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Betting on the Farm

As livestream-savvy farmers selling produce straight from their fields help grow China’s rural economy, lack of logistics and skilled professionals threaten to uproot their success

By Xu Ming Updated Dec.1

August and September are the busiest months for Chai Xiaolei and his wife Liang Xianglian, kiwi growers in Zhouzhi County, Shaanxi Province. Hours after she livestreamed the start of their late August harvest from their orchard, Liang got in front of the camera again, this time at home, to show off the year’s first harvest to her around 80,000 followers on Douyin, China’s TikTok.  

“There was a drought this year, so the fruits are smaller than usual, but they’re sweeter,” she said, responding to a viewer’s request for bigger kiwis. Behind her sat stacks of the fruit that would eventually ship to customers across the country, many of whom placed pre-orders. By early October, the couple had done 80 livestreams.  

Chai is among the millions of Chinese farmers promoting their produce online. Improvements in China’s infrastructure, logistics and transport are making rural areas fertile soil for e-commerce. Unlike rural ecommerce in the early 2000s, which mainly sold manufactured products in rural areas or dealt in non-agricultural products, such as wholesalers near industrial clusters selling on e-commerce platform Taobao, this wave focuses on fresh produce from rural areas. Farmers and rural vendors are joining online platforms to cash in on the “farm to table” movement taking off in Chinese cities.  

Searches for “agricultural products” on popular Chinese apps yield endless streams of videos from vendors promoting a cornucopia of nuts and veggies, farmers fondling fruit in fields, or cooking clips with freshly picked vegetables. Farmers that jumped on the bandwagon not only saw incomes increase, but also helped local economies.  

There are more than 30,000 e-commerce platforms involving agricultural products, the Ministry of Agriculture revealed in June. On Douyin, 1.79 million kinds of agricultural products were sold to consumers across the country in 2021. In the first 10 months of 2021, the number of orders for agricultural products on short-video app Kwai exceeded 420 million, while sales increased by 88 percent year on year.  

Experts expect the shift to online sales to change village economies. In China, over 500 million people, nearly 40 percent of the total population, live in rural areas. Rural ecommerce has been an important channel to increase farmers’ incomes and activate sustainable economic development in rural areas ever since China announced in 2020 it had eradicated absolute poverty, which it defined as annual per capita incomes below 4,000 yuan (US$560).  

“Rural e-commerce is not only a reform that redistributes the means of agricultural production but also an important opportunity to modernize against the backdrop of rural revitalization,” read a 2021 rural ecommerce report from the Liaowang Institute, a think tank under the Xinhua News Agency. 

Online Opportunity 
“It’s been a tough year for kiwi fruit. It’s been sweltering the whole summer,” Chai Xiaolei captioned his video posts on WeChat which showed him watering his plants under the scorching sun. Pictures he posted showed some fruit had shriveled from the high temperatures.  

Chai planted 12 mu (0.8 hectares) of kiwi fruit, which yields an average 30,000 kilograms per year. It was not enough to meet demand, as their livestreams on Douyin showing their daily life on the farm continue to generate loyal followers. They have resorted to purchasing kiwis from other local growers.  

Many placed orders days before the fruit was even ripe. As their livestreams continued, more orders came in, with some viewers praising the couple as hardworking, reputable sellers. Liang told followers she will sell the smaller kiwis for less. During the busy season, Chai and Liang bring on fellow villagers to help them sort and package fruits. 

Sales usually last 11 weeks, Chai said. On their first day, August 25, they shipped about 500 boxes weighing 2.5 kilograms. “In the first few years, sales were not good because we didn’t have many customers. We even lost money. After eight years of growing our customer base, it’s relatively stable now,” Chai said.  

Unlike the traditional wholesale-retail model, farmers on e-commerce platforms are both producer and vendor, enabling them to earn more, as costs are drastically reduced.  

“Selling online means we can profit more and have more say and flexibility in pricing,” Chai told NewsChina. He explained that before 2015, when e-commerce was not popular, they had to sell to wholesalers at much lower prices.  

Chai said he is considered a small grower in Zhouzhi County, Shaanxi Province, a region known for producing kiwis. He did not consider doing it as a serious profession until 2015, when he saw someone was selling kiwi fruit through a shopping app. “I can do this too,” he thought. At 23, he quit his factory job in South China’s Guangdong Province and returned home to take over the family kiwi farm.  

“Entering the harvest season, everyone in the village is busy shipping packages. All the growers are selling online today,” Chai said.  

There are now over 10,000 people in Zhouzhi County like Chai selling their kiwi crops online. But for many years, the county relied on offline channels and often had logistics issues in selling harvested fruits in time, which constrained the planting industry.  

