A livestreamer promotes tea products at the e-commerce center for rural revitalization in Ruichang City, Jiangxi Province. Photo: IC PHOTO

---

In March 2024, China’s Ministry of Commerce, together with eight other departments, released a guideline on advancing the high-quality development of rural e-commerce. The document emphasizes the importance of creating mechanisms to showcase successful examples in rural e-commerce, drawing on valuable experiences and practices to replicate proven models and drive further development.

The promotion of role models in rural e-commerce focuses on spreading innovative production and sales methods, business models, and economic formats. This approach serves as a vital avenue for generating spillover effects and positive externalities. However, regional disparities in rural e-commerce loom large, and the effectiveness of such demonstrations often relies heavily on the subjective efforts of businesses, with limited scope and impact on encouraging broader development. Enhancing the demonstration mechanism and addressing the digital divide are crucial steps to ensure equitable access to digital resources, fostering shared digital benefits and advancing high-quality e-commerce development in rural areas.

Multifold functions of demonstration

The high-quality development of rural e-commerce is a core component of China’s push to build a new development paradigm and aligns with the ongoing evolution of the digital economy. Achieving this goal requires balancing efficiency and equity while refining the industrial system to harness rural e-commerce’s potential to advance common prosperity.

A critical element in this process is leveraging the demonstrative role of exemplary regions, enterprises, bases, and business leaders to drive innovation and promote the high-quality growth of rural e-commerce. This approach can bridge regional disparities and promote equitable access to e-commerce opportunities in several ways. 

First, it can facilitate information sharing and encourage widespread entrepreneurship. In rural China, typically a society of acquiantances, imitation and innovation play a vital role in enabling mass entrepreneurship, laying the groundwork for entrepreneurial aggregation. Dinglou Township in Caoxian County, north China’s Shandong Province, is a compelling example. Local villagers initially began selling clothing on Taobao.com, one of China’s largest e-commerce platforms, creating a strong demonstrative effect. This inspired many others to open online stores, resulting in the proliferation of “Taobao villages.” These villages exemplify a cascading entrepreneurial model: one household inspires a street, one street drives a village, and one village catalyzes an entire township.

Second, the demonstration mechanism can enhance market connectivity, promote the circulation of production factors, and extend industrial chains, thereby fostering industrial clusters characterized by upstream-downstream synergies in rural e-commerce. For instance, in Zhaxia Township, Shuyang County, Jiangsu Province in eastern China, a “lead goose” program catalyzed the creation of hundreds of entities, including family ranches and planting and breeding farms. This initiative spurred the emergence of new industries and formats in rural e-commerce, enabling full-chain development in sectors such as flowers, trees, and miniascape, and bringing into being robust industrial clusters.

 

Third, it can promote resource sharing and help narrow the digital divide. In the evolution of rural e-commerce, disparities in infrastructure, access to information, and skill levels have posed significant challenges to inclusive development. Demonstration serves as a way to encourage those who have prospered to assist others in catching up, promoting the shared use of production resources such as information, technology, human capital, and logistics. This reduces entrepreneurial costs and helps bridge the gap between urban and rural areas and among different regions, paving the way for more balanced e-commerce development.

Deficiencies

Subject to the market environment, industrial structures, and farmers’ competencies, demonstration in rural e-commerce faces three significant inadequacies. 

First, a lack of comprehensive top-level planning and design hinders the effectiveness of rural e-commerce demonstrations. As demonstration is predominantly entrepreneur-driven, its effects are often incidental and may even lead to disorder. Institutional barriers, such as regional protectionism and monopoly-driven competition, impede deeper integration among different regions. Additionally, disparities in natural and social resource endowments across regions limit the potential for complementary advantages and mutual benefits.

Second, the geographical and spatial scope of demonstration remains constrained. At present, demonstration in rural e-commerce is mainly manifested in diffusion by acquaintances, relying on traditional geographical, kinship, and industrial relationship networks, restricting influence to neighboring villages and townships, and making it difficult to form cross-regional patterns. In addition, e-commerce operators tend to prioritize market operations, treating demonstrations with public benefit or social responsibility attributes as secondary, incidental actions arising during the formation of cooperative market relationships. A lack of systematic planning for demonstration efforts further constrains their effectiveness.

At the same time, to avoid competition in the same region, many e-commerce operators are reluctant to share key information and technologies with others, exacerbating the spatial limitations of the demonstration effect. 

Third, a lack of deep industrial linkages persists. On one hand, typical regions and the areas they influence fall short of strong market connections, and no “ecosystem” has been established in terms of industrial systems, structures, and value chains. There has been no high-quality collaboration in areas such as production decision-making, product type adjustments, marketing innovations, and after-sales service follow-up. On the other hand, the demonstration models are often characterized by simple imitation and direct copying, lacking substantial innovation. The homogenization of marketing products and models in neighboring regions leads to issues like low-price marketing, malicious competition, and the “bad money drives out good money” phenomenon, which further hinders the transformation and upgrading of the e-commerce sector.

To address the above issues, it is essential to build a multiparty coordinative mechanism involving the government, the market, and society. Efforts should also focus on establishing more exemplary role models, promoting cross-regional collaborations, strengthening market guidance to foster a rewarding ecosystem, and managing risks effectively to enhance market capacities. 

Zhou Lang is an associate professor from the School of Marxism at Huazhong University of Science and Technology. 

Edited by CHEN MIRONG