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China's live-streaming e-commerce offers lifeline to fruit farmers amid Covid restrictions and short season

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Each June, Xishan Island, an eastern tourist destination surrounded by green mountains along Suzhou's Taihu Lake, is typically congested with tourists in what has become known as the "loquat traffic jam" or "bayberry traffic jam", a result of visitors from nearby regions such as Shanghai rushing to get a taste of the hyper-seasonal local fruits.

This year, however, the town is quiet. Travel-wary consumers remain concerned about Covid-19 restrictions and quarantine rules owing to recent outbreaks in Shanghai and southern Jiangsu province, where Xishan is located. Only one part of the island remains bustling with activity: the logistics businesses helping package fruit sold through e-commerce.

Along a street with two of these courier services sits Jiang Jiaqi's storefront, which doubles as an office and is sometimes used as a budget studio for live streams and short videos. Jiang, who returned to his hometown six years ago after working in Suzhou's manufacturing industry, uses his family-run e-commerce business to sell local agricultural products with his wife, a former clothing exporter.

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Jiang and his wife are just two of millions of agricultural e-commerce merchants contributing to what was a 422 billion yuan (US$63 billion) industry in China last year. The market has nearly tripled from 150 billion yuan in 2015.

Affected by travel restrictions due to Covid-19 outbreaks in nearby regions, logistics businesses are now the only places bustling with activity on Xishan Island as they package up fruit sold online. Photo: Yaling Jiang alt=Affected by travel restrictions due to Covid-19 outbreaks in nearby regions, logistics businesses are now the only places bustling with activity on Xishan Island as they package up fruit sold online. Photo: Yaling Jiang>

Part of the reason for the rapid growth, which comes amid a slowing economy in China, is President Xi Jinping's push for a "rural revitalisation" to improve farmers' livelihoods. But joining the race to peddle produce online comes with new challenges for those not familiar with the work.

At 36 years old, Jiang's career change came with a big change in his environment. He went from managing production queues of precision instruments to working with logistics personnel and responding to clients on his smartphone. He also got to ditch his work uniform for a straw hat he uses to shield himself from the scorching sun while hiking through mountains to pick fruit, and filming it all for his online profiles.

Live-streaming brings a new technological twist to an agricultural e-commerce market that started to take off in China in 2006, largely because of e-commerce infrastructure built by tech giant Alibaba Group Holding. "With rapid development and improved logistics, the sector has been diversifying," said Guo Hongdong, professor of Agricultural Economy and Management at Zhejiang University.

Alibaba, which owns the South China Morning Post, has long dominated e-commerce in China, through its Taobao Marketplace and Tmall platforms. During the recent June 18 shopping festival, Taobao hosted nearly 10,000 live streams from China's rural regions each day. In total, the platform has more than 100,000 live-streamers across China who are farmers, according to the company.

However, newer players like Pinduoduo and Douyin, the Chinese version of TikTok also owned by ByteDance, have been eroding that dominance with new ways to sell goods through video content.

Jiang now runs a family-run e-commerce business selling local agricultural products with his wife (pictured), a former clothing exporter. Photo: Yaling Jiang alt=Jiang now runs a family-run e-commerce business selling local agricultural products with his wife (pictured), a former clothing exporter. Photo: Yaling Jiang>

"Brands are looking for ways to grow outside Alibaba's platforms because the traffic there has reached the ceiling," said Miro Li, founder of marketing consultancy Double V. Alibaba reported in March that it has 1.31 billion annual active consumers, just 90 million people shy of China's entire population.

"Consumer habits are also changing," Li added. "Douyin is a prime example of 'interest e-commerce', which drives sales with content, and consumers are less price-sensitive, instead of being focused on low prices with traditional e-tailers."

Having started his business in late 2017, Jiang has witnessed this shift. When he first started selling produce online, the popular method was through chat groups on Tencent Holdings' dominant social networking app WeChat. This "community e-commerce" was similar to the group buying model that became popular during Shanghai's recent lockdown.

To keep up with the trends, Jiang eventually opened a shop on Taobao and sold goods on Pinduoduo through a partner before Covid-19 hit in 2020. However, he found it too hard to attract traffic without paying promotional fees.

"These platforms only give traffic to new stores, but there are too many similar products," said Jiang, who graduated college in 2008, amid the global financial crisis. He is now focused on using social e-commerce app Douyin to reach an audience across China, as well as WeChat's more recent competing feature Channels to keep in touch with friends and acquaintances.

Unlike other parts of WeChat that restrict shared content to users' contacts, Channels is a combination of private and public traffic because the videos can be viewed by strangers, said Jiang. In Chinese marketing, private traffic can be fully controlled by a seller, while public traffic is shared with a third party.

