Pinduoduo cooperated with 6 other platform merchants to purchase 42.53 tons of coffee beans and other raw materials from poor households at a price of CNY 407,600.
Poverty alleviation projects by Pinduoduo. Photo: Credit to Pinduoduo website
On April 21, 2019, Pinduoduo (拼多多) launched Duoduonongyuan (多多农园, means fruitful farms in Chinese), innovative poverty alleviation and agricultural support projects, under the guidance of the Shanghai Municipal Government Cooperation and Exchange Office. The first station was settled in Baoshan, Yunnan.
Through the Duoduonongyuan, Pinduoduo will bridge the direct connection between the “last mile” to the consumer end and the “first mile” to the goods’ place of origin. By exploring the new model of the agricultural industry, the farmers become the main beneficiaries of the whole industry chain.
Yunnan has a history of coffee planting for over 100 years, accounting for nearly 99% of China's coffee yield, however, the international share is no more than 1.7%. Most of the coffee beans produced in Yunnan can only be used as raw materials for instant coffee such as Nestle, Kraft, etc. purchased with the minimum price. HU Faguang (胡发广), an expert from Yunnan Thermal Economy Institute said that “Yunnan coffee is mainly planted by small farmers, with low standardization and weak anti-risk consciousness, are far out of lines with the current market. Especially in international acquisition, the farmers do not have any right to negotiate and are continuously subject to lower prices. If the existing chain does not transform to a more stable mechanism of domestic sales, Yunnan farmers cannot rely on planting coffee beans to get rich, or get rid of poverty."
In order to reverse the current situation, at the end of March 2019, Pinduoduo cooperated with 6 other platform merchants to purchase 42.53 tons of coffee beans and other raw materials from poor households at a price of CNY 407,600.
In 2018, the Pinduoduo made a total of CNY 65.3 billion orders for agricultural products and by-products, making it one of the largest online retailers for agricultural products in China. In addition to Yunnan Baoshan, the first phase of the Duoduonongyuan will have five demonstration projects in Yunnan, involving tea, walnuts, yacon, pepper, and local mushrooms. In the next five years, 1,000 demonstration projects in 8 provinces and autonomous prefectures, covering the southwest and northwest regions in China.
In recent years, rural area’s e-commerce is in a stage of high-speeding, and the transaction volume of rural online retail has more than doubled. Although the growth rate of rural e-commerce has slowed down in 2017, the retail transaction volume has still exceeded CNY 1 trillion.
In the e-commerce platforms such as Pinduoduo, JD.com, and Taobao that all take actions in shoring up the poverty alleviation in rural areas, the e-commerce will further accelerate economic development and prosperity in these areas in the other way round. At the same time, rural e-commerce will boost the development of new industries such as crowdfunding in agriculture, shared agriculture, and customized agriculture, promoting an “Internet + Agriculture + Tourism” development scheme.
President Xi Jinping has underlined the need to shore up areas of weakness and carry out more targeted poverty alleviation efforts in many occasions, also with the rapidly increasing rate of consumptions in low tier cities, the Duoduonongyuan is a win-win strategy.