In 2016, Zhouzhi was named a model county in the State-sponsored plan to develop e-commerce in rural areas, giving it access to financial and policy support. As a result, the significant improvements in rural roads, logistics and cold storage warehousing have boosted online sales.  

The county’s kiwi fruit business thrives on e-commerce. In 2021, Zhouzhi County grew 432,000 mu (28.8 hectares) of kiwi, producing 550,000 tons of fresh fruits worth 6 billion yuan (US$841,200). There are 850,000 growers and over 300,000 people involved in the kiwi fruit industrial chain, from planting and packaging to sales. The county’s per capita income from kiwi fruit alone was 5,000 yuan (US$701) a year.  

In 2019, Zhouzhi was removed from the State list of impoverished counties (where annual per capita income is below 4,000 yuan), where it had been for seven years. 

Liang Xianglian picks kiwi fruits in her orchard, Zhouzhi County, Shaanxi Province, October 17, 2021

A young man sells prickly ash, or Sichuan peppercorns, for local villagers via livestream, Ruicheng, Shanxi Province, August 23, 2022

Thriving Live 
The changes in Chai’s hometown reflect those in many villages across China that are taking advantage of e-commerce.  

In the e-commerce center of the remote township of Minning, Ningxia Hui Autonomous Region, about 70 women from nearby villages host livestreams selling local agricultural products such as goji berries and mushrooms to consumers across the country. Built in 2019, the center provides opportunities for the women, who come from impoverished families and had little to no formal education, and increases the income of farmers.
Through group-buy platform Pinduoduo, in Golmud, a county-level city on the Qinghai-Tibet Plateau in Qinghai Province, Feng Changjun and his team ship about 2,000 packages of quinoa every day, helping local farmers reach larger markets.  

Xiangxiang Village in Zhijiang, Hubei Province previously relied on wholesalers to sell its oranges. Farmers turned to online sales in 2016. The village has since built an e-commerce company that hires influencers to promote oranges and other fruits, such as peaches and honey pomelos. The attention from e-commerce has transformed the village, which now hosts agritours in its picturesque, hilly terrain.  

Others are working to replicate the success. Hongwafang Village in Qujing, Yunnan Province, became a popular weekend destination after Zhao Chaopeng, a young man from the village, became known online for selling produce for local farmers. Zhao turned to online platforms when offline sales were affected by the Covid-19 outbreak in early 2020. He once sold 20 tons of apples in two days and over 400 tons of potatoes in 15 days. After Zhao became famous, tourists began visiting on weekends. This spring the village planted nearly 1,000 mu (66.7 hectares) of rapeseed, whose yellow flowers in spring attract photo-hungry tourists.  

By the end of 2021, 16.33 million online vendors were based in rural areas, the Ministry of Commerce revealed in March. Between 2016 and 2021, the volume of agricultural products sold online increased from 158.9 billion yuan (US$22.3b) to 422.1 billion yuan (US$59.2b), the Ministry of Commerce said in January. 

Platform Jumping 
Between September 2021 and September 2022, 2.83 billion orders for agricultural products were made on Douyin and the number of farmers selling on the platform increased by 252 percent.  

Leading e-commerce platforms like Pinduoduo, Taobao and JD.com are focusing more resources on sourcing produce directly from rural areas, a trend driven by both demand and a government call for enterprises to help farmers. They encourage farmers to sell products online and sign up suppliers in rural areas, and have been developing livestream sections for rural produce on their platforms.  

In March 2019, Taobao launched a “Rural Livestreamer” plan, announcing it would train over 1,000 farmers in 100 counties and promote agricultural produce from impoverished regions. By September 2021, over 110,000 farmers across 2,000 counties had livestreamed 2.3 million times on Taobao, selling 5 billion yuan (US$701m) in products.  

Group buy platform Pinduoduo helped pioneer farm produce sales by combining scattered orders. It now holds a promotion for agricultural products every August to help farmers sell during the harvest season. Over the monthlong event, the platform forgoes any sales commissions and provides real-time traffic to sellers while offering subsidies to consumers. This year’s promo, which started on August 21, covered 200,000 agricultural products and involved over 100,000 vendors.  

Since 2020, the platform has aided farmers in improving their farms, offered sales training and increased subsidies for quality products. By the end of 2021, over 16 million farmers sold agricultural products on Pinduoduo. The number of agricultural products receiving over 100,000 orders surpassed 6,000, with 50 boasting an order volume of 1 million. This helped other crops from remote areas, such as apples from Yanyuan County, Sichuan Province, make the app’s bestseller list.  

