Commerce Ministry touts Taobao model

Commerce Ministry touts Taobao model

The government is committed to replicating the success enjoyed by Chinese villages

Villagers in Bainiu shelling walnuts.
Villagers in Bainiu shelling walnuts.

Thailand wants to start applying the Taobao Village model to help tackle poverty and raise community income via e-commerce and digital technology in February, starting with Ban Na Kha, Muang district in Udon Thani and Phu Khae, Chalerm Phrakiat district in Saraburi.

Commerce Minister Sontirat Sontijirawong said the ministry plans to develop three or four communities next year to raise income under the Taobao Village model.

"The ministry is looking to find another one or two locations," he said. "Communities must meet the criteria, which include developing community production to link with export opportunities in the global market and training people with e-commerce knowledge to educate people in the community."

Alibaba is sending a team to provide training to people in the chosen communities, based on Taobao's experiences in China.

In 2009, clusters of rural online entrepreneurs who opened shops at Taobao Marketplace, referred to as Taobao Villages, began to emerge in China.

The first farming village to take up e-commerce on a large scale was Dongfeng in Shaji town, Jiangsu province, where more than 1,000 households joined the digital economy by making furniture and selling finished goods online.

Two other Taobao Villages emerged in Hebei and Zhejiang provinces within a year. Since then, the number of Taobao Villages has been on the rise, becoming a significant force behind the development of rural e-commerce in China.

The Taobao model spans 3,202 villages and 363 towns in China. The 10 most popular products are garments, furniture, shoes, automotive parts, bags, leather products, toys, houseware, beds and housing repair equipment.

Products such as honey, musical instruments and ceramics have been added recently.

During his visit to China in November, Mr Sontirat asked Jack Ma, executive chairman and co-founder of Alibaba Group, to help transfer knowledge about the success of the Taobao Village model to address poverty in Thai communities.

In Ban Na Kha subdistrict, the textile market has 120 shops. There are also 70 textile shops located around the market. Most of the shop owners live in Ban Na Kha, Muang district in Udon Thani.

Bainiu village in Hangzhou province has seen success from the Taobao Village model, using e-commerce to raise community income.

The Na Kha community market sells locally made handwoven textile products of cotton, silk and Mudmee silk.

The Commerce Ministry has assigned Na Kha market as the handwoven textile centre of the Greater Mekong Subregion (GMS) to link with handwoven textile distribution centres of neighbouring countries.

Na Kha market can also connect with tourism activities because it is close to popular tourist spots in the province such as Talay Bua Daeng (Red Lotus Sea), Ban Chiang archaeological site and Wat Kham Chanot.

Phu Khae also operates the community market, selling locally made products such as herbs, processed foods, sweets and agricultural products.

"After high-ranking officials from related government agencies were sent to learn from the successes of Alibaba in developing local entrepreneurs to earn better incomes and create improved livelihoods through e-commerce and digital technology at Bainiu village at Lin'an in Hangzhou province at the beginning of December, I am confident that the Taobao Village model can be applied to Thai communities to raise their income," Mr Sontirat said.

Most of the 1,500 people at Bainiu village are farmers and uneducated, but more than 300 people or 20% of the total village population are engaged in e-commerce and have set up 68 companies to sell processed walnut products through both online and offline channels.

The model has seen villagers' income grow from 9,194 yuan a year in 2007 to 30,718 yuan in 2017.

The local Chinese administration also supports villagers with initial capital of 30,000 yuan (141,935 baht) or 100,000-200,000 yuan in interest-free loans for four years with logistics support for import and export of goods.

The model's success has attracted younger workers to rural areas and tackled poverty in communities.

The success factors include changed mindsets, raw material sourcing, cooperation among people in the communities and strong product development and brand management, as well as the use of online omni-channels to access consumers.

Vuttikrai Leewiraphan, director-general of the Business Development Department, said the department will select communities and provide them e-commerce knowledge and workshops on how to develop their businesses.

The department will also work with other state agencies such as the Internal Trade Department, the Agriculture and Cooperatives Ministry, the Industry Ministry, Thailand Post, the Community Development Department and the Interior Ministry, along with state agencies involved in agricultural product development and rural trade management.

Banjongjitt Angsusingh, director-general of the International Trade Promotion Department, said Thai products that are good enough to expand to the global market through online platforms include spa products, cosmetics, flowers, fruit, jewellery, and lifestyle and handicraft items.

A small factory for processing walnut products in Bainiu village.


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