Although there are over 700 million Chinese people classified as living in rural areas, only about 125 million of them use the Internet. That’s a penetration rate of 18.5%*, far below the urban Chinese rate of 50%. These users are usually the last ones on the minds of International companies that are setting up shop in China’s first and second tier cities. However, when it comes to Internet marketing, rural Chinese Internet users are a rising force.
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From our experience, there are several things that have held back online shopping in rural China. First, credit cards are still not as popular in those areas. Second, rural Chinese people don’t yet have much trust in online shopping in general. Finally, delivery to rural areas is a still a problem. These barriers are quickly eroding though, and that’s obvious in the figures above, which show about a 30% increase in online shopping, online banking and online payments in rural China as well as a 27% increase in search engine usage.
But what better way to learn about rural Chinese Internet usage, than to ask a rural Chinese Internet user. We spoke to Yongquan Yin, who owns a toothbrush factory outside of Yangzhou. He gave us his opinions on some of the challenges to e-commerce in rural China.
Q: Do you and your family members have credit cards? Why or why not?
A: None of us do. I don’t want to end up owing money, it would make me uncomfortable. Plus, there aren’t any big banks in a little place like this anyways. Only the small banks are here and they don’t provide a credit card service. Of all the people I know, very few have credit cards.
Q: Have you purchased products online?
A: I still haven’t bought anything online myself, but I sell toothbrushes online. I’ve noticed that younger people are buying things on Taobao, things that they can’t find at the local stores. I don’t really know how to use Taobao though, and I don’t have online access to banking, so I don’t think online shopping would make my life much easier. Plus, I can find everything I need at local stores. I don’t need anything special, so I don’t need to go online to shop.
Q: Is shipping to your area fast and reliable?
A: Not necessarily. Some express shipping services ship here; others won’t because they think it’s too far away from the city.
Q: Why do you think fewer rural Chinese people use the Internet than their urban counterparts?
A: I started using the Internet late. People in the cities that are my age - or even older than me - can all use computer. But I just learned how in the past couple years. I started using the Internet for business purposes.
I don’t use the Internet for entertainment though because I’m too busy with my business. My needs are pretty simple, I just use the computer to check client orders via email. My main focus is on production, I don’t want to be on the computer all day.
My 11 year-old kid uses the Internet more though, but all he does is play games and listen to music. Honestly, if you asked me to use the computer for a whole day, I wouldn’t even know what to do…except for maybe watch movies.
Q: If you start getting more and more foreign customers over the Internet, how will this affect your Internet-usage habits?
A: I’d hire somebody to do the “online sales” work. I have some friends that have bigger businesses than mine and they’re in this situation. They hired a university student that understands English and computers to do all the Internet stuff for them.
I don’t have direct foreign clients myself though, I deal with trade companies and they deal with the foreign buyers.
*The data for this report was gathered by the China Network Information Centre over a period that ended in December 2010. You can see the original Chinese-language report here. This is the most up-to-date CNNIC data related to the differences between urban and rural Chinese Internet usage that I've found. Note that there are more up-to-date statistics for China as a whole, and I posted 15 pretty graphs about that here.
Infographic by Joshua Nguyen of Jive Design.