Zhanggezhuang Town in Shandong Province is well-known for its cherries. More than 95% of its land area of 25,000 mu (1,666 hectares) is devoted to the planting of cherries, and farmers derive the bulk of their income from the cultivation and sales of the fruit and related industries.
In recent years, many farmers and agricultural merchants have set up online businesses on e-commerce platforms such as Pinduoduo, further driving the development of the local cherry industry.
In 2021, Zhanggezhuang Town sold four million kilograms of large cherries through Pinduoduo, with a transaction value of 60 million yuan ($8.9 million), helping the farmers to increase their income by more than five million yuan, according to a report by The Paper.
Zou Dong is an example of a New Farmer who has built a sizable business using direct-to-consumer internet retailing. These New Farmers are typically tech-savvy youth who are second- or third-generation farmers and adopting e-commerce and digital technology to help them sell better. In the case of Zou, he returned to his hometown to start an online business on Pinduoduo after graduating from China Agricultural University.
Pinduoduo’s team purchase model allowed the platform to aggregate scattered demand from consumers across the country into a focused demand within a short time span, Zou said. This is especially suitable for agricultural products with a short shelf life, such as cherries, he said. The direct shipping from farmgate has also greatly reduced fluctuations in demand and helped his company and fruit farmers to reach long-term supply agreements, eliminating intermediate transaction costs.
Zou sells more than one million kilograms of large cherries through Pinduoduo each year, with half of the supply coming from Zhanggezhuang Town. His company employs 150 to 200 workers to sort, pack and ship the fruit.
The digitalization of agriculture is boosting productivity and creating jobs, helping townships and villages across China to surmount common challenges such as an aging workforce, and lack of economies of scale due to smallholder farming. Agricultural e-commerce has also offered an alternative channel for farmers to reach consumers more directly, allowing them to keep more of the sale by reducing middlemen fees.