Just a week ago, Alibaba
pumped $717 million into Huitongda Network, an e-commerce
platform serving 15,000-plus rural
towns in China.
It’s also started investing in AI
And they’re not the only ones moving from tier-1 cities like Beijing: Tencent-backed WeDoctor is making healthcare
more accessible for folks in tier 3 and 4 cities, while Alibaba
has also entered the space with their delivery drones.
As more and more players enter the space, what are the major implications?
For companies like Alibaba, Tencent, and other listed companies, this delivers their growth stories to investors in the public market.
Smaller companies and startups are targeting rural markets because the competition in big cities is too fierce and user acquisition costs too high.
There are also companies who build business models just for small cities, often because the founders understand the life and mentality of small town people.
In the short term, this is a blue ocean. So far, a few companies such as Pinduoduo and Qutoutiao have managed to penetrate this market. With more attention from big guys as well as VCs, the competition will surely heat up. Maybe soon it will become a red ocean like any other industry in China.