A Better Life Is Just a Click Away: Eliminating Poverty Through E-Commerce

Overview

Chengxian County, Longnan City, Gansu Province developed e-commerce to help people out of poverty, The local poverty rate was 25.47 percent in 2013 and dropped to 6.5 percent in 2017. 350 online stores signed contracts with 3,682 impoverished households and helped them sell agricultural products valued US$5.4 million (RMB37.856 million). Per capita income of the poor population has increased by US$102 (RMB685). Chengxian was removed from the impoverished counties list in March 2019.

Internet brings new opprtunities

Chengxian County Party Secretary Li Xiang spearheaded a poverty alleviation revolution when he began selling local agricultural products on e-commerce platforms a few years ago. Citizens in the area were inspired by his leadership and began to follow suit. The county ultimately gained national recognition for its economic experiments and e-commerce endeavors. It now aims to serve as a useful example of successful poverty relief efforts.

Chengxian was on the list of poverty-stricken counties in Gansu Province until March 2019. It is located along the Jialing River, which is a major tributary of the Yangtze River. Agriculture is a major part of the economy in the area. The land is fertile, and there are many natural resources. The county was poverty-stricken until recently though and did not find a clear development path until 2013.

Chengxian County Party Secretary Li Xiang promotes walnuts at a supermarket.

In June of 2013, Li learned that 30 kg of cherries had been sold a day using Weibo for promotion, a popular Chinese microblogging website, and it sparked his interest. He was soon inspired to try promoting walnuts in a similar way, as they are the most popular product that the county produces.

Li opened a Weibo account, and posted a message on it: “Walnut production is doing well this year. We welcome everyone to Chengxian to try our walnuts. I also sell them on Weibo. People in big cities, such as Beijing and Shanghai, have already started ordering!” Li’s account received some 200,000 visits in just a week, and the number of visits quickly rose to 500,000. The Chinese terms for “Chengxian” and “Chengxian walnuts” began trending on Weibo. Li had tapped into the niche e-commerce market for rural agricultural products. There were already more than 50 million Weibo users in China at that time. The unified platform allowed the country’s netizens to share information in real time, and word-of-mouth marketing was taken to new heights. Anyone could potentially promote something on a broad scale if they had a good campaign or on a smaller scale if they simply had a favorable view of something.

2013 may not seem like a long time ago, but it was a lifetime ago in terms of the internet and social media. Social media professionals were less common at the time and were nonexistant in a small, poverty-stricken place like Chengxian. Many e-commerce sites were still improving themselves into the giants they are today, and traditional media and commerce were still dominant. Many people did not yet realize the impact that e-commerce can have on social and economic development. There was not yet a strong initiative to promote e-commerce, and successful examples and case studies were not available. Li took the initiative to engage in an experiment in the county and explored a path to economic prosperity.

E-Commerce and the Local Government

Chengxian has had to deal with the population crisis that has been affecting China’s rural areas. Many young people are choosing to abandon farming and life in the countryside to look for work in big cities. Elderly people and young children, therefore, make up large percentages of the populations of rural areas. These regions have to think about how they can retain young people without making them choose between their families and their careers. Chengxian was one of the first rural areas in China to engage in e-commerce experiments, which have helped it to eliminate poverty and retain young people.

Li set bigger goals after the walnuts sold well. He created a unified vision that covered both economic and social development. The county authorities began to devote more efforts to the development of e-commerce as walnut sales began to increase drastically. They adopted several policies to encourage youth from the area to take part in local economic development and open online stores. The county established the first e-commerce merchants association in northwest China in July 2013. It provides its residents with the tools and knowledge that they need for their online stores to be successful. The association also creates social media campaigns that highlight local folk culture and promote local products. Chengxian residents developed a multi-pronged campaign on social media under Li’s leadership that included creating various accounts and e-commerce stores, maintaining multiple microblogs that cover related topics, and engaging in discussion forums to introduce local folk culture, history, and agricultural products.

The first Chengxian County Walnut Festival was held in September 2013. A countywide publicity campaign was staged using both traditional and new media and by organizing various lectures and training on e-commerce know-how and skills. The festival proved to be a success, enabling the people from all walks of life in the county to realize that e-commerce is able to achieve a high volume of sales by connecting local agricultural production with the outside larger market and facilitate the integrated development of the county’s first, second and tertiary industries.

A Chengxian E-commerce Training School student takes pictures of products.

Offline Expansion

The county was able to achieve more than just trending keywords and steady demand for its products. Favorable outcomes on social media and e-commerce sites led to other benefits, such as rapid development of water pipelines, internet, electricity, roads, and other infrastructure, as well as new jobs for local residents. Young people from the area who were working in other places now have more incentive to pursue careers in their hometowns, and can stay with their families.

A Six-part Approach

The internet does not rest and is always changing. Chengxian could not afford to sit on its laurels after its initial success. In 2015, the county authorities began a campaign to expand the reach of its grass-roots e-commerce platforms on social media and to address issues related to quality control as well.

