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A marketing push by China-based e-commerce giant Alibaba is opening up new business opportunities for Australian companies, according to researchers at the University of Sydney Business School.
Concerned that internet growth in China’s urban centres may eventually plateau, Alibaba has so far provided internet infrastructure and access to its Taobao portal to people in nearly 800 remote rural villages and has earmarked another 10,000 for development.
"Many of these villages operated at a subsistence level,” said University of Sydney Business School senior lecturer Dr Barney Tan.
With a Taobao portal linking them to the rest of China and the world, Dr Tan says, these villages are now able to develop commercial enterprises and purchase consumer products via the internet.
Dr Tan added that the concept of the 'Taobao village' is driven by concerns about China’s saturated internet market, particularly in urban centres.
“This is a challenge that is commonly faced by a lot of other e-commerce giants across the globe including Amazon and eBay,” he said.
“Alibaba recognises that opportunities in developed markets could plateau and become increasingly saturated so they have decided that reaching out to areas that were previously digitally excluded would be a way to continue their business growth.”
Dr Tan believes that Taobao villages will lead to an improved standard of living for rural people across China and greater commercial access to suppliers and markets beyond the coast for Australian businesses.
“Right now, with the infrastructural developments that are happening, the means to connect to Australian or foreign businesses online is growing exponentially just because of the links that Alibaba has basically created,” he said.