By Wesley Wu-Yi Koo
Behind China’s impressive economic rise is the biggest human migration in history. By 2013, some 269m rural residents had become migrant workers in cities, offering cheap labour and sustaining urban growth. However, unable to register and settle their family members in the cities, these migrant workers are forced to leave behind children, spouses, and old people in the villages. This has taken a tremendous toll on the rural society.
Today, there are 61m “left-behind children” and 40m “left-behind elderly” in Chinese villages. Some 79 per cent of the left-behind children are under the care of grandparents, who are often uneducated and lack parenting resources and energy. As a result, the academic scores of 88 per cent of these children fall below what would be the passing line in cities.
The rural elderly, separated from their children, record an average suicide rate of 0.5 per cent, five times the rate for urban elderly. Villages, which have been the backbone of Chinese society for thousands of years, are falling apart. Reality paints a bleak picture of marginalisation, but there exists a beam of hope.
In the past decade, the rise of e-commerce has transformed China’s economic landscape, with more than 300m active online shoppers today. A lesser-known trend is that e-commerce has begun to vitalise the rural economy as well. In 2013, roughly 2m out of the 8m online stores on taobao.com and tmall.com – two large e-commerce platforms – were registered in rural areas.
In early 2014, China had just 20 “taobao villages”, classified as those villages in which at least 10 per cent of the population is involved in the selling of goods online or those in which annual revenues from those sales surpasses Rmb 10m. But by the end of 2014, there were 211 such villages.
The impact of taobao villages extends far beyond the generation of wealth. It is also helping to moderate the more deleterious effects of urbanisation. Our field research has indicated that e-commerce in some areas has helped reverse the labour drain and brought families back together.
A case in point is Dongfeng, a village of 1,200 households. Just ten years ago, most young people from Dongfeng were working in the cities. Some said that during that time if an elderly person died, the village “would not be able to muster four able-bodied men to carry the coffin”.
However, since the creation of stores in Dongfeng selling Do-It-Yourself furniture online, the village’s social structure has been transformed. Youngsters are now much more likely to stay in their village, and college students from Dongfeng also tend to make their way back after graduation. It is also common for the elderly to help with their children’s online businesses, leading to a richer labour force and feeling of self worth.
Another example involves Wantou, which is known for the traditional craft of willow-weaved baskets. In 2006, a few villagers started selling baskets online. Their initial success demonstrated that, through e-commerce, producers of baskets could skip the economic middleman, access the market directly, and retain a significant portion of the profit.
Over time, villagers who had previously been migrant workers gradually came back to Wantou and set up their own stores online. Today, Wantou is known as a “three no village” – no lonely elderly, no left behind children, and no divorces due to physical separation caused by migration.
How is e-commerce able to penetrate rural areas and drive social change? First, e-commerce allows villagers to work close to their families and with their families. This is because it can provide villagers with access to the national market in even the most remote locations.
Second, e-commerce, compared to offline business, has a far lower barrier to entry. Initial requirements rarely exceed Rmb 5,000 and access to basic infrastructure (e.g. mobile phone, roads). Third, the development of an e-commerce ecosystem creates an ambiance for learning.
Our preliminary results indicate that numerous taobao villagers, ranging from elementary school pupils to seventy-five-year-olds, are picking up computer knowledge and business communication skills. These learning opportunities not only render a village more competitive economically, they also help build, attract, and retain talent, safeguarding the village from the pernicious side of urbanisation.
The social challenges associated with mass urbanisation are not unique to China. Regions such as Uttar Pradesh in India and Kentucky in the United States are also facing issues including mass brain drain and dwindling villages.
The ongoing development of e-commerce in taobao villages demonstrates that, in an increasingly connected world, the rural society does not have to be overturned for urbanisation to take place. Instead, villages can ride the wave of urbanisation toward building an economically viable and socially integrated future.