E-commerce creates jobs, reduces inequality in developing countries: report

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ISLAMABAD: E-commerce can flourish in developing countries and in rural areas and be a powerful instrument to create employment for semi-skilled workers, women and other groups, according to a new report.

The report, jointly released by the World Bank and Alibaba Group, titled “E-Commerce Development: Experience from China”, is based on data and analysis of the structures and development of e-commerce in China and related government policies and private sector initiatives.

“China’s experience shows that developing countries can harness digital technology and e-commerce to create jobs and improve people’s lives,” said Victoria Kwakwa, World Bank Vice President for East Asia and the Pacific.

China’s e-commerce trade volume reached 31.63 trillion yuan (about 4.5 trillion U.S. dollars) in 2018. The number of people working in e-commerce amounted to 47 million by the end of last year, China Global Television Network reported.

The report showed a clear link between e-commerce development and household welfare improvements, especially in rural areas.

Data from the Ministry of Commerce showed that online retail sales in rural areas totaled 777.1 billion yuan in the first half of the year, increasing 21 percent year on year.

In Taobao Villages, a concept trying to help rural online entrepreneurs do businesses, households that participate in e-commerce have incomes 80 percent higher than households that do not participate, said the report .

The number of “Taobao Villages”, has exceeded 4,000 from only three villages in 2009 when the concept was first introduced, said Alibaba in August. The villages are now located in 25 Chinese municipalities, provinces and regions.

China has one of the largest and fastest-growing e-commerce markets in the world, accounting for more than 40 percent of the total value of e-commerce transactions worldwide. More than 5 percent of total employment in China is in e-commerce. Online purchases have become part of daily life for many Chinese households.

“The rapid development of rural e-commerce in China has proved that innovative business started by grassroots entrepreneurs in rural areas of developing countries can thrive through the e-commerce platform,” said Wen Jia, Partner and President of the Public Affairs of Alibaba Group.

The report also pointed out challenges that need to be tackled in e-commerce development, including counterfeit products, technical concerns as well as imbalances in competition.

“The achievements China has made in e-commerce can be explained by the country’s substantial investment in infrastructure over decades and the rapid improvement of its business climate in recent years,” said Gong Sen, Executive Vice-President of China Center for International Knowledge on Development .

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