AliResearch, the research arm of Alibaba Group, has released a new report on rural e-commerce in China. In 2013, online purchases on Taobao accounted for 8.6% of total consumption expenditure in rural China.

Source: AliResearch

Source: AliResearch

Though the individual purchase rate is low, 84.4% of surveyed consumers in rural areas said online shopping was acceptable.

The AliResearch report projects that the rural e-commerce market in China will reach RMB180 billion (US$29bn) by year end and over RMB460 billion (around US$75 bn) by 2016. It is expected rural residents will spend an average of RMB500 (US$80) to RMB2000 (US$300) via online shopping annually.

There are more than 480,000 Taobao stores operated by rural residents in China. More than twenty rural villages are called “Taobao Villages” where they are crowded with Taobao retailers.

Alibaba announced today plans to invest RMB10 billion (about US$1.6bn) in infrastructure and logistics in rural China, build 1000 county-level operation centers, create new services tailored to rural e-commerce, and to train retailers in rural areas, amongst others. The integration of rural China into the e-commerce marketplace is underway.