In line with the new leadership’s policy of driving domestic consumption as an engine of growth, more resources are being funneled into remote and rural communities to improve the infrastructure for local retailers and encourage consumers to spend more.
In northern China’s Shanxi province, the local government has joined hands with the provincial branches of Agricultural Bank of China Ltd. (01288.HK, 601288.CN) and China Mobile Ltd. (00941.HK) to push some 5,000 outlets of agricultural products to adapt to the information technology trend, which will help farmers and rural residents in doing business more efficiently.
Shanxi’s move is being repeated in other parts of the countryside with local governments pushing for the connection of high-speed broadband network to rural villages and providing information technology support for agricultural outputs, according to the nation’s “rural informatization blueprint” which forms part of the country’s 12th five-year plan (2011-2015).
In Shanxi, the provincial government invested heavily in building a chain of more than 35,000 convenient stores where rural residents can buy their daily necessities without having to travel to the city.
In order to provide a more secure and convenient environment for retailers to handle their business, the government together with AgriBank and China Mobile will deploy a point of sales system in 5,000 agricultural shops, enabling them to accept bank cards to settle transactions through a connection with the bank card network.
With POS devices installed in rural stores, people can now top up their mobile phone cards and pay their public utility bills without leaving their villages. That should help narrow the gap between the rural and urban areas in the province in terms of electronic payment infrastructure.
Shanxi also plans to upgrade its logistics network to improve the delivery service and enable suppliers to ship more high-quality products into the villages to improve the rural residents’ quality of life.
The commerce ministry has proposed the building of 19 logistics warehouses across the province to help in the shipment of agricultural products from the rural villages to the city centers as well as create new trade hubs in the rural areas of the province.
Meanwhile, Wuxi in eastern China’s Jiangsu province is also undertaking an informatization program to improve the people’s livelihood. It has introduced an automated feeding system for its pig farms which helps a lot in lowering costs. The city has an intelligent fisheries monitoring system that is helping increase yield rates. In addition, more than 80 percent of Wuxi’s leading agricultural firms kicked off e-commerce services and generated 1.5 billion yuan in online sales in 2012.
The improved IT infrastructure has also nurtured the growth of agricultural e-commerce transactions. Currently, over a million farmers have established online stores on e-commerce platforms such as Alibaba.com and generated almost 20 billion yuan revenue in 2012. Average revenue per farmer was 2,000 to 5,000 yuan per month.
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