Targeted Poverty Alleviation Through E-commerce: A Case Study of TFXK E-commerce Platform in Zhenping County

1. Challenges

Despite its convenient location and abundant rural resources, Zhenping County in the southwest of Henan Province used to have a large poor population. Due to the absence of standard and unified agricultural production and information asymmetry on the part of farmers, there existed such problems as ill-informed decisions on what to grow, lack of sales channels for agricultural products and poor access to urban consumer markets, as well as difficulties in brand building of small and medium enterprises and agricultural cooperatives. This led to poor sales of local high-quality agricultural products, low income of farmers, and a large poor population.

2. Solutions

In 2017, the local authorities of Zhenping County started to encourage the development of new-type e-commerce enterprises. Thanks to government support and private investment, a local e-commerce platform specializing in agricultural products produced in poor areas (TFXK) was established.

The platform is operated by Zhenping TFXK Big Data Development Co., Ltd. With the vision to “connect rural resources and urban consumers,” the company has independently developed a local online sales platform and established a complete supply chain. Based on in-depth analysis and R&D activities, the company offers standard local specialties that have unified brand names and packaging. It also engages in processes such as agricultural product quality and safety inspection, place of origin certification, quality traceability, product collection in the field, precooling at production site, cold storage and classified packaging. It directly purchases high-quality agricultural products from poor households in the county, shortening the links of transportation and storage. A logistics network linking villages and townships is in place. In addition, through real-time big data monitoring in the backend, the company can stay up to date on daily transactions, sales and inventory of agricultural products as well as income from nonagricultural employment. Data on product categories, price fluctuations, consumer habits and the like can all be gathered and analyzed in the backend, which can provide accurate information for poverty alleviation through e-commerce and help set the direction for regional economic development.

The government is a controlling shareholder of the company, which ensures that the platform mainly serves public interests. Ten percent of the platform’s profits are used to help impoverished people who are unable to work. In addition, the company provides basic-level jobs such as transportation, warehousing, logistics and categorization for registered poor population, thus increasing their income.

3. Outcomes

The e-commerce platform has created distinctive local brands by bringing local agricultural products to the tables of urban consumers. Since it was put into operation, the platform has offered over 300 products in six categories, namely vegetables, fruits, staple food & cooking oil, dry goods, spices and sauces, and meat and eggs, served close to 125,000 users, registered over 5,000 views and 1,000 orders a day, and generated a sales revenue of nearly RMB30 million. It has helped a large number of people shake off poverty and get a stable income.