Alibaba plans massive 3-year expansion of Rural Taobao network

In an effort to cover more of the smaller towns across the vast expanses of Western China, Alibaba Group said it plans to widen the reach of its “Rural Taobao” project to include 1,000 counties and 150,000 villages across China in the next three years.

Launched in 2014, Rural Taobao is the company’s program to bring high-tech cloud-based logistics to the most remote areas of the countryside and connect them to its global network. According to Alibaba, about half of China’s 1.3 billion residents live in rural areas.

“Our mission is clear: We want to improve the living conditions of China’s rural regions,” said Bill Wang, vice president of Alibaba Group and general manager of Rural Taobao. “To do so, we need to provide high-quality goods, personalized services, smart logistic solutions and prices comparable to that of the cities.”

Rural Taobao consists of a series of e-commerce service centers that have been created in small towns, enabling villagers to both purchase products online and sell their goods via Rural Taobao’s dedicated online marketplace. Currently, Alibaba said the initiative covers 700 counties with more than 30,000 service centers, so the planned expansion would roughly double the number of service centers by 2021.

Alibaba cited figures from China’s National Bureau of Statistics, indicating that the average disposable income per capita in the country’s western rural regions in 2017 increased by 8.6 percent, year-over-year, to the equivalent of $2,066 per year. This growing wealth has fueled an online retail spike of 39 percent in 2017, compared to the previous year, totaling $194 billion.

The goals of the Rural Taobao expansion are to offer next-day delivery of merchandise and at-home installation of large electronic products, Wang said. Alibaba is also offering “Taobao Select Service Stations,” where villagers can purchase products, such as clothing and electronic items, at a physical location, for those unable to place orders online.