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How to Promote Transformation and Upgrading of Agriculture by E-Commerce- ShuYang Case from China

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Hongdong Guo, Chair and Professor, Department of Agricultural Economics and Management of Zhejiang University, China.
Presented at the ReSAKSS-Asia conference “Agriculture and Rural Transformation in Asia: Past Experiences and Future Opportunities”. An international conference jointly organized by ReSAKSS-Asia, IFPRI, TDRI, and TVSEP project of Leibniz Universit Hannover with support from USAID and Deutsche Forschungsgemeinschaft (DFG) at the Dusit Thani Hotel, Bangkok, Thailand December 12–14, 2017.

Publicado en: Economía y finanzas
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How to Promote Transformation and Upgrading of Agriculture by E-Commerce- ShuYang Case from China

  1. 1. How to realize agriculture and rural transformation by E-commerce---ShuYang case from China Professor Hongdong Guo China Academy for Rural Development, Zhejiang University E-mail: guohongdong@zju.edu.cn
  2. 2. Questions to be Discussed •What is agriculture and rural transformation? •What is a successful agricultural and rural transformation? •How to realize agriculture and rural transformation ?
  3. 3. Successful agriculture and rural transformation • Part time farmers turn to professional farmers • Low value-added products turn to high value-added products • The short industry chain becomes a long industrial chain • Not competitive to competitive • Low income farmers turn to high income farmers • Scattered production into cluster production • Poor rural areas become rich and beaufiful areas
  4. 4. Challenges facing agriculture and rural areas in china • Difficult product sales • High production cost • Industry is not competitive • Hard to make money in agriculture • Poor farmers • Young people are not willing to specializes in agriculture • Rural hollowing
  5. 5. • In order to solve the problem of agriculture and rural development Chinese government has taken many measures, and one of the important measures is to encourage the use of information technology, especially e-commerce to develop rural areas.
  6. 6. Two main forces driving e-commerce development Government ( Alibaba, JD.com,Tencent etc.) E-commerce giants
  7. 7. Government support – Policies • “The guidance on the promotion of e-commerce development in rural areas”.State Council General Office • “The guidance on the accelerated development of e-commerce in rural areas”.Chinese Ministry of Commerce • The project of “ information used in rural areas.” Department of Agriculture Source: Aliresearch Cultivate market participation Build up basic infrastructure Issue policies and create service environment
  8. 8. How to realize agriculture and rural transformation by E-commerce---ShuYang case from China
  9. 9. 沭阳简介[SHU YANG ] located in Northern Jiangsu Province the second most populous county in China the most populous county in Jiangsu Province Shuyang is a typical large county of agricultural population with a large agricultural population and a poor farmer.
  10. 10. favorable location north latitude 34° innovation Poverty gives rise to the desire for change tradition Dynasties of Ming and Qing Hu's Garden Shuyang: County of flowers and trees in China
  11. 11. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 the development process of rural e-commerce in Shuyang germination: 2000—2006 gallop: 2013—nowbreakthrough: 2007—2012 • low Internet connectivity • webpage • high Internet connectivity • the third party e- commerce platform • e-shops • the upgrading of infrastructure • new supply networks • government involvement • service system • Taobao Village → Taobao Town → Taobao Village Cluster
  12. 12. Farmers sell flowers and trees by E-commerce wide spreadly now
  13. 13. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心
  14. 14. 8 billion 500 million yuan e-commerce business turnover in 2016 33 thousand e-shops 2.7 parcels per second 2016 85million 2015 70million 2017 before AUG 69million the number of parcel The development of e- commerce is very fast
  15. 15. 三 Part-time farmers become professional farmers
  16. 16. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 Scattered production into cluster production 1991 2001 2015 3 thouand mu 40 thousand mu 500 thousand mu
  17. 17. 二 30 thousands farmers do business 洒水壶、保鲜膜 鲜花、干花 花盆、肥料籽种、树苗 盆景、乔木 铁锹、遮阳网 商品种类 一应俱全
  18. 18. field cultivation nursery stock horticulture green Low value-added products turn to high value-added products colorful potting
  19. 19. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 R & D breeding cultivation marketing processing tourism original chain extended chain The industrial upgrading of flowers and garden plants: extension of industrial chain
  20. 20. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心
  21. 21. Not competitive to competitive Shuyang 40% the total sale of flowers and garden plants on Taobao platform
  22. 22. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 More and more local people get a job employment 250,000 5000
  23. 23. Young people returned and started e-business
  24. 24. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 Happy family
  25. 25. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 Farmers' net income grew rapidly
  26. 26. nice car pretty house Farmers become rich farmers
  27. 27. Poor rural areas become rich and beautiful areas
  28. 28. charming countryside in Shuyang
  29. 29. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 government / policy e-commerce ecosystem agricluture farmers wealthy farmers powerful agriculture beautiful contryside entrepreneurship innovations The development mode of Shuyang's rural e-commerce e-commerce ecosystem e-commerce
  30. 30. Key factors for the success of Shuyang Case
  31. 31. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 The first key factors: farmers' entrepreneurship and innovations
  32. 32. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 industrial foundation physical cost risk cost learning cost embeddedness cost-oriented locally-oriented grounded entrepreneurship result in The second key factors: good industrial foundation
  33. 33. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 electronic commerce platform physical cost risk cost learning cost asset-light cost-oriented locally-oriented grounded entrepreneurship support The third key factors: favorable e-commerce platform
  34. 34. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 The third key factors: favorable e-commerce platform
  35. 35. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 low logistics cost → online competition The fourth key factors: efficient logistics system
  36. 36. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 缺 氛围 人才 网货服务 设施  try to understand the present situation and act appropriately to the situation Last but not least: role of government Shortages ????? atmosphere talentsfacilities service product
  37. 37. the government: improve infrastructure road and transportation network facilities
  38. 38.  e-commerce service center  Free Talent training  Support in terms of funds, sites, taxes, etc. the government: policy support
  39. 39. 浙江大学中国农村发展研究院 中 国 农 村 电 商 研 究 中 心 have a sound e-commerce ecosystem e-businesmen e-service provider platform firm training agency finance agency public sector e-commerce association product provider logistics firm industry park supply network e-business' needs  commodity supply  loan  training  image processing  brand design  e-shop decoration  marketing tactics  data analysis  Logistics
  40. 40. Conclusion and Implication •E-commerce is an important means to promote the transformation of agriculture and rural areas •The governments of developing countries need to continue promote the access of the Internet and the development of e-commerce in rural areas to create a sound e-commerce ecosystem for farmers.

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