Taobao Villages as a model for the development of E-commerce in Africa

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In a thought-provoking article published by China Daily in early August, the deputy director of Development Reimagined Leah Lynch argues that Taobao Villages, an e-commerce platform created and supported by China’s technology giant Alibaba, could become a model for Africa in dealing with poverty and unemployment among the increasing population of young and educated people.

The success of Taobao Villages derives from a 2016 guideline, passed and released by China’s State Council Leading Group for Poverty Alleviation and Development with the aim of setting up 60,000 e-commerce poverty relief stations and boosting e-commerce sales for villages in underdeveloped areas. To facilitate the practice of the guideline, governments at all levels in China have invested in e-commerce training workshops, offered loans to people in impoverished areas who intend to run an e-business, and encouraged young graduates to return to their home villages and set up entreprises to promote e-commerce in rural China. Since then, Taobao Villages have generated approximately 10 million RMB ($1.4 million). Research published by the World Bank and the Ali Research Group has shown that Taobao villages have ostensibly equally benefited men and women in poor villages. Meanwhile, Taobao Villagers have created tens of thousands of job opportunities which have provided work for the unemployed and raised income for the low-income population.

With the rise of the middle class, particularly in countries like Nigeria, South Africa and Egypt, and technological advancement, Lynch believes that Africa has great potential to develop e-commerce following the model of the Taobao Villages. However, challenges do exist and have to be overcome before African Taobao Villages can emerge and prosper. Diverse political situations, languages and scales of the markets, customers with different backgrounds and needs and varied mobile payment applications will inevitably create difficulties for an integrated e-commerce platform like the Taobao Villages. The infrastructure surrounding e-commerce should be emphasised as a precondition for the existence of an integrated platform, and governments in Africa have to work out plans to speed up infrastructure building projects. Efforts are also needed to build trust between consumers and e-business owners and improve delivery services, so that the reach of e-commerce in Africa can be expanded.

Lynch is confident about the idea of setting up e-commerce communities in Africa, and argues that China and other partners can help countries in Africa tackle the aforementioned issues. African countries should try to attract investment, funds and loans from different actors such as governments and corporations with effective plans, and wisely use the money to organise their own e-commerce communities and further promote products that are originally made in Africa. Although Covid-19 has posed huge challenges to countries in Africa, it has also brought the continent opportunities to increase e-commerce, and therefore ways of mitigating poverty and reducing the unemployment rate.