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Print Edition> Nation
UPDATED: February 16, 2015 NO. 8 FEBRUARY 19, 2015
Riches and Risks in 'Taobao Villages'
China's farmers use hi-tech e-business platforms to cash in
By Ding Ying
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CASHING IN: Chinese Premier Li Keqiang (right) talks to a courier at an express delivery company, in Qingyanliu, Zhejiang Province. The village is a hotspot of e-commerce shops and has more than 20 delivery companies (WANG YE)

On January 21, Chinese Premier Li Keqiang mentioned a small village in east China when delivering his speech at the annual World Economic Forum in Davos, Switzerland. In the village more than 30 million items are sold to different parts of the world daily. "The story of the village speaks vividly of the hardworking Chinese people actively engaged in entrepreneurship," said Premier Li.

This village is one of those that makes fortunes every day by online business mostly through the modern e-business retail platform, Taobao. These villages spread in different places of China with the same nickname: "Taobao villages." With the help of a hi-tech platform for online shopping, Chinese farmers are now able to find a way to get more from the treasures on their land.

Tale of the Taobao village

According to Alibaba, China's leading e-commerce giant and parent company of Taobao, a Taobao village is any place where 10 percent of local population is engaged in online retailing and conducting at least 10 million yuan ($1.6 million) in e-business on Taobao platform every year. In China, there are already 212 Taobao villages.

The Taobao village that Premier Li went to on November 19, 2014, was Qingyanliu Village in Yiwu, east China's Zhejiang Province. There, the premier paid a visit to a business owned by Yang Yaohui and his wife.

Yang and his wife moved to the village and opened an online store after graduating from college in September 2013. In the beginning, he only sold belts. After his son was born in early 2014, Yang started a baby clothes business. Now his store has a four-member team: the couple, Yang's mother-in-law and his 1-year-old boy for a model.

The family has been working very hard to run the store. According to Yang, it is very common for the three adults to stay up until the next morning when business goes well. After Premier Li's visit, Yang and his store became very famous. His monthly sales hit 200,000 yuan ($32,000) recently. "Although it is very tiring, I never think of giving it up. This is my career," he said, adding that Premier Li's visit brought him more confidence about future. Yang plans to start his own brand one year from now and run another online store three years later.

Yang's tale is a common one in the village. The whole village collectively earned a combined 4 billion yuan ($635 million) in 2014. Each year, more than 4 million parcels are sent out from the village to destinations across the country and even abroad. Supporting businesses like couriers, Web-design, photography and packing also thrive in the village. Several years ago, its original population was only 1,500. Now there are over 10 times that population working in online stores and related business alone. Qingyanliu is located near to a huge small-commodity market and cargo terminal, which are crucial to the village's success.

Qinghe County in north China's Hebei Province is famous for its cashmere products. About 74.6 percent of the country's cashmere products are sold online from Qinghe. Donggao Village, a village in Qinghe, which is near a huge cashmere wholesale market, is a Taobao village that sells cashmere products.

Liu Yuguo is one of those who has scored the first pot of gold from online business. In 2007, Liu was still a young man who had failed to earn a living with other business ventures. With less than 1,000 yuan ($333) to his name, he took a chance on the Internet. Three years later, his fellow villagers were astonished to learn that Liu had spent 2.1 million yuan ($333,000) buying a building inside Qinghe's cashmere market. Today, over 90 percent of families in the village sell cashmere products online.

Get rich quick

Convenient Internet and advanced information terminals have brought prosperity not only to China's e-commerce market but also to rural areas. If Taobao villages' development can be guided, the Internet era can greatly narrow the gap between the rural and urban areas.

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