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This study investigates the potential of e-commerce to enhance rural agricultural businesses by allowing farmers and producers of agricultural products to sell on platforms such as Taobao. Using a survey methodology, we analyze whether Internet sales enhance rural businesses in either of two ways – increasing producers’ profit margins by avoiding monopolistic or collusive local middlemen and reorganizing the supply chain in an efficient manner, and increasing sales volume by reaching a larger market. The study also investigates barriers that rural Internet sellers face. For the purpose of this study, we conducted field interviews with online shop owners and a nation-wide survey of rural agricultural online shops. The survey results confirm our hypothesis, and demonstrate that market forces – the increase of producers’ profit margins and the expansion of market, aided by government initiatives, have driven down barriers to rural e-commerce and created economic stimulus that benefits rural economic development and potentially eliminates poverty. The study also suggests that more can be done by the government in increasing e-commerce training, subsidizing shipping services in rural areas, and establishing local e-commerce associations. Recent research also conforms with our conclusions drawn from the survey results, beyond which, the evolution of platform economy has posed new challenges and further research is required.

The promise of the Internet for rural economic development in China: a study of agricultural e-commerce