E-commerce Is a Force for China Jobs (But not Job Security): Report

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E-commerce Is a Force for China Jobs (But not Job Security): Report

E-commerce, and particularly online retailing, has generated millions of jobs in China, providing employment opportunities for some of the country’s most vulnerable workers, according to a new report. The bad news: New Economy jobs aren’t covered by traditional safety nets like unemployment and medical insurance.

China’s e-commerce industry has been a catalyst for small-scale entrepreneurial activity in China with more than 90 percent of retail e-commerce shops owned by individuals, according to a new government report.

A survey of the industry conducted by the China Association for Employment Promotion, part of the Ministry of Human Resources and Social Security, found that more than 10 million people are directly employed in China’s e-commerce sector.

That tally includes jobs related to building and maintaining Internet infrastructure, online advertising and other activities, but the largest job segment is online retailing. About 6 million people are employed by e-commerce shops, of which nine out of 10 are privately owned.

The report provided a snapshot of the average e-shop on Taobao Marketplace, the country’s largest online shopping venue. Taobao store owners surveyed for the report said they employed 2.55 workers on average. The report also found that 61.7% of shop owners are male; one out of three shop owners are college graduates; and the average age of shop owners is 28.

E-commerce has proven to be effective at creating jobs for what the China Association for Employment Promotion (CAEP) called “vulnerable groups.” The survey found that 19 percent of shop owners were previously unemployed and 7 percent were farmers. The report shows 40% of the people who have started their own businesses online are unemployed workers and college graduates.

The field also provides opportunities for people with disabilities: nearly one percent of e-shop owners are disabled, the report found. “Internet job creation helps disadvantaged members of the society to restore self-confidence and become self-sufficient,” researchers wrote. “Including farmers and disabled people, more and more disadvantaged members of the society have decided to start their own businesses and look for opportunities online.”

Thanks to China’s ongoing online-shopping boom, the e-commerce employment outlook continues to be bright, with a significant number of shop owners saying they are understaffed. Nearly one out of three shop owners said they planned to recruit at leastthree people in the coming year, which could generate 3 million additional online jobs.

But, while e-commerce has been a boon for job creation, those employed in the field don’t enjoy a much job security. They generally aren’t protected by safety nets like pension plans or unemployment and medical insurance, the report states.

That’s largely because China’s social security system does not cover the Internet sector. Four out of five e-commerce workers are not entitled to government preferential policies for business start-ups, and 70% of online shop employees are not participating in social insurance schemes. Survey respondents cited the expense and complexities of pensionprograms and government social security as the main reasons for not participating.

Last year, Alibaba Small and Micro Financial Services Group, a company affiliated with Alibaba Group, Taobao’s parent company, cooperated with Taikang Life Insurance to provide Taobao sellers and their employees with private-sector life insurance, accident insurance and hospitalization insurance. Currently 60,000 SMEs are participating.

The CAEP study suggested that the government may decide to provide basic social securitybenefits for Taobao shop owners and employees.

China jobsE-CommerceSMEsTaobao

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