A WeChat group is commonly referred to as private traffic, whereas Douyin's broader audience consists of public traffic. After using the latter, Jiang found that "anyone, anywhere - whether they're from Yunnan Province, Heilongjiang province or abroad - could come across my video and ask me about prices".

Jiang said he believes Douyin provides more value to users compared with other platforms he has used. "It provides data that includes views, likes, shares, although my numbers aren't exactly high, but you'd roughly know the age and gender of your audience. This is something that Channels does not do," he said.

Jiang shoots videos for his Douyin account while collecting fruit in the mountains of Xishan Island. Photo: Yaling Jiang alt=Jiang shoots videos for his Douyin account while collecting fruit in the mountains of Xishan Island. Photo: Yaling Jiang>

Short videos and live-streaming have become the most popular marketing tactic in China's hyper-competitive e-commerce environment. Pinduoduo, a leader in agricultural e-commerce, created its own short video feature in 2020 and earlier this year moved it to the platform's landing page. It also began to lure more users with cash rewards.

Alibaba has been cashing in on live-streaming e-commerce as well. In 2020, that feature alone brought in US$60 billion in gross merchandise volume for the company.

Tencent has also placed increasing importance on WeChat Channels in a bid to find its own success in live-streaming e-commerce.

"Traditional e-commerce platforms launch short video and live-streaming features to boost conversion and return on investment," Double V.'s Li said, adding that the two content forms can push users to make purchases within a short period of time. She said Douyin is likely to capture more of this traffic, especially after recent troubles faced by top Taobao live-streamers Viya and Austin Li Jiaqi.

Selling agricultural goods specifically on live-streaming platforms has even become big enough to capture the imagination of New York- and Hong Kong-listed New Oriental Education & Technology Group. The once dominant online education service pivoted to live-streaming e-commerce after the Chinese government banned for-profit private tutoring. Founder and CEO Michael Yu Minhong, who has become something of a live-streaming influencer himself, said the shift was to "help more farmers, with the goal of achieving common prosperity", referring to the national drive to reduce wealth inequality.

Yang Lihua, a 58-year-old farmer on Xishan Island, only noticed the rise of e-commerce over the last two or three years, when she started seeing her fruit get more sales online thanks to distributors like Jiang.

Her day during the bayberry season normally starts at 4:30am, when she starts picking the fruit from the trees. While she typically stops in the afternoon, Yang said she will go back out if Jiang gets more orders.

"Without Covid, many tourists will come here and pick the fruit themselves, but they don't dare come now," she said. "All the sales of local fruits and tea are affected."

Yang Lihua, a 58-year-old local farmer on the Xishan Island, standing on the delicate branches of a bayberry tree while she picks the fruit in June. Photo: Yaling Jiang alt=Yang Lihua, a 58-year-old local farmer on the Xishan Island, standing on the delicate branches of a bayberry tree while she picks the fruit in June. Photo: Yaling Jiang>

Yang and her relatives have already picked more than one ton of bayberries this season, and Jiang could be responsible for selling half of it.

"I'm essentially an arbitrageur," Jiang said. Although he also produces honey and grows loquats himself, most of the other local delicacies he sells - including bayberries, tea and prickly water lily - come from other farmers, who are decades older than he is and generally lack online marketing skills.

His initial vision was to "let farmers sell their goods without leaving the door". However, realising this vision has left him at a disadvantage this year, as big wholesalers from outside Xishan swarmed to the region and bought directly from the farmers, leaving Jiang with little bargaining power.

Jiang generally sells his loquats by agreeing on a set price in advance through his sales channels outside Xishan. This year, his estimated costs were off the mark. He still fulfilled the orders, though, to maintain his relationships with his buyers.

The hyper-seasonal bayberries must be carefully placed in so-called Ferrero-style packaging, which separates each fruit with a plastic dome, contributing to its high cost. Photo: Yaling Jiang alt=The hyper-seasonal bayberries must be carefully placed in so-called Ferrero-style packaging, which separates each fruit with a plastic dome, contributing to its high cost. Photo: Yaling Jiang>

The high price of packaging, increasing logistics fees, and an unusually short season this year have made it nearly impossible for Jiang to scale up his sales of loquats and bayberries.

Bayberries must be carefully placed in so-called Ferrero-style packaging that separates each fruit with a plastic dome, and they must be transported through cold-chain logistics. He sells each 2.5kg box for 198 yuan, a price that might be too expensive for budget-focused Pinduoduo.

Having come to terms with the limited manpower of his two-person operation, Jiang decided that his next goal should be to boost his profile on Douyin, where he currently has 13,000 followers.

"Once your account takes off, you have all the resources you need ... If I focused my energy on live-streaming e-commerce when I started, I could be 'lying flat' right now," said Jiang, referring to a trend that promotes doing the bare minimum to get by.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.

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