Pinduoduo, China’s largest agriculture platform, is working with China Post and farmers’ cooperatives to bring agricultural products from remote areas to the national market as part of efforts to boost rural incomes.
The three-way model, which allows China Post’s local offices to open online stores on Pinduoduo and source directly from agricultural co-ops, has proved successful in Gansu and Shaanxi provinces, where sales of local agricultural produce have soared.
Pinduoduo entered a strategic partnership with China Post in September 2020, with the goal of setting up 150 bases by 2022 to help Pinduoduo improve sourcing of quality agricultural products for its 731 million consumers.
By utilizing Pinduoduo’s insights into consumer demand and China Post’s extensive logistics network, smallholder farmers can improve shipping efficiency and be better shielded from market fluctuations.
"Cooperatives can bring together smallholder farmers, while the postal service has a nationwide system and social responsibility to help the poor,” said a Pinduoduo spokesman. “Pinduoduo is deeply rooted in agriculture and understands the difficulties of smallholder farmers. We are committed to promoting such multi-party cooperation."
China Post is ranked No. 2 among postal and express delivery companies worldwide in terms of revenue behind Japan Post and ahead of the U.S. Postal Service. With its capillary-like coverage of the country, it is said that no other company has as fine an understanding of local conditions as the postal service.
Pinduoduo was one of three technology companies commended by the central government for their contributions to China’s poverty alleviation efforts. The company has focused on agriculture since its establishment in 2015, bringing a systems approach to addressing the inter-related issues of how to grow, move and sell food.
Its initiatives include improving downstream market access for farmers and training younger talent, building midstream logistics infrastructure to reduce waste, lower costs and speed up the delivery of agricultural products. The company also works with industry partners and universities to develop upstream technology to increase the resilience of the food supply chain.
Tianshui, once an important stop on the ancient Silk Road carrying goods and ideas between China and Europe, is better known as a cradle of Chinese civilization than an incubator of innovation.
That is changing with the new sales model being forged by leveraging on the logistical expertise of the postal service, access to Pinduoduo’s national market of consumers, and high-quality produce from one of China’s most unspoiled regions.
Wang Xilu, a staff member with the local postal service of Tianshui City, Gansu Province, spends up to four hours livestreaming daily to help sell local fruits and other agricultural products online.
"E-commerce is the rising trend,” said Wang, a recent graduate who joined the postal service in Tianshui. “With our online store and the express delivery service, I’m proud to be part of this multi-party cooperation that can help farmers sell local products to a wider group of consumers."
Tianshui postal service set up a team of four young staffers to operate the online store. They are responsible for everything from selection of products to shipping orders and monthly revenue monitoring. The fruits are mainly sourced from 12 local farmers’ cooperatives visited and chosen by the operation team.
Since the opening of the official store in May 2019, the Tianshui postal service has processed 174,200 orders of agricultural products such as apples, cherries, peaches and handmade chili sources, with sales of 4.36 million yuan ($674,300).
Pinduoduo is pursuing more strategic investments and partnerships to accelerate the digitization of the agriculture supply chain so that it can share the efficiency gains with its users.
The company doubled its agriculture GMV to more than 270 billion yuan in 2020, cementing its position as the biggest platform for agriculture sales in China.
“The number of co-ops that are selling to the national market through e-commerce is still small,” said the Pinduoduo spokesman. “Pinduoduo encourages more co-ops to open stores directly. We are also working with the postal service and other institutions to bring more co-ops into the digital economy, so that we can help more farmers to prosper.”