China’s broadband plan to expand e-commerce

Bringing internet to the nation will result in significant economic growth

China’s aim is to make sure that the whole country, including rural villages, will have broadband access by 2020. Last year, online sales covered about 7% of total retail output with only an estimated 150 million nationals having participated in e-retail purchases. Given that the population stands at 1.344 Billion, the desire to bring a “purchase now” button into more homes around the country seems rather appropriate for a country as expansive as China. Growth is already happening and even-though e-commerce does not penetrate nearly as much of the population as it does in western countries like the UK or the US, China is still expected to overtake the US as the biggest online market in the world which yet again, marks the unfathomable potential that exists.

The “Broadband China” project has been announced and is, to some extent, reflective of an existing spread of e-commerce in some the most unlikely places called “Taobao Villages” in which Taobao online stores (the name was given by e-commerce dominator, Alibaba) are run by local villagers who sell their goods online. The success of such ventures is illustrated by An Baokang, a Wantou Village millionaire who has been selling crafts online and made more about $326,800 last year. Alibaba’s 2012 research indicates that these villages, together, ran 10 000 online shops and made more than $800 million in sales. “Broadband China” hopes to extend both e-commerce output and consumer stimulation.

In addition to developing broadband infrastructure in China, once in place, the intention is to up-skill Chinese citizens in computer literacy in order to bring as many people into the internet fold as possible. This will not only help increase participation in local, online consumption, but will all also open doors for international penetration into Chinese e-commerce.

Image courtesy of Wiki Commons