JD cultivating rural customers

By Meng Jing (China Daily) Updated: 2014-07-18 07:17

Seven out of the top 10 areas with the fastest growth in online spending in China are less-developed regions such as the Guangxi Zhuang autonomous region, Henan and Hubei provinces.

Further evidence of the trend is recent findings from Alibaba during its first county-level economic and e-commerce forum last week, which said growth in online retail transactions in counties and villages outpaced those in cities by 13.6 percentage points in 2013.

JD.com campaign nets 100% rise in orders

Neil Flynn, head equity analyst at Chinese Investors, a leading analysis firm for US-listed Chinese companies, said it is difficult to see the same trend in the US because consumers there tend to live within driving distance of huge supermarkets, which reduces the need to shop online.

"China doesn't have these kinds of developed brick-and-mortar retailers, and the boom in online retail in smaller cities is mainly because the consumers are being offered new goods that weren't previously available to them," said Flynn, who has been following e-commerce development in China for years.

He said that there is a huge market in third- and fourth-tier cities that have yet to be exploited fully by online retailers.

Cheng Dikun, vice-mayor of Kuytun, a city in the Xinjiang Uygur autonomous region, said that compared with going to brick-and-mortar stores, shopping online offers more choices.

"There are not many shopping options in Xinjiang, especially in a small city like Kuytun. Through online shopping, the gap between Kuytun and big cites in eastern regions has narrowed," he said.

"My daughter often buys fashionable clothes online. Without e-commerce, she would never know what is popular in fashion," he said.

Cheng suggested that online retailers should offer preferential policies to help reduce delivery costs.

"In eastern regions, online shoppers can even get free delivery. But for those of us who live in Xinjiang, we have to pay extra for orders online," he said.

Vanessa Zeng, a senior analyst of e Business & Channel Strategy at Forrester Research Inc, said that unimproved infrastructure and economic conditions in lower-tier cities make logistics, customer service and payment methods more challenging.