The rural market has been considered as a vast blue sea promising for development. There are plenty of strong competitors and Suning is one of them.
Summary of 2015: A thousand regular chain stores + 88 feature stores to spread O2O around the counties and towns
The well-being of the country has always been dependent on the well-being of each county. In this era of economic transition, how will county economy develop? What role will rural e-commerce play?
On May 10, in the opening ceremony of Suning Rural College and the first County Internet Plus Communication Development Forum, Liu Decheng, Associate Counsel of Department of Electric Commerce and Informatization of Ministry of Commerce, said that in many places rural e-commerce serves as an engine for the development of county economy.
Suning devotes itself to the development of rural e-commerce and now Suning has 1,500 village correspondents and set up marketing platforms for the agricultural specialties of more than 170 counties in over 30 provinces to contribute to the rural e-commerce.
Liu Decheng said that he was very glad to see that Suning pioneered in achieving Internet upgrading and by integrating its advantages offline, developed a unique O2O model of combining online and offline. He hoped that Suning would be global-minded, work with the villages, explore new models and new methods to serve the countryside, the agriculture and the farmers and contribute new experience and new achievements.
During the activity, Zhang Jindong, chairman of Suning Commerce Group, made a speech with the theme of “developing rural e-commerce and vitalizing county economy” and talked about the strategic goal of developing rural economy development e-commerce ecological circle. Zhang Jindong said that there are three thorny problems with rural e-commerce, that is, the lack of scale and structure of produce business, inadequate rural logistical network and lack of e-commerce talents. To solve these problems, Suning put forward three strategies. Firstly, Suning will promote the development of agriculture with regular chain stores of Suning.com and China feature stores. Secondly, Internet feature marketing platforms, such as Suning Dajuhui and Suning Crowd-funding, will be made use of to promote the brand development of agricultural products. Thirdly, Suning Rural E-commerce College will be founded to promote the professional development of rural e-commerce talents.
Hou Enlong, COO of Suning Commerce Group, confessed that he felt a deep affection for the countryside because he was born there. In front of over 100 county chiefs and Party secretaries and over 100 media, he unveiled Suning 2016 rural e-commerce strategy with the theme of “what makes the village beautiful and rich”. First he summarized the accomplishments Suning has achieved in the rural market in 2015 as “the beauty of achievements”.
“We have built 1,011 offline regular chain stores. The network covers over 1,000 counties, 5,000 towns and 50,000 villages around the country and has provided over 30,000 job opportunities; we also have 88 online Suning China feature stores which have over 10,000 selected produce specialty stock keeping units and have achieved a sales volume of over one billion yuan...” These statistics are sound evidence of “the beauty of achievements” of Suning rural e-commerce.
“By strong promotion of a single product, we have sold 250,000 kilograms of Gannan navel oranges in a month; we have integrated online and offline and sold 300,000 kilograms of Xiangxi pomelo in five days; and we worked closely with government departments and helped Shandong and Shaanxi farmers sell 3 million kilograms of apples. In the meantime, another outstanding feature of Suning rural e-commerce is providing customers in the rural areas with the same high-quality service experiences with their counterparts in the city. For example, during the 12th anniversary of Suning Redbaby, we brought many international brands to the countryside so that babies and kids in rural areas can also use the infant products as those in the cities.” Hou Enlong was extremely familiar with and proud of these successful cases. He said that these achievements should be attributed to their persistence in and promotion of O2O model. “O2O came to the rural areas and took roots: this was the accomplishment of Suning rural e-commerce in 2015 that we are most proud of.”
Suning vigorously promotes “Wudang” and will nurture 20 “most beautiful” model villages
Recently, iReserach, a famous third-party statistics analysis institution in China, released 2015 Rural E-commerce Sample Report. According to the report, in 2016 rural online shopping markets will reach RMB 460 billion and integration of online and offline will become an important way of shopping. This means that Suning, with “Wudang” model and “two-way model of “industrial products to the countryside and agricultural products to the city”, will have more edge in future competition.
Hou Enlong said that there was a huge market potential of the county-level with an ocean of opportunities. Suning has chosen to extend its channel to the grass-root level, use self-support model and export retail CPU. Apart from industrial products going to the countryside, another important intention of Suning is to bring produce to the cities in order to bring economic returns, sales, service, job opportunities and tax to the local people, which is the meaning of “Wudang” model.
Exactly out of the confidence in the Suning model and the positive expectation of the rural market, on May 10, Suning rural e-commerce released its overall strategy of 2016. In 2016, Suning will invest RMB five billion in the rural market; 1,500 regular chain stores will be added to the present 1,011 ones; there will be 10,000 proxy stations and franchised service stations; and there will be 200 specialty stores online. This will create job opportunities for 100,000 people who can work back in their hometown and will also create 20 “most beautiful village” samples.
In all these measures, 20 “most beautiful village” samples are the most discussed topic for the county Party secretaries and chiefs. Hou Enlong said that “the most beautiful village” programme is intended to cater to the present consumption trend and create a brand monthly experience tourism programme for middle class in the city to have an experiencing day in the most beautiful village. The product is based on the “five-locals” model and integrates with the local tourism, folk activities, handicraft, landscape products and activities by making use of various resources including O2O promotion, brand building, finance, IT information, etc. .
According to the plans, the county’s economic development driven by the most beautiful village” programme will be more worthwhile to be expected. Each sample of “the most beautiful villages” will achieve a sales volume of RMB 100 million in three years, help at least 10 local corporations to become excellent e-commerce dealers, make at least 10 local high-quality products famous all around the country, create at least 10,000 stable job opportunities and make the county become nationwide well-known and get into the list of top hundred counties.
Suning will train 100,000 people in Suning Rural E-commerce College
Of course, the implementation of the plans, including “the most beautiful village” programmes, is impossible without the support of logistics, finance and talent resources, etc. These resources are the strategic reserves, or the food and fodder, for the battles in the rural areas.
Logistics has always been a weak point in developing rural e-commerce. In 2015, Suning logistics covers 77% of the third-tier and four-tier markets. This year, it is planned that there will at least 500 more intersection transfer lines and at least 5,000 new delivering areas in the third-tier and fourth-tier cities, thus covering 87% of the total area of the third-tier and fourth-tier markets.
In terms of finance, Suning will also introduce its finance products such as FreePay and Yeepay to the rural market and will design three service finance products especially intended for rural e-commerce dealers: Easy-Rural Loan, Easy-Startup Loan and Easy-Funding Loan. In addition, Suning will open its information cloud to the small and micro businesses in the third-tier and four-tier cities so as to assist these corporations in making use of Internet plus.
Zhang Jindong said that the lack of e-commerce talents is a major bottle-neck that hinders the development of rural e-commerce. This year during the two sessions (NPC and CPPCC), Zhang Jindong, as a member of the CPPCC, made the proposal Construct education and training incubator system and speed up the development of rural e-commerce. Since Suning Rural E-commerce College has been set up and the training system of branch corporations and regular chain offices was established around the country, Suning will offer courses such as rural e-commerce popularization, rural e-commerce O2O practice, China feature stores operation and basics of e-commerce business. It is planned that in 2016 there will be 700 training sessions online and offline for e-commerce, which will cover over 100,000 people in the rural areas.
Insiders point out that by developing rural e-commerce and training farmers working back in their hometown into e-commerce talents, the local people don’t have to work far away from home and what’s more, labour and talents are gathered for the development of rural economy. Therefore, in a sense, Suning rural e-commerce strategy is also a talent strategy.