Li Yanchun (left), secretary of Yanxia Village, Yanji Township, Shuyang County, Suqian City, Jiangsu Province, observes a plant in a greenhouse with another resident of the village.

Located near China's east coast, approximately 500 km northwest of Shanghai, Yanxia was the most impoverished village in Yanji Township, Shuyang County, Suqian City, Jiangsu Province, until the early 1980s. Residents possessed less than 0.3 mu of land per household and were not able to grow enough food to sustain themselves throughout the year.

Yanxia native Li Yanchun was born in 1961 and returned to the village in 1983 after serving in the military. He became village secretary the following year and vowed to help it become more prosperous.

Situated where northern and southern China, which exhibit notable disparities in climate, soil, and water composition, converge, Shuyang plays a pivotal role as a conduit for the exchange of trees and flowers between the two regions due to the fact that it gives them a place to begin to acclimate before they make their way to other areas, which enhances their chance of survival.

Li recognised the necessity of diversifying Yanxia's economy in order to improve the fortunes of a village marked by a dense population and limited arable land. Building on Shuyang's robust historical tradition of floral cultivation, he began pursuing the industry after becoming the head of the village. Initial sales efforts in Huai'an, a major city of about 4.5 million people bordering Suqian, yielded RMB18 – a noteworthy sum considering that a teacher's salary amounted to less than RMB30 per month at that time.

The initial taste of success that Li enjoyed prompted him to launch a campaign in which flowers would be hawked in streets and alleys and stalls would be established in urban vegetable markets in locations within a 200-km radius of Yanxia, which several young people from the village got involved with. The efforts paid off, and the team soon expanded into Jiangsu's neighbouring provinces, where they engaged in similar undertakings.

In 1988, a pivotal moment arrived when Li secured a lucrative order worth RMB700 for trees that were going to be used in a greening project from a flour factory, which ignited a vision of producing more seedlings for use in urban greening in order to increase wealth and prosperity.

In the early 1990s, a visiting Penzai (miniature tree cultivation, or bonsai, which originally comes from China) master generously imparted his expertise to a young Yanxia resident, which ultimately led to the emergence of other skilled Penzai artisans who were able to pursue the undertaking and develop it into a thriving, high-end endeavour, thus diversifying the village's arbour industry.

E-commerce Facilitates Rural Vitalisation

Some of Yanxia's residents had been utilising Taobao and other e-commerce platforms since 2003, but Li did not recognise their substantial potential until a woman from outside the local area who had recently married a Yanxia resident and moved to the village earned over RMB100,000 selling flowers online in 2006.

After conducting extensive research, the village secretary thought he could use internet-based methods to help advance Yanxia's floral industry. The village initiated fundraising efforts in order to purchase computers, arranged for young residents to attend e-commerce training sessions in other locations, and taught locals how to run online stores when they were ready.

Government departments in the area did not pay much attention to e-commerce at first, but data analytics alerted e-commerce and technology company Alibaba of Yanxia's potential in this area, which prompted it to invite the village's residents to open wholesale stores on their platform. They eagerly agreed and the endeavour soon catalysed e-commerce development in the village.

In 2013, Yanxia gained distinction as one of Alibaba's 20 inaugural Taobao Villages, which refers to a village in which residents got started in e-commerce primarily via the Taobao Marketplace, at least 10% of families are actively engaged in e-commerce or where there are at least 100 active online stores, and total online sales exceed RMB10 million per year, marking its status as China's pioneer Taobao Village specialising in floral and tree businesses.

After Yanxia obtained the designation, Li successfully persuaded 23 university graduates who were from the area but had been living elsewhere to return to the village in order to establish their own online businesses. Leveraging their advanced educations and proficiency with e-commerce, some began earning RMB400,000 to RMB500,000 a year, which compelled more people who were born in the area but had been living and working elsewhere to return in order to grow flowers, launch their own stores, or get involved with packaging and logistics when they heard about the success that was taking root in Yanxia.

The village's residents were operating 800 stores on various e-commerce platforms and the stores were employing more than 2,800 people as of February 2024. Staff working with the village's major e-commerce enterprises earn an average of RMB50,000 to RMB60,000 a year as of the same time period and generate additional funds from their own tree and flower sales endeavours as well. The economic transformation that has occurred in Yanxia has also created employment opportunities for individuals who were previously unable to sustain themselves with farming or had been working in more-prosperous areas. Some elderly members of the community who are in their 80s have found work in packaging and sorting roles, for example.

Yanxia's E-commerce Challenges and Solutions

The success that Yanxia has achieved with e-commerce is inspiring, but challenges continue to exist. Profit margins have dwindled in recent years as purchasing and labour costs have surged, despite a reduction in per-piece delivery costs that has occurred. Flower growers often secure purchase contracts with large e-commerce merchants as well, which promotes stability via predetermined prices and corresponding deposits, whereas smaller vendors are at the mercy of market-driven fluctuations and may be forced to sell at a loss in order to maintain their digital presence, as when online promotions lead to heavy demand.

The increasing number of online merchants and e-commerce platforms that have emerged in recent years has also led to increasingly fierce competition, which has led to some vendors opening physical brick-and-mortar stores and engaging in live commerce in order to enhance consumer trust. These types of undertakings can be relatively costly and pose significant challenges for small online vendors, however.

Li has noted the importance of product authenticity and is committed to continuing to execute in this area, as exemplified by efforts he has made related to online grape sapling sales. Basic sapling offerings lack transparency and fail to instil consumer confidence, whereas establishing a test farming base can be pivotal to substantiating product credibility. He champions rural vitalisation through the promotion of local speciality sapling products, advocating for brand integrity, and unwavering commitment to excellence, with an overarching objective of fortifying brand identity while adhering to candid and forthright management principles and delivering superlative products.

Source:

AliResearch

China's Administration and Management Institute (AMI) of Ministry of Agriculture and Rural Affairs (MARA)