Small growers who choose not to open shops online can sell their products to other growers or vendors like Zhao Chaopeng. Liu Hui, a vegetable farmer from Yancheng, Jiangsu Province who sells on Pinduoduo, told NewsChina that he often sources vegetables from other farmers when he cannot meet demand. 

Workers prepare crates of oranges for shipment at an e-commerce center in Chengdu, Sichuan Province, a remote county that is one of the largest trans-regional fruit e-commerce hubs in China, November 2, 2020

A young woman sells local food products on Douyin at Zhao Chaopeng’s e-commerce center in Hongwafang Village, Qujing, Yunnan Province, September 27, 2022

Strategic Boost 
At the end of July, Longyan, a city in Fujian Province, finished its third annual livestreaming e-commerce training course for local farmers, inviting successful influencers from short-video platforms to share their skills. Such courses are held nationwide regularly in places seeking to develop e-commerce, and governments at all levels are increasingly promoting e-commerce in rural areas.  

E-commerce giants are eyeing the enormous market potential of rural areas as urban markets become saturated. This is in contrast to the early years of rural e-commerce, which mainly focused on buying manufactured products from urban areas.  

Major e-commerce platforms like Taobao, JD and Suning entered the rural market in 2013, opening shops and service stations that targeted farmers. This changed rural spending habits and made online shopping popular. However, rural infrastructure was lacking and payment methods were limited. In addition, perishable goods require more logistics and cold storage for online sales, which was particularly challenging.  

Things changed after rural roads and internet access improved. Today, China’s shipping network covers 98 percent of townships and 50 percent of administrative villages, which make up the lowest level of government administration and include one or several villages. By the end of November 2021, all administrative villages had broadband. The next month, 284 million rural residents were online, making up 57.6 percent of China’s rural population and 27.6 percent of internet users nationwide. 
In 2015, the country emphasized rural e-commerce as a solution for poverty alleviation and rural revitalization. The State Council, China’s cabinet, released guidelines for developing rural e-commerce that highlighted cultivating e-commerce entities, application of e-commerce in agriculture and rural areas and improving the business environment. In 2014, China launched its “building model counties” campaign to promote e-commerce in rural areas. Since 2017, the campaign has emphasized agricultural products, rural industrial products and other services in rural areas, and set specific sales and training goals for selected counties.  

Under the campaign, local governments establish sales platforms, offer e-commerce training courses, improve logistics and infrastructure and increase financial support to promote rural e-commerce. E-commerce centers that cooperate with livestreaming platforms and provide training and brand building guidance are common projects for county and township governments.  

The Ministry of Commerce and other departments have supported e-commerce in 1,489 counties, many of which were Statedesignated as impoverished. Statistics from the Ministry of Commerce show that in 2020, impoverished counties sold 40.7 billion yuan (US$5.7b) in agricultural products, a year-on-year increase of 43.5 percent. By the end of 2020, the number of individual online businesses in impoverished counties reached 3.01 million.  

When needed, like during harvest seasons, local governments collaborate with platforms to hold livestreaming sales events. Sometimes, government officials make appearances to promote local products. As ongoing Covid restrictions affect sales in China, some county government officials have become popular for promoting their local agricultural products.  

“E-commerce has become one of the most direct and efficient channels for impoverished farmers to increase income and escape poverty,” Qian Keming, vice minister of the Ministry of Commerce, said at an August 2021 press conference.  

In 2021, 11.2 million people started businesses in rural areas, a year-on-year growth of 10.9 percent. Eighty percent of the businesses combine first, secondary and tertiary industries that involve e-commerce and farming, according to statistics from the Ministry of Agriculture and Rural Affairs.  

“Since 2016, rural e-commerce has played an effective role in selling agricultural products, promoting the digital transformation of agriculture, increasing farmers’ incomes and improving the outlook of villages. It has become an important tool in promoting poverty alleviation, rural revitalization and the spread of digital technology in the countryside,” Ouyang Rihui, vice director of the China Center for Internet Economy Research at the Central University of Finance and Economics, said at a discussion held by Economic Daily in July. 

Not Low-hanging Fruit 
Some factors still constrain rural e-commerce, especially involving agricultural products online, said Li Guoxiang, a research fellow with the Rural Development Institute of Chinese Academy of Social Sciences (CASS).  

Despite the increase of agricultural products available online, the gap in sales volume with industrial products sold to rural areas has widened annually, expanding from 735.6 billion yuan (US$103.1b) in 2016 to 1.6 trillion yuan (US$224.3b) in 2021.  

