1.4 billion mobile subscribers at the end of last year. There were US$5.5 trillion worth of mobile payment transactions in 2016, according to internet consulting firm iResearch.
Research eMarketer has forecast retail e-commerce sales in China to reach US$2.7 trillion in 2021, up from an estimated US$1.5 trillion this year, to account for 59.4 per cent of such sales worldwide.
Wan’an county has long been known as part of the area where Mao Zedong first established a self-governing region under the Chinese Communist Party during the country’s civil war, which took place from 1927 to 1936.
Local people in Wan’an, however, had also been considered as part of a large impoverished group in China left behind by the economic growth over the past decades, following the country’s economic reform programme from 1978.
“Although Wan’an is a beautiful place, with green hills and clear waters, it’s remote and inaccessible,” Luo said. “People here have found it hard to make a living based on agriculture.”
He said most people in his hometown are between 40 and 50 years old, with little education or skills apart from farming.
“Many of them found work as migrant workers in factories in the urban cities when they were young. But as they got old, they became jobless and had to return home,” he said. “I hope my business could help some of them.”
In late 2016, Luo raised 900,000 yuan (US$142,000) to set up his fermented bean curd factory. He hired 15 middle-aged and older people from his village to produce the condiment, based on his family’s original recipe, under the“Luo Doudou” brand.
All the work is indoors, so it is a much easier job for his elderly employees, Luo said.
Wan’an’s fermented bean curd is made with locally sourced natural tea oil and yellow rice wine, which contribute to the special flavour, he said. No nitrite is produced because the basic processing for fermented bean curd has not changed much in centuries.
“Both my parents and grandparents had made a living by making fermented bean curd and selling to neighbouring villagers. I once swore to study hard, leave the village and spend the rest of my life in the metropolis,” Luo said.
“Now, I find that I have a better career as an entrepreneur back in the countryside, thanks to the internet boom on the mainland.”
He launched Luo Doudou’s store on Taobao Marketplace, the largest online shopping platform of Alibaba Group Holding, and on WeChat, the do-everything social media-messaging-and-payments platform of Tencent Holdings. New York-listed Alibaba owns the South China Morning Post.
Last year, Luo sold more than 60,000 bottles of fermented bean curd online and at bricks-and-mortar stores.
Demand has increased through positive word of mouth over social media, said Luo, who plans to hire 30 more elderly workers from his village to keep up with production.
He said that initial taste of success has given him confidence to bring more products made in rural China to the dining tables of the nation’s urban cities.
Another native of Wan’an, former journalist Liang Lu has also embarked on a mission to help local farmers from going bankrupt amid difficulties in selling their produce.
“Local farmers know little of how to process raw fruits into products for consumption in the urban areas. They used to just sit and wait for buyers as they sold fruit beside on the side of the road,” Liang said.
“Few motorists stopped to buy fruit because they would ride through the newly built motorways. So for the past few years, the farmers had to dump rotten grapes and oranges on the roadside.”
Heartbroken by the farmers’ plight, Liang said he took to social media to spread news of their situation.
“Many social media users in Guangdong province, such as those in Dongguan, Shenzhen and Guangzhou, were touched by the farmers’ plight and made orders,” Liang said. “So in 2016, I was helped by the farmers and four friends to transport about 7,000 kilograms of grapes to Guangdong. They were all sold in a couple of days.”
“The farmers have since learned to do business online,” he said.