Accelerating innovation in both the technology and business domains, digital technologies have become essential across diverse sectors of the economy and society in recent years, and the rapid evolution that has occurred is reshaping traditional paradigms and creating new opportunities. Extending well beyond urban centres, the influence of digital technologies and the digital economy also penetrate into agriculture and rural areas, where they are deeply entwined with local economies. Signalling a transformative era for rural economies, the significant impact that digital technologies and the digital economy have on the structure, dynamics, and value realisation of agricultural product transactions is particularly noteworthy.
In 2022, the No. 1 Central Document, which is an annual policy statement released by the Communist Party of China Central Committee and State Council outlining national priorities that has featured tasks related to agriculture and rural areas high on its agenda since 2004, recognised digital commerce as a vital aspect of comprehensive rural vitalisation, and the strategic emphasis that it set out marked a pivotal juncture in the wake of absolute poverty being successfully eradicated in the country at the end of 2020. Beyond simply addressing the imperative for rural development, the shift in emphasis that has occurred has served as a catalyst for nurturing a resilient digital economy within the agricultural sector.
The notion of digital commerce carries multifaceted implications. At the macro level, it encapsulates the essence of business innovation in the digital era. As data assumes primacy as a production factor in the digital economy, the integration of cutting-edge technologies such as big data, cloud computing, the internet of things (IoT), blockchain, artificial intelligence (AI), and 5G heralds a profound transformation across production paradigms, lifestyles and governance structures.
The 2022 No. 1 Central Document prioritises enhancement of rural e-commerce infrastructure, streamlining of logistics and distribution channels, and standardisation of agricultural e-commerce transactions. Once digital technology is adapted to local resource endowments, it can be used to improve and optimise agricultural products’ distribution systems and can be seamlessly integrated with industries such as rural manufacturing and service industries, thus creating new scenarios that generate endogenous rural vitalisation force by making rural economies more distinctive and promoting new industries as well as business formats and models.
In the meso-industrial domain, digital commerce emerges as the evolved iteration of e-commerce, embodying the transition from internet technology (IT), which emphasises self-control and self-management, to data technology (DT), which prioritises public service and productivity enhancement – placing DT at the forefront. Within the agricultural realm, this shift is reflected in the digitisation of pre-production inputs, mid-production management processes, and post-production distribution channels.
As data emerges as a pivotal production factor, many Chinese counties renowned for their agricultural prowess have forged partnerships designed to leverage digital technology with leading enterprises, facilitating an integrated approach spanning research, production, supply and sales. This harnessing of data injects fresh impetus into the enhancement of agricultural quality and efficiency while charting new digital pathways for agricultural modernisation.
In the production domain, digital commerce leverages technologies such as geographic information systems (GIS), the Global Positioning System (GPS), remote sensing (RS), expert systems (ES), and the IoT in order to monitor agricultural big data. It seamlessly integrates production data such as light radiation indices and weather metrics into agricultural processes, which helps facilitate large-scale, standardised scientific production and management. Innovations such as smart greenhouses, smart irrigation systems, and smart hydroponics systems transcend the confines of traditional agricultural practices as well, driving digital and intelligent advancements in agriculture and significantly enhancing production efficiency.
Within the distribution sector, digital commerce fosters the integration of technologies, products, and services into the distribution system, reducing costs and enhancing efficiency.
In marketing endeavours, it unlocks the marketing network of agricultural products, enabling integrated operations spanning product production, online transactions, warehousing logistics and terminal distribution. For example, many online platforms optimise the value of agricultural products through consumption stratification, refining supply and consumption dynamics.
Harnessing big data from e-commerce platforms, digital commerce facilitates product enhancements and redesigns through targeted sampling and also accelerates the incubation of new products, fostering seamless traffic flow to energise industrial growth.
Embracing a holistic approach, digital commerce constructs digital profiles of industries and related entities through data linkage and fusion analysis. It also facilitates seamless integration across entire production, supply, and sales and marketing chains, furnishing comprehensive management, data analytics, product traceability, and other agricultural production and sales functions, thereby promoting quality enhancement, cost reduction, and efficiency gains across the agricultural landscape.
Zooming into the micro level, digital commerce delineates an individual's proficiency in data science – a vital capability for navigating the data-centric landscape of the digital age. It encompasses the ability to acquire and record data and adeptly utilise efficient scientific methodologies in order to store, organise, use, search through and retrieve, analyse, and leverage it so as to glean insightful information, engage in informed decision-making, and develop sound foresight.
Source: AliResearch
Administration and Management Institute (AMI) of China's Ministry of Agriculture and Rural Affairs (MARA)