“Selling agricultural products online goes through complicated links. Because of the lack of a cold chain, losses are big. Economic disadvantages of scale exist in several links from the origin. Production itself is dispersed, so collecting them for online sale is a diseconomy of scale already,” Peng Zhiqiang, CEO of technology company Shengjing Technology, told Yicai, a financial news outlet. He said selling agricultural products online is much more difficult than selling industrial products to rural areas and requires more investment in time and money.  

Liu Hui told NewsChina that he seldom sells leafy vegetables that are vulnerable to high temperatures during summer. He sells towel gourds and chili peppers on Taobao and Pinduoduo. But if he adopts cold-chain transportation, overheads go up, making the venture not worth it. 

Li told NewsChina that some places lack basic logistics. “Many villages can’t ship express deliveries yet. They have to go to nearby towns,” he said. 
Also, product quality is inconsistent, as large-scale farming is not mainstream. Li noted the quality of agricultural products and farming practice varies greatly.  

This causes trouble for Chai, who often buys kiwis from other growers to meet demand. Chai told NewsChina that by the end of September, peak season for selling kiwi fruits, he shipped 1,000 fewer packages than the previous year, partly because he failed to source enough fruits that meet their quality standards.  

“We guarantee the quality of our fruits because I keep learning new planting methods and technologies from books, the internet and expert lectures. So my standards are high when purchasing from other growers,” Chai said. “However, many growers here are elderly and rather casual about farming. They rely mostly on luck and pay little attention to learning or using new technology to improve quality,” he added. “The products aren’t standardized because of lack of planting on a large scale. We hope to develop large-scale farming too, and adopt new planting ideas and technologies to produce fruits that are consistent in quality. But the arable land in our village is limited.”  

Li Guoxiang pointed out that while some villages have made headlines for their success in e-commerce, they remain a small minority. In most villages, particularly those in remote regions, e-commerce is far from a feasible choice.  

“The government has provided a lot in training and other support. But up to now, few cases are really viable and replicable,” Li said. “It might not be realistic for every village across the country to develop ecommerce. There are only a few standout villages, while the majority will still miss out on the opportunity.”  

Li pointed out the biggest hurdle is the lack of young people, most of whom move to cities for work. “Whatever the business, talent is needed first,” Li said.  

He said that many villagers, most of whom are elderly, have difficulty following the government-provided e-commerce courses. “Some villagers are too old to digest the training. Besides, it’s not a one-person operation. It requires partners. Even if a young person is determined to [start an ecommerce business], they still have to find suitable employees in the village. If the scale is not large enough to be profitable, young people couldn’t survive,” Li said.  

A survey on rural revitalization by the Rural Development Institute of CASS in May shows that in 2021, 23.99 percent of the permanent rural population are above 60 years old and 16.56 percent are over 65, surpassing the 14 percent benchmark set by the World Health Organization for an “aged society.”  

The five-year outlook appears bleak, with an estimated shortage of 3.5 million professionals in agricultural e-commerce in areas from operation and promotion to design, customer services and logistics, according to a report from China Agriculture University’s e-commerce research institute in June 2020.  

To better develop e-commerce in rural areas, Li suggested the local government focus on e-commerce in a township or central village that can mobilize surrounding smaller communities and cooperate with e-commerce platforms to foster new businesses and attract young people. “There has to be plans about what to grow too,” Li said.  

Developing agricultural products processing and integrating e-commerce with tourism or other tertiary industry will also make the business more sustainable.  

“All in all, county and township governments need to proactively make overall plans, provide guidance and cooperate with platforms. It’s important to ensure the development is replicable based on local conditions,” Li added.  

Despite these challenges, Chai is hoping to scale up his farm and get certified as organic. “Maybe not too big, like 50 mu (3.3 hectares), but small and artisan. In this orchard, we could adopt standardized management, such as when to spray pesticides and how much to use and detect for pesticide residues, to make sure every fruit we sell is pollution free,” Chai said. He added that while some growers are certified organic, they actually sell fruits sourced from small growers that do not check for pesticide residue.  

“We’re not satisfied with just selling products and making money. We are running the orchard like a growing company. There are long-term considerations. We hope to provide genuinely high-quality fruit to consumers,” Chai said.  

For some areas, e-commerce may provide the initial spark to activate the overall rural economy for more sustainable development. Many have built processing chains and fostered agritourism like vegetable and fruit picking by improving living environments and developing local natural and cultural resources.  

E-commerce also creates new job opportunities in rural areas, such as customer service, storage and processing, and packaging for unskilled and elderly populations. Other businesses are turning to villages too, offering services like training, storage and logistics, videography, financing and legal counsel.  

“More and more young people are coming back for future development. It has become the norm in our village,” Chai told NewsChina.