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Economy

Chinese Taobao Village's experience advances Malaysia's rural digitalization

October 18, 2023


Abstract : Eddie Mok never dreamed that one of his trips to China could completely change his life and even push forward the digital transformation in rural Malaysia.

Eddie Mok never dreamed that one of his trips to China could completely change his life and even push forward the digital transformation in rural Malaysia.

Inspiration: Eddie's training in Hangzhou

Eddie is a diligent young Malaysian entrepreneur, who started a parcel locker service company a few years ago and achieved notable results by working day in and day out.

In March 2019, a new opportunity was offered to this hard-working young man: Eddie received a letter from China's Hangzhou inviting him to participate in the training under the eWTP Alibaba Global Digital Talent Program.

Located in Bainiu Village in the Lin'an District of Hangzhou, Zhejiang Province, the training base was surrounded by mountains. Although it is an hour's drive from the city proper, this rural area that many people might expect to be tranquil was showing a bustling scene: There were many young people in the village, all engaging in the hickory nut business; among rows of large houses, even old ladies in their 70s and 80s were selling and buying things online. The digital village stunned Eddie and upended his perception of the countryside.

Through in-depth training, Eddie learned that as early as 2007, several farmers in Bainiu Village took the lead in riding the wave of the internet and managed to sell their nuts online. Now, there are dozens of e-commerce merchants in the village, which has embarked on a new road to prosperity.

The photo shows a digital screen in the agricultural makers center of the Bainiu Village E-commerce Building, Changhua Town, Lin'an District, Hangzhou, Zhejiang Province, China. (Xinhua)

The combination of digitalization and hickory nuts made Bainiu Village one of the most representative "Taobao villages" in China. From this change, Eddie clearly saw the possibilities that young people could bring to a small village.

He decided to learn from the experience of the "Taobao village" and use it in rural Malaysia. After returning to Malaysia, he established logistics platform Parcel365 in 2020 and e-commerce platform Shopla365 in 2022, hoping to connect local producers and consumers and empower rural e-commerce.

Removing obstacles: Electricity, internet access, digital payment

For a digital startup, electricity, internet access and digital payment seem to be three insurmountable obstacles. Overcoming them was the first major challenge for Eddie.

Rural areas in Malaysia account for 70% of the country's land, and a quarter of the country's population live in rural areas. Like almost all rural areas around the world, rural Malaysia faces marginalization and hollowing out of the population, and some villages in Malaysia have neither electricity nor internet access. Even if they do, they cannot use digital payment because they do not have access to transaction authorization codes.

In this digital age, rural Malaysia seems to have been left out by the internet world.

However, these were no big deal for Eddie. Drawing on Taobao's development in China's rural areas, he finally found a sustainable way to develop rural e-commerce in Malaysia through repeated trial and error in localization.

To build internet connection, Eddie partnered with Malaysia East Asia Satellite (Measat) to provide a satellite network for rural areas, giving local farmers the opportunity to buy products through e-commerce.

Eddie partners with Measat, a Malaysian satellite communications company. (Provided by Alibaba)

The cooperation between Eddie and Measat adopts profit distribution based on the e-commerce business: Measat does not charge Eddie internet service fees, but collects a certain percentage of commission for Eddie’s sales in rural areas. In this way, Measat has opened up the rural market, and Eddie has built mutual trust with the local villagers. Up to now, Measat’s internet signal has covered more than 3,000 villages.

To solve the problem of online payment, Eddie installed payment machines in each village's digital service center and issued a bank debit card to villagers who went to the village center for shopping. After the villagers confirm the products to be purchased, Eddie will collect cash and deposit the money into their bank cards, thereby encouraging villagers to swipe their cards to pay at the payment machine to complete the digitalization of the payment end, form the consumption habits of digital payment, and establish digital archives for the villagers.

To maintain a steady power supply, Eddie has set up solar panels next to each village's training center and installed over a dozen charging boxes. Villagers can rent charging boxes to power their home appliances and gain a stable power supply, thus laying the foundation for e-commerce activities.

Eddie and an employee set up solar panels at the village's training center to give the village a steady power supply. (Provided by Alibaba)

Eddie not only thinks about digital infrastructure for rural areas, but also continuously improves the shopping experience of villagers.

To help villagers learn to use the internet and enjoy internet access, Eddie has set up a service station equipped with a computer in each village center. Villagers can go to the village center to buy goods, and they can enjoy delivery service as long as the amount reaches 4,000 ringgit. At present, Eddie will send the goods purchased by the villagers to the village center about every two weeks, and the villagers will pick up the goods in the center. Eddie has also equipped village centers with refrigerators so that villagers in remote areas can buy products that need the cold chain. This model has been successfully piloted in more than 10 villages, with average monthly sales of about 4,000 ringgit (about 6,265 yuan) per village.

A step forward: From selling to farmers to helping farmers sell

Drawing on China's rural e-commerce experience, Eddie knows that the best way to help Malaysia's rural areas achieve sustainable development is to let villagers benefit from digitalization and establish a digital closed loop.

On the one hand, Eddie organizes young villagers to process food products ordered by urbanites, and provides raw materials and production equipment for these young people to ensure that the young villagers have something to do; on the other hand, he takes out 30% of the sales as the operating income of the villagers, so that the villagers can get tangible benefits and a sense of gain in the process of participation.

In addition, Eddie has begun to try using his social network to help local farmers sell their farm produce to Malaysian cities. At present, Eddie and his team have supported villagers in selling nearly 1,000 kinds of agricultural products online and helped 150,000 villagers sell their products.

Eddie helps farmers sell their agricultural products online. (Provided by Alibaba)

Eddie's entrepreneurial exploration has been widely noticed and recognized in Malaysia. Malaysian state media also reported on Eddie's entrepreneurial project, saying that it has helped Malaysia's villagers find new sources of income, get better education and enjoy more recreational activities, and has improved the digital economy in rural Malaysia.

Up to now, 140 public policy makers, nearly 4,000 entrepreneurs, more than 1,500 college teachers and more than 40,000 overseas students from over 60 countries and regions have participated in the training courses provided by the eWTP Alibaba Global Digital Talent Program. Thanks to the training, they have become the backbone of the development of the digital economy in various countries, and have endeavored to participate in and promote the digital development of their countries over the past few years. (By Zhai Shurui)

This photo shows a training session under the eWTP Alibaba Global Digital Talent Program. (Provided by Alibaba)

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Keyword: Alibaba China-Malaysia digital payment BRF case rural digitalization

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