---
category: literaturenote
citekey: heanalysisagriculturalcommercerural2021
title: Analysis of the Agricultural E-Commerce in Rural China
authors: "He, Ziying"
year: 2021
date: "2021-00-13 juuni 13, 2021"
doi: 10.1145/3450148.3450199
url: "https://dl.acm.org/doi/10.1145/3450148.3450199"
zotero_key: Q5FWSBSL
zotero_storage: FN9838BE
collections: imporditud
folder: 001_artiklid
firstAuthor: "He, Ziying"
status: converted
---
# Analysis of the Agricultural E-Commerce in Rural China

## Ziying He<sup>∗</sup>

Fairmont Preparatory Academy, Anaheim, California, America, 92801 ziyinghe.0218@gmail.com

#### ABSTRACT

Under the trend of "Internet +" and the development of e-commerce, the combination seems to be a useful and new business model to develop agriculture in rural areas. It is an excellent opportunity to reduce poverty in rural China. Agriculture is the primary economic model in rural areas, and most people make a living by doing farm work. Therefore, the development of e-commerce agriculture in rural areas can solve poverty to a great extent and bring vitality to rural areas. This paper investigates the benefit of e-commerce in agriculture, reducing wastage, improving farmers' income, and increasing productivity. The main problems facing agricultural ecommerce in a rural area are low traffic and incomplete logistic system, shortage of talented people, asymmetric information for buyer and seller, and unavailable supplies in a rural area. This paper will propose some feasible solutions for these problems, such as building a double e-market, strengthening education, improving infrastructure, and establishing a traceable system.

#### CCS CONCEPTS

• Social and professional topics; • Professional topics; • Computing and business; • Economic impact;

#### KEYWORDS

E-commerce, Agricultural Product, Rural Area, Benefit

#### ACM Reference Format:

Ziying He. 2021. Analysis of the Agricultural E-Commerce in Rural China. In 2021 12th International Conference on E-Education, E-Business, E-Management, and E-Learning (IC4E 2021), January 10–13, 2021, Tokyo, Japan. ACM, New York, NY, USA, [4](#page-3-0) pages.<https://doi.org/10.1145/3450148.3450199>

#### 1 INTRODUCTION

China is a big agricultural country. Since 1978, China has achieved remarkable agricultural growth and industrial efficiency. Reflected by Kuznets (1964), Mellor & lele(1973), Hazell & Ronell(1983), and many others, agriculture not only provides materials, capital and labor too, but also a massive market for the non-agricultural sectors. [\[4\]](#page-3-1) Agriculture has been driving the whole national economy. At the same time, agriculture is also the leading economic model in rural areas, and the development of agriculture can drive rural

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economic development. Moreover, Under the trend of "Internet +," the number of netizens in rural areas increases year by year, with the promotion of a total number of 170 million to 255 million netizens in a rural area (figure [1\)](#page-1-0) [\[10\]](#page-3-2).

Inspired by the widespread popularity of e-commerce globally, the combination of agriculture and e-commerce, referred to as Agricultural-e-commerce, can be a new economic model developing in the rural area. E-commerce of agricultural products is a business model that combines all kinds of rural resources and expands rural information service through a network platform. It refers to the use of the Internet, computers, multimedia, and other modern information technology in the agricultural production and processing, distribution, and sales of the comprehensive introduction of the e-commerce system, online products or services to complete the purchase and sale of electronic payment and other business processes.[\[9\]](#page-3-3)

## 2 BENEFIT OF E-COMMERCE IN AGRICULTURE

#### 2.1 Reduction of wastage

Firstly, the Producer can communicate with consumers directly and quickly obtain the market information to trade independently. Their information acquisition capabilities, product self-sale ability, and risk resistance ability are greatly enhanced. Farmers can acknowledge market demand accurately through e-commerce and produce marketable and appropriate produce. It can avoid unequal supply and demand, which will leave a large amount of crop overstock.

Secondly, e-commerce allows farmers to sell directly to buyers, shorten their time to reach customers, and reduce product spoilage and nutrition loss. Thirdly, Agricultural e-commerce can expand the customer base. Customers do not need to drive a long time to come to these rural areas to buy products; They can buy them online, which is more convenient. Moreover, farmers can use an e-commerce platform to publish local agricultural resource information on the Internet.[\[9\]](#page-3-3) It is an effective way for them to sell overproduce products.

