Taobao Villages: A Sustainable Form of Rural Development?

This paper explores the challenges of e-commerce as a lever for rural development, as well as the socio-economic problems faced by individual sellers and migrants in Taobao Villages (villages in China with a high concentration of Taobao sellers). Much of the official reports surrounding e-commerce, such as those by the Chinese government and AliResearch, are positive in nature and do not focus on the uneven patterns of e-commerce development. However, I use the data published by AliResearch, online public sentiments, academic papers and field experience to question two prevailing hypotheses of Taobao Villages: (1) that e-commerce is an effective tool for rural development, (2) and that the participation of sellers, including migrants, in a Taobao Village, automatically generates noticeable improvement of their socio-economic situation.

This conclusion of this paper is that e-commerce is actually thriving in villages along the urban coast, rather than within the inland or western parts of China. Moreover, owing to the type products that rural dwellers sell – namely agricultural produce – and the lack of high consumer demand for these goods, there is little room for rural sellers to scale up their businesses. On an individual level, Taobao’s business model favours incumbent sellers who are given opportunities to generate even more sales, perpetrating a “rich gets richer, poor gets poorer” phenomenon among sellers, irrespective of geography or product category.