Alibaba Group Aims to Boost Commerce in China’s Rural Provinces

Alibaba Group will spend the next 5-10 years focused on growing e-commerce amongst small and medium businesses in China’s western provinces, in a bid to spur their economic development, said Jack Ma, the company’s founder and executive chairman.

Alibaba Group signed agreements with the local governments of Xinjiang and Gansu to promote the use of e-commerce in those regions and to cooperate on the digitization of government and public sector services. Alibaba Group will also set up dedicated e-commerce verticals on its China wholesale platform, 1688.com and its C2C platform, Taobao Marketplace, in order to promote agricultural specialties from the two province.

The tie-up also covers the development of cloud computing, big data and offline-to-online services in Xinjiang and Gansu, said Alibaba Group in a press release on Monday.

Xinjiang and Gansu, located in China’s far west, are economically less-developed than China’s eastern and southern regions. According to Deutsch Bank Research, Xinjiang’s per capita GDP in 2013 was less than half that of Shanghai’s, while Gansu’s GDP per capita was only a quarter of Shanghai’s.

“We hope to use the Internet to spread knowledge to people in the countryside, and to make available the special products from these regions to consumers all over China,” Ma was quoted as saying in a press release. Ma said he hopes these initiatives will create jobs that will drive long-term economic development in these provinces.

In Xinjiang, Alibaba Group will use big data to improve the agricultural sector and promote Xinjiang produce, such as fruits and nuts, through its platforms. The company will use Xinjiang as a base to promote e-commerce throughout Central Asia, Alibaba said.

Aside from these online initiatives, Alibaba Group and local authorities will build an Intime offline-to-online “experience centers” in Xinjiang and Gansu, where shoppers can enjoy shopping, dining and entertainment activities. Intime is a department store chain in which Alibaba Group owns a stake.

In October, Alibaba Group announced it will invest $1.6 billion over the next three to five years to build thousands of e-commerce facilities in rural China. Internet usage is rapidly growing in China’s countryside. At the end of 2013, the number of rural Internet users in the country constituted nearly 30 percent of China’s total Internet user base at 177 million, according to government statistics.