For many people, selling knickknacks online is a hobby. In China, it’s becoming a national policy to solve poverty.
As part of one of the more ambitious — and successful — approaches to reach President Xi Jinping’s goal of eliminating poverty by 2020, China has created more than 1,000 “Taobao villages” within the last decade.
These villages are so-named because residents sell everything from dance costumes to electronics to children’s toys on one of the world’s largest retail sites, Taobao. Within just a few years, many communities have seen thousands of people who left for brighter futures come back to build up the local economy in these Taobao villages.
By last measure, Taobao — a property owned by Chinese retail giant Alibaba — was the 12th most visited site on the internet. The total value of all its goods in 2013 was judged to be more than $US145 billion, a figure that dwarfs Amazon’s $US88 billion.
China’s government has looked at those figures and seen them as an opportunity to spur economic growth in poor villages. As Josh Freedman reported for Quartz, buildings are painted with hopeful slogans, such as “Through Taobao, you can escape bitter days. E-commerce runs toward the road of happiness.”
For the most part, different regions sell different items. Villages in Ping county (located in northern Hebei province) sell children’s bicycles, Quartz reports. In villages nestled in southwestern Yunnan province, people sell handmade decorative objects.
Approximately 1,000 of these Taobao villages have been created since 2003. They include thousands of families selling goods that, collectively, are worth millions. The effect has been almost wholly positive: Residents are able to create viable online marketplaces, which has compelled people who previously left to return.
“Some people from our village saw us and would think, ‘How odd. These brothers are always working till late every day. What are they up to?” entrepreneur Lv Zhenhong told CNBC. “In the first three months of opening a Taobao store, we had no business but we kept on working and didn’t give up.”
Today, Lv’s outdoor equipment store does $US8 million in annual revenue. He says one out of every three sleeping bags sold on Taobao comes from his company.
A certain portion of goods from Taobao villages are sure to be counterfeits of name-brand products, many of them consumer electronics. In December of 2016, the US Trade Representative Office re-added Taobao to its blacklist of “notorious marketplaces.”
The move doesn’t explicitly penalise the site, but it does place it in an unfavorable light.
Image issues aside, such a strategy for reducing poverty likely wouldn’t have been possible 10 years ago. China has spent the better part of the last decade bringing billions of citizens online, and its efforts have led people to both buy and sell from one another, boosting economic growth.
An estimated 10 million people find work in the e-commerce sphere, representing 1.3% of China’s labour force.
Taobao villages won’t be the only means of eliminating poverty — other large, top-down programs meant to uplift social welfare are sure to play a role, too — but they have seemed to energize China’s poor with an entrepreneurial spirit.
In 2016, Bert Hofman, a World Bank economist and country director for China, expressed a strong sense of optimism.
“We hope to be able to help villages in poor and remote areas in China to become Tabao villages as well, and help lift themselves out of poverty,” he said. “We won’t stop there: indeed, much like Alibaba is a global e-commerce platform, so can the Taobao villages become a global phenomenon.”
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