The Chinese urban-rural Digital Divide and the development of E-commerce in rural China.

Abstract

Despite years of unprecedented economic development, China is still characterised by a deep urban-rural economic disparity. The urban-rural Digital Divide has contributed to increasing the income inequality caused by decades of urban-oriented policies. This affects the E-commerce industry, which has become a cornerstone of Chinese economy. The urban-rural gap also exists in the E-commerce sector, as the biggest portion of sales and revenues is concentrated in cities. Nevertheless, in recent times, rural China underwent a vigorous growth in Internet penetration and has entered the E-commerce industry as an important player. E-commerce gave great contribution to local economy, also thanks to policies by both the Government and the private sector aiming at alleviating poverty in rural regions. Furthermore, rural areas witnessed the birth of Taobao Villages, which have gained growing importance in the sector in recent years and have contributed to lifting millions of people from poverty. The present work analyses the E-commerce industry in China and how the Digital Divide issue affected economic development. The purpose of this work is to investigate on the expansion of E-commerce in rural China and the opportunities it represents for the economy of impoverished areas. As a final point, the work will examine the birth of new E-business models tailored to the needs of poorer areas by taking into analysis the case of Pinduoduo and its growth in low-tier cities.