China: The Great Dragon - First Season

This is a village in a coastal area of China.

Every day, more than one hundred thousand parcels are delivered from here to regions

throughout the country.

They're all products people have ordered through online shopping.

One out of every three of China's 1.4 billion people shops online.

The spread of smartphones has helped China's e-market grow to be the biggest in the world,

with annual revenues exceeding 600 billion US dollars.

People in China's rural areas live too far away from markets to be big consumers, but online

shopping has erased distance.

China's leaders are encouraging people not only in big cities, but also in rural areas, to

access these markets.

Young people are joining forces as they dream of tapping the huge online shopping market to

get rich.

Armed with personal computers, they are hoping to latch on to the Chinese dream.

But given the fierce competition, some see their dreams crushed.

The ballooning online retail market is feeding appetites of people in rural areas and big

cities.

We dive deep into this consumer revolution in China: The Great Dragon.

Zhejiang Province in China.

One village here is home to many e-commerce shops that sells goods online.

It's known as Taobao Village, in reference to Taobao, China's biggest online marketplace.

Hey.

We are visiting an apartment crowded with people and t-shirts.

31-year-old Jiang Wei has been selling t-shirts online since March 2016.

Jiang opened his online shop on Taobao.

The website has 500 million registered shoppers.

Jiang grew up in a poor inland village.

After graduating from junior high school, he worked at a spinning factory, earning a

salary of around $700 a month.

But when he and his wife had a child, he realized he couldn't hope for a prosperous life if

he stayed where he was, so he jumped into the world of e-commerce.

Now his best monthly profits reach about $35,000, and he's supporting ten relatives from

his home village.

The Chinese government has been paying a lot of attention to the success that online vendors

like Jiang are having.

Premier Li Keqiang visited the village in 2014.

He said that e-commerce was now driving the Chinese economy.

That dream became a reality for Jiang Wei.

He is now a company president, selling 500 t-shirts a day at $6 each.

It took him only four months.

A look at the order destinations shows a distinct trend.

Many people in rural areas in inland China, even as far as the Tibet Autonomous Region,

are buying his goods.

We followed the path of one t-shirt Jiang sold.

The village of San Zuo is one of the poorest areas of China.

People earn less than $4,500 a year.

>> NARRATOR: The person who ordered the t-shirt is a man

working at a factory in the village.

People living in villages like this are rapidly beginning to shop online.

The Chinese government is strongly touting e-commerce as a way to transform the

country's rural areas.

Up to now, China has grown by mass producing goods using cheap labour, and exporting

these products overseas.

But the country's economic growth has slowed down because of rapidly rising labour costs

and other factors.

Thus the world's second largest economy is now focusing its efforts on spurring domestic

consumption.

It's a structural change from dependence on exports, to a great increase in domestic

consumption.

The key to that shift is the roughly 600 million rural residents, mainly farmers.

They were left behind by China's economic boom, and cut off from opportunities for

consumption.

But incomes have doubled in the last ten years, as people went to the cities for seasonal

work.

The government wants e-commerce to awaken this latent purchasing power, and expects

it to create an explosion of consumption.

This is the village of Xiang Wan, in Jiangxi Province.

It is one of the places that didn't enjoy the benefits of the economic boom, and has no

adequate water supply facilities.

The young people have left to work in the cities.

And the remaining five hundred or so older people in the village get by on their own

means.

They couldn't shop because there were no stores, but in 2015, a service centre for

online shopping was opened here.

Together with e-commerce companies, the government set up this market where online

orders can be placed.

About 40,000 of these e-market places have been established around China, mainly in inland

villages.

The scale of the rural e-commerce marketplace has increased six fold over the

past three years.

The government has also directed the improvement of transport infrastructure, so

that goods can be shipped anywhere within the vast reaches of China.

During the past eight years, more than one hundred thousand kilometres of new roads have

been built in rural areas.

Better connectivity has radically changed consumption

patterns in these villages.

Rural villages, once cut off from the trends and fads of the day, can now buy the latest

goods.

A staff member of an online shopping hub in this village delivers ordered products.

As soon as an ordered item is delivered, another order is made.

Consumption stimulates desire, leading to further consumption.

This is a grand attempt to bring markets not only to the coastal cities where

consumption was concentrated, but also to the inland rural villages, the 1.4 billion

strong consumer revolution is now in full swing.

More and more, rural areas are becoming a part of the booming e-commerce trade.

And young people seeking their fortunes are being drawn to them.

Zhang Zehao is 27.

He graduated from university but couldn't land a job he wanted, so he came to this

village from a city in the north east.

The coal mining industry was once the mainstay of Zhang's hometown, but today, it's in

decline.

So he decided to stake his future on e-commerce.

Together with two people he met here in the village, Zhang started an online shop three

months ago.

25-year-old Fang Jilong graduated from a professional college where he studied IT.

He's also aiming to make his mark in the village.

22-year-old Wang Bin is another university graduate.

He too couldn't find the right job, so he joined the world of e-commerce.

There is one person the three look up to.

Jack Ma founded the online marketing giant Alibaba.

Jack Ma graduated from university, but he failed 30 times to get a job.

But from there, he eventually became the best known success story in China.

In 15 years, he has created a huge enterprise, with a market capitalization of 250 billion

dollars.

Jack Ma created the online market, Taobao.

Taobao has its own unique system... when customers order items, they pay online.

Only when items are delivered and customers send notice they're satisfied with their

purchases, payment is made to online shops.

This system has won the trust of shoppers in China, where there are many counterfeit

goods on the market.

Jack Ma started this glitzy gala event in 2009.

November 11th is Singles' Day.

It started out as a promotional day for single people to buy something for themselves, but

it's morphed into a day when much of China goes on a wild shopping spree.

With ten million virtual shops participating, it's become a national event, with sales

revenue topping ten billion dollars in a single day.

For online shop owners like Zhang and his partners, Singles Day is a prime opportunity to

make money.

If their products are recognized and get a good reputation, they'll be able to

continue selling them after the event.

(Shouting) On this day, the three partners

are heading out to find new products in anticipation of Singles' Day.

Next to the village is a huge wholesale market with dealers handling 1.7 million kinds of

goods.

The enormous market supports the online shops.

Zhang and his partners are selling accessories for women.

A wallet with an illustration of a girl on the front has caught their eye.

They reckon they'll be popular with junior and senior high school students in rural areas.

They'll put them on Taobao, carefully arranging them to get the attention of young girls.

They'll set the price at about four dollars, double their cost.

After deducting the shipping cost, they should make a profit of $1.50 per wallet.

Now they sell about 50 items per day.

Each partner's monthly salary is only $270.

Their target is to sell 500 items a day by Singles' Day.

The Chinese government is strongly encouraging young people to participate in

e-commerce.

finding a job.

In 2016, one out of three university students couldn't secure employment by the time

of their graduation.

In the 1980s, China was riding a wave of reform and opening up.

The elites who graduated from university had their future guaranteed.

universities.