Chinese e-commerce platforms are redoubling efforts to help farmers hit hard by the Covid-19 outbreak to sell their overstock agricultural products online.
Why it matters: Connecting farmers with e-commerce as a method of poverty alleviation has part of the government’s agenda in recent years. During the Covid-19 outbreak and subsequent locality lockdowns, e-commerce has became a crucial sales and distribution channel for farmers.
- Shuttered brick-and-mortar produce markets, logistical interruptions, and labor shortages caused by the Covid-19 outbreak quashed the seasonal sales spike normally seen during the Spring Festival holiday week.
- Farmers are facing huge losses resulting from China’s paralyzed economy as wholesalers aren’t purchasing as normal during the outbreak. The Covid-19 effect on China’s agricultural sector may be felt over the longer term due to the time needed for crop growing cycles.
Details: Major e-commerce sites like Alibaba, JD, and Pinduoduo have launched special campaigns and subsidy funds to facilitate online sales of fresh produce.
- Pinduoduo unveiled on Feb. 10 a special campaign for direct-from-farm produce, listing fruits and vegetables from nearly 400 agricultural areas countrywide. Of the total, 230 are officially recognized poverty-stricken counties.
- The Shanghai-based firm also allocated RMB 500 million ($71 million) in subsidies in the form of coupons or discounts for buyers to apply to purchases of applicable produce.
- The company said that in addition to the subsidy fund, it also allocates RMB 2 per order to farmers to assist with logistical costs.
- The company has not responded to requests for specifics about the subsidies. Pinduoduo does not hold inventory and users purchase the produce directly from farmers listed on the platform.
- Alibaba’s Taobao is setting up a RMB 1 billion fund for the initiative. The company is maximizing advertising reach for the produce by linking customers with a dedicated landing page on Taobao’s home page.
- JD launched on Feb. 11 a dedicated sales channel for farmers affected by the crisis to sell their produce.
Context: E-commerce has become an important sales channel for farmers, especially those in remote areas.
- Thanks to the rise of content-driven e-commerce, tech companies from e-commerce giant Alibaba to short video apps like Douyin and Kuaishou are leveraging livestreams and videos to boost online sales.
- Pinduoduo earned sales revenue of more than RMB 65 billion in 2018 from a special program that sells farm produce from poverty-stricken regions.