Remodeling the Industrial Chain Trillion Rural E-commerce Market Opens

Rural areas are becoming an important position for e-commerce, especially after a series of support policies fell to the ground, Alibaba, JD.com, SUNING Yunshang staged a fierce "three Kingdoms killing".

People in the industry said that e-commerce is an important breakthrough to enhance the "soft power" of rural areas. through this path, the market of more than one trillion yuan will be opened, the traditional mode of agricultural production and sales will be changed, and the operation of agricultural enterprises will be on a large scale. farmers' income has been raised, and a new rural ecology has gradually taken shape.

The new blue ocean of e-commerce

On September 7, the Ministry of Agriculture and JD.com Group signed an agreement on agricultural e-commerce cooperation. the two sides will carry out comprehensive cooperation in the connection of production and marketing of high-quality agricultural resources, accurate poverty alleviation, channel sinking and information entering villages and households, big data research and cooperation, and rural finance, so as to promote agricultural e-commerce and the development of modern agriculture, realize agricultural transformation and upgrading, and help farmers increase their income and become rich.

Before JD.com joined hands with the Ministry of Agriculture, Alibaba had signed an agreement with the Ministry of Agriculture on rural e-commerce, which will be implemented in ten pilot provinces across the country in the future.

Alibaba, JD.com and SUNING cloud merchants are all concentrating their firepower on the rural market, and the path of their development is roughly as follows: first, establish a two-way logistics network from city to rural and rural to urban, and then develop rural fresh business. establish an efficient cold chain transport mechanism, and finally develop rural finance.

Judging from the current strength, JD.com and Ali are more dominant. As of June 30, 2016, JD.com had nearly 300000 rural promoters, more than 1500 "JD.com help service stores" and more than 420000 administrative villages for the distribution of large household appliances. Alibaba's rural Taobao has covered more than 17700 villages in China by the end of the second quarter.

Zhang Jindong, chairman of SUNING Cloud Merchants, revealed that this year, he will invest 5 billion yuan to build another 1500 SUNING stores and 200 online local characteristic pavilions, create 20 "most beautiful villages" samples, and increase SUNING's logistics coverage in the third or fourth tier market to 87 percent.

The policy aspect is to vigorously support the development of rural e-commerce, and various ministries have issued policies intensively since 2015 to promote the development of rural e-commerce.

The rural e-commerce market has a broad space. Analysts at Ping an Securities pointed out that the per capita annual income of China's rural residents has exceeded 10,000 yuan, and the growth rate is faster than that of urban residents. The Internet penetration rate of rural residents is less than half of that of urban residents, and the utilization rate of e-commerce is significantly lower than that of urban residents. However, rural residents have a high degree of acceptance of online shopping and online payment, and the utilization rate increases rapidly. It is expected that the development space of rural e-commerce is more than one trillion yuan, and the situation of rapid growth will be maintained in the next 2-3 years.

Although rural e-commerce is still in the initial stage of development, it has a rapid growth rate in the past two years. According to statistics from the Ministry of Commerce, online retail sales in rural areas exceeded 310 billion yuan in the first half of this year, and the growth rate of online retail sales in rural areas was faster than that in cities. Authorities estimate that the scale of online shopping in rural areas will reach 460 billion yuan this year.

Reshape the industrial chain

Through e-commerce, many high-quality agricultural products have been sold well all over the country, and the income of farmers has increased significantly. Moreover, relying on e-commerce to achieve large-scale production and sales of agricultural products, resulting in a number of emerging agricultural enterprises. Data show that more and more migrant workers, college and secondary school graduates and veterans, and even business elites and returnees, begin to return home to engage in agricultural entrepreneurship and innovation and become a new type of farmers.

Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, pointed out that the application of rural e-commerce has developed rapidly, significantly promoting the market circulation of agricultural products. Flat sales channels also have an impact on the production and sales of traditional agricultural materials.

In the A-share market, many traditional agricultural enterprises, such as Xindu Chemical Industry, Kim Jong Da, Huilong shares, Nuopxin, Celtic, New Austria shares, and so on, have "touched the net" and launched agricultural e-commerce platforms.