A set of operating standards were set up to clarify responsibilities related to expansion. Li spearheaded the creation of an e-commerce center that is in charge of providing business guidance and development planning in the county. All of the county’s 17 towns and townships also established their own e-commerce leadership groups, and special e-commerce offices responsible for educating rural people about e-commerce and promoting growth of the business.

Li developed a six-part approach that involved a clear division of duty to improve and increase the county’s social media presence and sell more 40 products. The efforts aimed at giving play to different roles of the government, the public, the association, the financial sector, and the media. Some of the county’s residents initially thought that there were not enough people available for the undertaking or that they were not qualified enough and would not succeed. The system has played an important role in addressing these kinds of concerns.

The county government was fully on board with e-commerce efforts, encouraging participation and providing relevant guidance and training. Early participants simply consisted of people with some computer skills and the enthusiasm to try some new ideas. The county created online stores, enhanced online engagement, and created buzz on various social media platforms under Li’s leadership. Chengxian was the first county in northwest China to establish an e-commerce association. The association provides training, technical support, and marketing services to local merchants. It also functions as a bridge between the government and local businesses. The association also encourages successful local merchants to merge to gain further market share.

The clear poverty alleviation plan that the county had developed led to it receiving government subsidies to help create special financial institutions for e-commerce merchants. A total of 224 finance service agencies have been established at the village level. They provide support to budding local e-commerce businesses.

The county is also very active on Weibo and WeChat as part of Li’s approach. It invests in key word searches and creates trending articles to promote its products and its image. Traditional media outlets have also taken an interest in its journey out of poverty.

A County to Aspire to

A few boxes of cherries being sold on WeChat inspired efforts that pulled an entire county out of poverty. The story has attracted national attention in China, including from the Ministry of Commerce, the Ministry of Finance, the State Council Leading Group Office of Poverty Alleviation and Development, the Chinese Academy of Social Sciences, and major media outlets, such as People’s Daily and Xinhua News Agency. Chengxian became recognized for spearheading poverty alleviation efforts in the country. The Poverty Alleviation Through E-commerce in Gansu Province conference, Communist Youth League’s Precision Poverty Alleviation - Youth in Action forum, and One Village, One E-commerce Center meeting were held in the county in 2015. A series of honors have been bestowed upon Chengxian as well, as a result of its efforts and creativity. People even travel to the county to get a firsthand look at how its residents have improved their situations and to see how they can use similar methods in their hometowns.

Four Main Factors Contribute to Success

Professor Wei Yan’an is one of China’s leading agricultural experts. He explained that four main factors contributed to successful e-commerce in Chengxian.

The first is Li’s hands-on leadership. His actions motivated the entire county. A Chinese proverb states that if you give someone a fish, you can feed them for a day, but if you teach them to fish, you can feed them for a lifetime. Chengxian’s e-commerce journey began with Li selling walnuts with his personal Weibo account. His efforts grew into a countywide phenomenon that led to the creation of organized committees that are dedicated to educating residents and providing the skills and tools that they need to succeed.

The second is the success of the county’s social media campaigns. Chengxian consistently trends on social media platforms. This is achieved by making scheduled, unified posts across multiple social media channels. There are currently 629 Weibo accounts that are operated by the county government, 3,500 individual government employees’ microblogs, and more than 90 WeChat official accounts also operated by the county government.

The third is the fact that the county maintained a focus on selling walnuts when it entered the e-commerce market. It developed a strong brand identity and stuck with it, even after it became successful on social media. Chengxian has certainly expanded its offerings, but it sticks to agricultural products and did not water down its brand. Local merchants currently sell more than 30 different types of products, including walnuts, honey, dried handmade noodles, honeysuckle tea, chrysanthemum tea, mulberry wine, Chinese yellow wine, and other types of food and beverages.

The fourth is the comprehensive nature of the county’s e-commerce operations. Its poverty alleviation model involves five main components, namely administration, quality control, industrial support, platform services, and publicity and promotion. E-commerce stores are given the tools that they need for success.

Key Results

Chengxian authorities have continued their poverty alleviation efforts and development strategies. E-commerce has proven to be an important part of the county’s economy and helps improve quality of life for its residents.

Li’s experiments with e-commerce caused a ripple effect that has had a major impact on the citizens of the county. The local poverty rate was 25.47 percent in 2013 and dropped to 6.5 percent in 2017. 350 online stores signed contracts with 3,682 impoverished households and helped them sell agricultural products valued US$5.4 million (RMB37.856 million). Per capita income of the poor population has increased by US$102 (RMB685). E-commerce has had very tangible effects on the area. The county has been able to shift from selling its agricultural products locally to shipping them all over the country by harnessing the internet and educating its residents. It has been able to improve people’s lives, create jobs, enhance and develop local infrastructure, and reunite families.