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Africa: Rural E-Commerce Model Pitched for Africa
2016/06/16

By Peter Kenny

Geneva — The operator of an e-commerce program which reaches deep into rural China believes that its business model could help Africans in areas far from cities.

Sun Lijun is a vice president of the giant Chinese online trading giant, Alibaba, and general manager of Rural Taobao, the company's e-commerce wing which serves areas where the economy lags behind that in the rapidly-developing cities.

Sun recently delivered the main address at the United Nations Conference on Trade and Development (UNCTAD) E-Commerce Week in Geneva, drawing admiring applause during his presentation.

He believes that with help from governments, his model for rural e-commerce can be applied in South Africa and in other countries in Africa.

"We work with local and county governments in China and we believe that with the right backing systems like Alipay could be extended into rural areas in countries like South Africa, stimulating the economies there," said Sun in an interview with allAfrica.com.

Alibaba's Alipay is one of China's biggest payment services and is extending into Europe. Partnerships are key as they promote the platform, getting merchants to lock into its buying and selling arena.

China is a key economic player in Africa and its investment across the continent has skyrocketed in recent years from $7 billion in 2008 to $26 billion in 2013, according to figures cited at a recent Africa Business Forum held by the University of Pennsylvania's Wharton Business School.

South Africa is seen by China as a key engine for economic growth in Sub-Saharan Africa.

"Rural Taobao operates in 28 provinces of China, in more than 300 counties and 15,000 villages, connecting 25 million rural residents and providing them with benefits and convenience through the Internet," said Sun .

It has village "partners" such as the entrepreneur Wang Xian. A rural service center agent, she enthused in Geneva about how she was able to use her education to stay in her home area and help people as well as herself.

"I used churches in the area to offer services to the community and was able to use my education to get communities better informed about how to enrich their lives with e-commerce," she said.

Alibaba is using Rural Taobao to draw 600 million of China's rural residents into the world of online shopping as buyers and sellers, it push coming at a time when exports are ebbing and the economy is not growing as fast as it used to.

Both Alibaba and its founder, Jack Ma, are well-known names outside China, but relatively few people have heard of Rural Taobao, a priority project for the group .

"We are committed to rural e-commerce development to better serve consumers in China's hinterland," Sun said. "We want to add efficiencies to the country's agriculture, and help raise the standard of living in rural China, keeping young people there and not going to the cities."

If African countries were to use Rural Taobao's model of garnering support from governments, there would need to be investment to enhance online payment systems and the infrastructure to extend the Internet.

UN officials said they would like to see if the model of Rural Taobao could be applied in developing nations as well as in China.

In 2015, total e-commerce turnover in China was more than 20 trillion yuan ($3 trillion), up 27 percent from the year before. Online retail transaction volumes reached 3.88 trillion yuan, up 33.3 percent year-on-year, with online consumers in China growing to 413 million.

Consumption through mobile client terminals accounted for about 50 percent of total online retail transactions.

Marie Sicat of UNCTAD's ICT analysis section said e-commerce in developing countries could be fostered for rural development, enabling "rural producers to use e-commerce to market and sell their products, or purchase intermediary products for their businesses." Rural areas constituted a large potential consumer market, she added.

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