#### 2.2 Improvement of farmer's income

The online platform provides farmers with greater transparency and visibility of market prices to compare to those offered by middlemen. It can eliminate the intermediaries in the process. It can offer a farmer one more way to sell their produce and earn more money. An Agricultural e-commerce report in Mozambique stated that the smaller holder farmers that supply its vegetable boxes earn more than \$100 per month than an average monthly income of \$18-20 for smaller holder farmers. [\[8\]](#page-3-4) On the other hand, on the online platform, farmers can increase their productivity by providing high-quality crops and characteristic folk products. Currently, urban residents acquire a healthy life and focus on food quality

<sup>∗</sup>Author's Email: ziyinghe.0218@gmail.com

<span id="page-1-0"></span>![](_page_1_Figure_3.jpeg)

Figure 1: The Change Trend chart of China's Rural Internet Users from 2014 to 2020

and safety. In this way, farmers sell their superior products to the whole country through e-commerce platforms, effectively increasing farmers' economic income and changing the previous situation where the primary source of income is merely planting a small amount of food or migrant to the city for jobs.

## 2.3 Increase of productivity

Buyer can trace the origin of specific supplies, which can promote farmers to enhance the quality of produce.[\[8\]](#page-3-4) In addition, to increase their competitiveness, farmers will invest in purchasing agricultural materials to improve planting efficiency and achieve a virtuous cycle in agricultural production. [\[9\]](#page-3-3) More and more people realize that small-scale production cannot produce enough supplies to adapt the fierce market competition. Therefore, they should unit to obtain a better scale of production, resulting in agricultural production cooperatives and agricultural industrialization enterprises are booming.

## 3 THE MAIN PROBLEMS FACING E-COMMERCE AGRICULTURE OF AGRICULTURAL PRODUCTS

## 3.1 Incomplete development of E-commerce in rural area

The production cycle of agricultural products is long period, directly related to the natural conditions, and cultivation depends on the natural environment, which are uncontrollable. They cannot be stored for a long time. As time goes by, its value decreases. Due to the characteristic of agriculture-related product, it is so crucial to establish a reliable logistic system. However, the basic infrastructure in rural area is so poor that is difficult to build a logistic system to satisfy it. Even some villages in rural area have roads links to outside world, these roads, which are too narrow, are best described as being of poor-quality. Many of them are full of cracks after just a few years.[\[6\]](#page-3-5) Improve rural infrastructure and build up a logistic system can reduce the transportation cost. But it required a large quantity of investment, many companies are unlikely to pay for it. The weak logistic system, complex intermediation links and immune geographical coverage, have a negative impact on the logistic system. In the figure [2,](#page-2-0) it shows that the logistics costs take a much larger proportion of GDP in China than in USA.

## 3.2 Shortage of talented people

People living in the rural area tend to be low commercial awareness and poor-educated. Many of them have only a primary school education level, who lacks a strong learning ability and rich knowledge. Besides, the rural internet coverage is no high. By March 2020, the Internet penetration rate in China's rural areas is 46.2%, while the internet penetration rate in urban areas is 76.5%. [\[6\]](#page-3-5) As a result, many people don't have access to Internet. Moreover, there are fewer and fewer people living in the rural area since many people migrate to the city for many reasons. For jobs, agricultural technology developing rapid eliminates the need for agriculture workers. [\[2\]](#page-3-6)For better education, the education condition is so poor in rural area, so many young people move to city for undergraduate city. For decent living condition, the infrastructure in the city is welldeveloped and life can be more comfortable. And most of them will not come back to the rural. As a result, people live in the village are mostly elder and kids. The following is the rural population structure of Hunan.(Table [1\)](#page-2-1) The permanent population of rural

<span id="page-2-0"></span>

Figure 2: Logistics Costs as a percentage of Gross Domestic Product in the People's Republic of China and the United States, 2000-2013[3]

<span id="page-2-1"></span>

| Age    | Rural Population(ten<br>thousand) | Proportion of the<br>rural population(%) | population of permanent<br>residents(ten thousand) | proportion of rural population in<br>this age group(%) |
|--------|-----------------------------------|------------------------------------------|----------------------------------------------------|--------------------------------------------------------|
| 0-9    | 577.46                            | 11.1                                     | 531.13                                             | 92.0                                                   |
| 10-19  | 597.7                             | 11.5                                     | 542.56                                             | 90.8                                                   |
| 20-29  | 765.46                            | 14.7                                     | 391.15                                             | 51.1                                                   |
| 30-39  | 742.02                            | 14.2                                     | 436.25                                             | 58.8                                                   |
| 40-49  | 895.94                            | 17.2                                     | 684.04                                             | 76.3                                                   |
| 50-59  | 735.35                            | 14.1                                     | 645.65                                             | 87.8                                                   |
| 60+    | 905.01                            | 17.3                                     | 867.09                                             | 95.8                                                   |
| Total: | 5218.92                           | 100.0                                    | 4097.87                                            | 78.5                                                   |

Table 1: Hunan rural population structure

Hunan is 40,978,700, accounting for 78.5% of the rural population. On the whole, the permanent resident population shows a trend of "less in the middle and more in both ends".

