Social e-commerce firm Pinduoduo is providing digital solutions to coffee bean farms in China’s southwestern Yunnan province as part of a broader collaboration between the Chinese government, domestic tech giants, and farmers to assist poverty-stricken regions.
Pinduoduo announced on Monday a digital package solution dubbed Duoduo Nongyuan (directly translated: Duoduo Farms) is helping with digitizing sales and distribution channels. The company plans to launch 1,000 initiatives in eight provinces in China’s western region over the next five years.
Pinduoduo and other major tech firms have been tapped by the government to leverage technology and provide support for farmers in provinces defined by high poverty rates. A total of 792 farmers from Conggang and Nankang villages in Baoshan city in Yunnan province have been connected to an online distribution system operated by Pinduoduo. Last month their yield of more than 42 tons were purchased six merchants on the e-commerce platform, the company said.
Baoshan city is one the major coffee-producing areas in the Yunnan province owing to a farmer named Hu San, who received training from a British missionary in the 1930s. Nearly 99% of coffee made in China in the past five years is produced in the southern Chinese province, reported Xinhua citing an industry researcher. However, coffee grown in Yunnan has a poor reputation for quality and is most often sold below the futures market price and distributed in instant coffee form by foreign enterprises.
“There are a total of 88 counties considered high-poverty in Yunnan province, and Beijing has asked the Shanghai municipal government to help lift 74 of them out of poverty,” (our translation) Zhou Xingjun, deputy secretary-general of the Baoshan municipal government said in an announcement. The officials expected Pinduoduo to lead the digital transformation of the local agricultural industry, “retaining profits and talents to the area.”
The Shanghai-based e-commerce giant recorded sales revenue of RMB 65 billion in 2018 from its anti-poverty program, which comprises 140,000 produce suppliers from impoverished areas, including the southwestern region of Tibet, and Xinjiang and Gansu in northwestern China.
Another Chinese tech company partnering with local governments in alleviating rural poverty, Alibaba previously announced that sales of produce from high-poverty areas exceeded RMB 63 billion on its e-commerce platforms.
The central government in 2015 allocated a special fund totaling RMB 2 billion to support e-commerce development in the central and western regions of the country. The policy was tightened in May 2018 to avoid misuse, then was reduced to RMB 1.54 billion that year after national treasury department restrictions stipulated that no more than 50% of the total financial assistance offered in bringing local produce to the market could come from this government subsidy.