E-commerce business expansion planned for rural China

As online sales skyrocket in rural China, e-commerce sites are busy expanding their networks.

JD.com, a US-listed e-commerce company in China, is planning to expand its logistics and marketing network in rural areas where online sales are expected to skyrocket in the coming years, Chinese media reported on April 21.

Liu Qiangdong, chief executive officer of JD, led a team of senior managers to visit Gu'an County in the northern province of Hebei. He told DoNews that the company will introduce in rural China the so-called "3F Strategy"; namely, "Factory to Country", "Finance to Country", and "Farm to Table".

Thanks to more than 100 township-level service centers that cover 10,000 villages, as well as 400 service stores that feature in big purchases' marketing, delivery, installation, repair, and maintenance, JD will be able to make more industrial goods, such as chemical fertilizers and pesticides, along with its self-run financial products available to rural customers. It plans to facilitate crop sales there by directly connecting the fields in the countryside to the dining tables in the cities.

The development of e-commerce business in rural China is meanwhile also supported by Beijing. In a decree issued by the central government, it welcomed the e-commerce, logistics, trading, and financial industries to join efforts to set up online business platforms and establish model sites for the rural areas.

As of December 2013, 177 million rural residents in China have access to the internet, accounting for 28.6 percent of the country's netizen population. The online sales volume in rural China is expected to increase from 180 billion yuan in 2014 to 460 billion yuan in 2016, according to the report.

JD's competitors, such as Alibaba and Suning, a Jiangsu-based home appliance seller, are also beefing up their expansions in the rural markets.