Juvenility and aging coexist, most of the infant children, teenagers and middle-aged and old people will live in the village for a long time, but the young and middle-aged people prefer to go out all the year round. The proportion of permanent residents in the rural population of the same age group is the lowest in the 20-29 age group, accounting for only 51.1%. As a result of their large number of young people studying or working outside the country, they live outside the country for a long time.

The insufficient amount of people who skills use of network technology and information processing technology etc., which affect strongly the development of agricultural e-commerce field.

## 3.3 The asymmetric information for buyer and seller

Consumer and producer don't have direct access to contact, resulting in the gap between the market supply and demand. As a result, producers make plan based on the sales information of the last quarter, which cannot meet consumers' need for the following

quarter. Take NanFeng County as an example in JiangXi province as an example. In 2014, its annual production is 2.3 billion, but 70% of it is overstocked, which can't sell. It takes a long time for agricultural products to go from being produced to being sold. [\[1\]](#page-3-7)According to Stringer et al. 2007, the food supply change can be divided in the following stages: agricultural production, processing of raw material, industrial transformation, distribution, and consumers.[\[5\]](#page-3-8) It is a high-interacting process, exchanging a large amount of information. Obviously, farmers only take roles in the first stage, which doesn't participate in the subsequent interaction. Another problem for farmers is that the lack of knowledge of market price. In some extent, it hurts their benefit because they have to accept the middlemen price.

#### 4 SOLUTION

## 4.1 Build of double E-markets

Double E-market is a two-way market, including agricultural electronic market and agricultural product electronic market.[\[1\]](#page-3-7) It facilitated farmer buy agricultural product or sell their crops by using phone or Internet. Electronic market of agricultural product is that

<span id="page-3-0"></span>farmer can sell their crop on it. Agricultural product of electronic market is selling production necessary for farmer such as pesticides, seeds, and fertilizers. Famers are enabled to sell their production or buy their agricultural product with the usage of telephone or Internet. Most importantly, as an agricultural product supplier, it protect farmers' benefit, reducing the channel intermediate link, and lowering the purchase cost. And they can buy staffs online directly, increase their ability to bargain and especially solve the difficulty to buy subsistence faced by the elderly and children left behind in the rural area.

#### 4.2 Strength of education and train the farmers

Led by the government, they can design "government + university + farmer" to train farmer, which can increase their scientist and cultural qualities.[\[1\]](#page-3-7) Farmers should be guided to obtain sales information from the Internet, which will broaden sales channels, and increase their income levels. Only when farmers benefit from the e-commerce platform can they correctly recognize the role of e-commerce and increase their enthusiasm for learning. When the farmer has certain knowledge of e-commerce, they are able to identify fraud and avoid being cheated. In terms of absorbing professional and technical talents, the government can formulate some policy to encourage excellent talents to build rural areas. Also, the government can cooperate with some online website, such as Taobao and Tianmao, to set up some agricultural outlets to provide jobs for people who meet the conditions, attracting rural undergraduate students and migrant worker to return to hometown.

## 4.3 Improvement of the traffic in rural and logistic system

"Better road lead to better life".[\[6\]](#page-3-5) Improving transport can provide access for people to variety of goods, services, and information of outside world. Improving transport can result in building a reliable logistic system, reducing spoilage of products, and lowering the costs. [\[4\]](#page-3-1) The government should increase quality and quantity of infrastructure investment in rural area, construct more roads and highways to connect city and the village, and increase the mobility of rural and interaction between city and village. Integrating dual positive rural logistics can improve the efficient of transportation. In the early morning, vehicles loaded with produce from rural to city. Then, vehicles loaded with agricultural product from cities to rural. In this way, the empty rate of the vehicles and transportation cost can be reduced. The direction from rural to city provides city residents with fresh food. The flow from city to rural can bring agricultural product to the farmer, such as particles and fertilizer. The dilemma of shortage of supplies in rural area and establish rapport relationship with city can be solved.[\[1\]](#page-3-7)

#### 4.4 Improvement of traceable system

The traceability system of the food source of agricultural products not only can boost consumers' confidence, but also can maintain the quality of products. Family farm, specialize households, farmer's cooperatives, and industrialized leading enterprises should work together to establish a tracing system on the agricultural e-commerce platform.[\[7\]](#page-3-9) Customers can trace the origin of the product and know the local situation. When unfresh food is found, customers

can also report it online, which can encourage farmer to produce high-quality and healthy product. To maintain competitive and avoid bad reviews, famers will try their best to produce good products and increase yields.

## 5 CONCLUSION

The rapid development of rural e-commerce in China is crucial. It is an important way for China's rural areas to get rid of poverty. According to Roland's famous model, a world famous model of IR development stage on the model, the application of e-commerce is developed in five stages and "prairie fire" in a mature stage. The development of e-commerce in rural China is at the initial stage now. The development of it is urgent and inevitable.

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