Chinese e-commerce platforms have been zooming in on expansion in the country’s rural areas and lower-tier cities amid the slowdown in the country’s major cities like Beijing and Shanghai, but they are facing a major barrier: a shortage of skilled talent, according to a report.
The report by the China Agricultural University (CAU) in Beijing, released on Wednesday, projected that the talent gap in the rural e-commerce sector would rise from 2.1 million in 2021 to 3.5 million in 2025.
“China’s internet-powered agricultural production has just entered a second stage of rapid development, and faces a huge talent gap,” CAU professor Guo Pei said in the report. “The government needs to set up a friendly policy environment for institutions and e-commerce platforms such as Pinduoduo and [Alibaba Group Holding’s] Taobao to foster more talents and push rural e-commerce into a new era.”
The rural e-commerce market is projected to reach about 1.7 trillion yuan (USD 240 billion) this year, according to data from China’s Qianzhan Industry Research Institute. There were 13 million e-commerce merchants based in China’s rural areas as of the first quarter of this year, state broadcaster CCTV has reported.
Alibaba, the parent company of the South China Morning Post and China’s largest e-commerce group, has already developed thousands of “Taobao Villages”—clusters of online sellers in rural China—since 2009. Meanwhile, JD.com, the second-largest in the market, has created rural service centers providing technologies such as drones to expand its logistics capabilities.
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But it was social e-commerce company Pinduoduo, the third-largest e-commerce platform in the country, that the CAU report said was “becoming China’s largest platform for talent development” in rural areas.
Founded in 2015, Pinduoduo has built a business model around helping farmers sell products online. It currently has 580,000 merchants from rural areas, or 11.3% of its total 5.1 million, according to CAU’s report.
The report said Pinduoduo’s Duo Duo University program is an important initiative that has contributed to bridging the talent gap.
Launched in 2018, Duo Duo University offers week-long training sessions to equip merchants with crucial skills in finance, business operations, and online marketing. The program has trained 70% of all active merchants on Pinduoduo, across 12 provinces in China by 2019, Pinduoduo said.
Duo Duo University is also working with local universities to cultivate 10,000 rural merchants in the next five years, with the longer-term goal of putting agricultural producers at the center of the industrial supply chain and supporting the national campaign to alleviate poverty, according to the CAU report.
This article was originally published in the South China Morning Post.