Digital RetailWhen considering the needs of those in poverty, a demographic often lacking consistent access to basic necessities such as food, shelter and clean water, advancements in digital retail may seem an unnecessary luxury. However, in recent years, many have noted the positive impact of the digitization of commercial services on economic growth in China; despite being “the world’s third largest and fastest-growing major economy,” 13% of China’s population (almost 200 million people) still live below the poverty line of $5.50 a day as of 2021.

Advantages of Digital Retail

One of the main advantages of digital retail is its ability to overcome geographical obstacles: rural workers are now able to promote their products and services to a much larger consumer base than previously. They are also now able to contribute to the development of entire industrial chains in e-commerce. Think tank China Watch attributed the creation of over 28 million jobs in rural regions of China to the expansion of online retailing and, in 2019, digital sales reached almost $16 billion in more than 760 impoverished counties. Marginalized groups in particular, such as the elderly and women with children, have benefitted from gaining access to customers and resources that might otherwise lie beyond their reach.

The expansion and implementation of digital retail in urban areas can also come with additional financial resources: digital access to loans and insurance can provide support and protection for burgeoning businesses. Key players in China include MYbank, which granted more than 4 million contactless loans within impoverished counties in its first five years (2015-2020), and, whose digital agricultural loan collaborations in the first two years (2017-2019), worth approximately 1 billion yuan ($143.5 million), reported no overdue repayments or defaults.

The Barriers

Despite the progress so far, there are still challenges and nuances that need consideration. Many of the above-mentioned developments require a certain level of technological infrastructure to operate, which many rural and impoverished regions have not yet reached. Almost 30% of the Chinese population is still without internet access, rendering these services unattainable to them, according to a 2021 study. The same study noted a “digital divide” in the nation, whereby the expansion of digital inclusive finance significantly alleviated poverty rates in the more developed eastern region of China yet showed “no significant effect” on the “relatively backward in development” western region.

Ongoing Efforts

In 2019, Xubei Luo, senior economist at World Bank, discussed attempts to facilitate e-commerce for marginalized groups: a village agent to assist locals in navigating digital retail platforms, make payments for villagers so that the latter only pay once they are satisfied with their product and bypass the need for villagers to make their own website results in a “lower threshold for the less advantaged to participate.” She equally noted the possibility of government assistance through “strategic subsidies.”

Looking Ahead

In the face of poverty, the expansion of digital retail in China has brought tangible benefits, enabling rural workers to reach a wider consumer base and contribute to local economic growth. The accessibility of digital loans and insurance has provided crucial support to emerging businesses, fostering financial stability. Although challenges remain, efforts are underway to bridge the digital divide and ensure that marginalized groups can participate in and benefit from the opportunities offered by e-commerce.

– Helene Schlichter
Photo: Flickr

Daylily/Poverty in China
Chinese President Xi Jinping has made substantial efforts to reduce poverty in China for the millions living without basic necessities. In 2015, President Jinping set the goal of eliminating poverty in China by 2020. There were 1.4 billion people in poverty at that time, defined as earning less than $1.10 a day, a lower benchmark than the World Bank poverty guideline of $1.90 a day. While some of his methods to alleviate rural poverty have been conventional, like increasing tourism and promoting produce production, in one Chinese district his tactic has been far from ordinary.

The Yunzhou District of China is located about 200 miles west of Beijing, in the Yanshan and Taihang mountains. Given its remote location, the cities in this district have dealt with high levels of poverty. However, in the last decade, farmers in this area have capitalized on the fecund growth of daylilies to alleviate poverty in the region, and in China more broadly.

Medicinal Qualities of Daylilies

Daylilies are edible flowers that people use in Chinese herbal medicine. According to studies, they may have detoxification properties, aid in reducing insomnia, lessen hemorrhoids and calm nerves. Daylilies in China belong to a heartier class of flowers since they can grow in a variety of soil conditions, and the flower itself comes in many colors. Its botanical name, Hemerocallis, translates to “beauty for a day,” as most daylilies will bloom in the morning and die by nightfall. However, the flower will stay in bloom for several weeks because each stem has more than 12 flower buds.

Increase in Land for Daylilies

Though areas in the district, like Datong City and the Fangcheng new village, have been cultivating daylilies for more than 600 years, the district recently increased the land on which it grows daylilies by 10 times. Now, millions of daylilies in China grow on 10,000 hectares or the equivalent of more than 18,000 football fields.

President Xi Jinping’s Support for the Daylily Industry

On a recent trip to the district, President Jinping encouraged farmers and locals alike to continue developing the industry to reduce poverty in China. During his visit, President Jinping spoke about the country’s efforts to reach its goal of total poverty eradication by the end of 2020. So far, daylily production has helped lift more than 1 million people out of poverty. In 2019, daylily production generated $9.17 million for the district. President Jinping remains steadfast in alleviating poverty in the country despite having only a few months before his deadline.

Revenue from daylilies in China may seem like an unusual product to reduce poverty in China by Western standards. However, according to Eastern culture, the flower is a cornerstone of the Chinese market and therefore a logical aspect of poverty alleviation. Even though the Yunzhou District has been cultivating the flower for more than 600 years, it is comforting to know that the towns and cities in that district have utilized daylily production in the last 10 years to bring over a million individuals out of poverty.

Mimi Karabulut
Photo: Flickr