The traditional agricultural material sales model is the hierarchical distribution after production. After the emergence of agricultural e-commerce, the downside of agricultural means of production can provide farmers with money-saving and efficient solutions; when agricultural products go to cities, they can help build brand agricultural products; and in terms of agricultural finance and insurance services, it can provide financial support and guarantee for large growers to expand production.

E-commerce only opens the breakthrough of agricultural informationization. Information technologies such as e-commerce, Internet of things and big data are more and more used in the field of agricultural production, and accelerate the transformation of agricultural production mode to a certain extent, so as to speed up the development of modern agriculture.

Through the real-time monitoring of the Internet of things and the application of big data for analysis and forecast, precision agriculture can be realized, unit cost can be reduced, and unit output can be increased; Internet technology promotes farm information management, realizes factory-oriented flow program operation, and further improves business efficiency, which is conducive to the promotion and replication of advanced models; "Internet + Agriculture" can give rise to huge demand for technical services such as data collection and information platform construction.

According to the 13th five-year Plan for the Development of Agricultural and Rural Informatization, by 2020, the proportion of information technology applications such as the Internet of things in China's agriculture will increase from 10.2% in 2015 to 17%, raising the level of informationization and intelligence in agricultural production. By strengthening the application of remote sensing technology in monitoring soil moisture, seedling growth, natural disasters, diseases and insect pests and the yield of major agricultural products, we can break through the bottleneck of large-scale application of information technology in field planting industry.

There are many opportunities.

In the process of promoting "Internet + agriculture", two types of agricultural information enterprises will be formed. One is a pure data service provider, which mainly sells data products and develops supporting software; the other is to form agricultural material platform enterprises by providing value-added services for agricultural informatization, relying on information services to provide value-added services for agricultural materials sales.

China Information and the Ministry of Agriculture signed the Agreement on jointly promoting big data Cooperation in Agriculture and Rural areas. Through the application platform to collect and conserve data, and through the fusion, analysis and mining of big data, Shenzhou Information grasps the key factors of production in rural areas and supports the large-scale operation of agriculture. for the agricultural industry chain to provide a full range of technology, products, operation and other social services.

In terms of agricultural platform enterprises, Xindu Chemical provides services through e-commerce platform. It is reported that the number of registered members of its e-commerce platform farm has exceeded 199800, the cumulative flow of "mall + financial management" has exceeded 1 billion yuan, and 4177 township experience stores have been developed across the country to set up a rural e-commerce operation system.

Analysts at Changjiang Securities pointed out that agricultural scale in the United States has been carried out for more than half a century, but at this stage, the scale of simple agricultural data service providers is relatively small, while the scale of "agricultural materials + agricultural informatization" enterprises is constantly expanding. In the future, the latter model will have strong vitality in China's agricultural development. It will organically combine agricultural information services based on Internet and big data with agricultural material sales, and realize the realization of the value of agricultural products by providing value-added services of agricultural informatization.

Ping an Securities analysts believe that the rural e-commerce platform may present three e-commerce oligopolies of Alibaba, JD.com and SUNING in the future, but rural e-commerce logistics will bring opportunities to many agricultural enterprises. At present, there are some problems in the development of rural e-commerce, such as high logistics cost, lack of e-commerce knowledge of rural residents and so on. The three major e-commerce companies in the county and township O2O mode to lay out the rural two-way logistics system, the use of economies of scale, will greatly reduce logistics costs. The service site of O2O also has the nature of both e-commerce propaganda station and service. Barfield shares, Huilong shares and other listed companies mostly cooperate with JD.com, Alibaba and other listed companies, and their products are sold on a large scale through e-commerce, while the original offline channels become distribution and service sites, solving the last "one kilometer" of rural e-commerce.

Industry insiders pointed out that the market for "Internet + Agriculture" is huge, and e-commerce is just the beginning. The production and sales of the whole agriculture involve many levels, and it is difficult for a single enterprise to take charge of the whole process. On the basis of large e-commerce platform undertaking the introduction of sales flow, there are many opportunities in precision agriculture, farm information management, agricultural big data and other fields.