Social Innovation and Poverty Alleviation: Evidence from an E-Commerce Intervention in China

Background and Purpose: Despite rapid expansion of its safety net programs to address rural poverty, poverty alleviation initiatives in China have encountered various challenge. Among many challenges, programs face issues of sustainability, largely stemming from the failure to promote economic independence among beneficiaries. In 2015, China announced that poverty rates in its rural villages would be brought to 2% or lower by 2020. This catalyzed a movement based on the concept of precise poverty alleviation and called upon collaboration among government entities, enterprises, and non-profits organizations to create social innovations that can help eradicate rural poverty. Our study is a case study of the G platform, an e-commerce poverty alleviation initiative which uniquely employs the use of poverty alleviation assistants. Assistants help farmers develop management and sales skills that enable them to successfully sell products on the platform. Our study aimed to analyze the effectiveness of the program in terms of skill development, poverty reduction, sustainability, and reproducibility. The findings shed light on the future of rural poverty initiatives in China and beyond.

Methods: Data from county C, a large source of the platform’s userbase, were collected with a mixed-methods approach. Using in-depth interviews and surveys, farmers, poverty alleviation assistants, and government officials were asked about the following: training, implementation, income, expenditures, program sustainability/challenges, and resources/supports. 150 farmers and 50 poverty alleviation assistants, chosen with a random sampling approach, received surveys that were used to gauge the initiative’s ability to improve work skills and increase household income. 

Results and Findings: The G platform has 1.6 million registered users and 220 poverty alleviation assistants. By September 2018, the cumulative volume of trade in the G platform was just under 88 million yuan (13.1 million USD). With the support of 71 poverty alleviation assistants, sales in county C reached about 10 million yuan (1.5 million USD) in 2018. The platform has brought three major changes for poor rural residents in the county. First, household incomes have increased and living conditions have improved. Second, both land-owning and non-land-owning residents benefited from the creation of jobs to help with production. Third, the most critical change is the mindset of local villagers. Most poor farmers had fallen into a pattern of accepting and even relying on government welfare benefits. E-commerce poverty alleviation differs in that it seeks to make a lasting change by addressing the root of the problem, rather than providing a temporary and unsustainable solution.

Conclusions and Implications: Each rural area has different resources and challenges, calling for specific, targeted solutions to reduce poverty in each region. Successful poverty alleviation initiatives demand innovative and evidence-based approaches that tailor solutions to each poverty-stricken area. For the rural poor with work capabilities but limited professional skills, such as management and sells, and resources, such as a digital market and platform, the innovative e-commerce program, in conjunction with the help of poverty alleviation assistants, provides an effective alternative channel for cultivating economic independence.