Dive Brief:
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E-commerce giant Alibaba says that data from the China Internet Network Information Center show that the use of the Internet in rural China is growing, thanks to an increase of mobile shopping there.
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Plus, there are far fewer physical stores in many parts of rural China, leaving an opportunity for online retailers.
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But people there are also much less affluent, and fewer than one in three rural Chinese use the Internet, according to the center.
Dive Insight:
It’s no surprise that smartphone use in rural China is growing — or, at least, it should be no surprise to Alibaba, considering that the company has been working hard to get low-cost smartphones into the hands of people living in rural areas. Many rural areas in China have poor public transportation choices, tough roads, and few stores, so online retail should be a natural opportunity.
The key will be what kind of online retail and how much. People in rural China haven’t enjoyed the middle class boom that the cities have seen; they’re significantly poorer in general. And Internet use, in addition to mobile use, also has to grow for e-commerce to take off. But as China’s e-commerce matures, there could be opportunities for continued growth farther afield.
If Alibaba finds success there, that could also bode well for U.S. retailers, which are finding Alibaba's Tmall Global to be a very helpful marketplace -- according to Alibaba CEO Daniel Zhang, Costco made $6.5 million dollars in sales through Tmall Global its first month on the marketplace.
