A farm produce e-commerce site run by a vegetable farm in Zouping, Shandong province.[Photo provided to China Daily]

Government's push of e-commerce in rural areas will stimulate online fresh food sales

A government-backed drive toward e-commerce can help open up the agricultural sector and generate a rapid increase in incomes for farmers.

At a regular meeting of the State Council in late March, Premier Li Keqiang said it was crucial to modernize the industry, with technology playing a major role.

Half of China's 1.34 billion population live in villages, and at the end of 2010, 125 million were connected to the Internet, a report by the China Internet Network Information Center revealed. Last year, that figure had climbed to 178 million.

"Agricultural e-commerce does not contribute much to the market yet, but it will produce room for huge growth (for farmers' incomes)," Wang Xiaobing, deputy director of the Department of Market and Economic Information at the Ministry of Agriculture, told an e-commerce forum in Guiyang, Guizhou province, last month.

The ministry's data show that online transactions of farm produce were valued at more than 100 billion yuan ($16.1 billion) last year. But that only accounted for 3 per cent of the nation's total.

This means there are vast growth prospects in the countryside, particularly for farmers who could sell their produce online if they were connected to the Web.

Online sales in agricultural products have already proved successful. Last year, the Ministry of Commerce organized two Internet markets on its website, mofcom.gov.cn, with 11.03 billion yuan worth of produce sold.

In May last year, the Ministry of Agriculture also rolled out an online database system in Chengdu, Sichuan province. More than 5,000 farmers were included on the site. This allowed prospective buyers the chance to contact farmers as well as providing an e-commerce platform for farmers to sell their products.

Rural e-commerce is going through a key development phase, according to the 2014-2015 Chinese Agricultural Products E-commerce Development Report, released by the China Food (Agricultural Products) Safety E-commerce Research Institute in April.

The report showed that the country now has more than 4,000 e-commerce sites selling farm products and 31,000 agricultural-related online companies.

The rapid expansion of mobile smartphones and tablets in China is helping to fuel this rise, with the number of connected consumers climbing to about 1 billion last year, up 231.7 percent compared to 2013, the report highlighted.

AT Kearney, the research and marketing consultancy, confirmed that the country's e-commerce market continues to expand, with third-and fourth-tier cities, as well as rural areas, driving growth.

"China remains one of the most attractive online retail markets in the world," Torsten Stocker, a partner with AT Kearney's consumer products and retail practice, said.

As China embraces the Web, the farming industry can reap online benefits with the right financial support. Jiang Yang, vice-chairman of the China Securities Regulatory Commission, made it clear at a forum that financial reform in rural areas would accelerate the development of the agricultural industry. "To develop the financial market in rural areas will help decrease the outflow of capital and improve these regions," Jiang said.