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"xinjiang is becoming an opportunity, and we want to give it a try." zhang chenglong, who specializes in fresh fruit at pinduoduo, has never dared to "enter xinjiang" in the past because "the freight is too expensive, not only far higher than other regions, but even higher than the price of many fruits themselves." he is willing to open sales to xinjiang only when there are big promotions or when selling high-order, long-transportation fruits such as durian. but now, xinjiang is becoming a "hot commodity", and he even began to wonder if it would be a good business to sell peaches in the free shipping area to xinjiang?

this fantasy of "xinjiang welcomes me" stems from the fact that the logistics costs into xinjiang have been falling "steeply" in recent years: from the shipping fee of 20 to 30 yuan per order in the past, to the transit and consolidation fee of five or six yuan per order, and then to the recent proposal of pinduoduo to reduce logistics transit fees, "one yuan to xinjiang" does not seem to be a far-fetched goal anymore.

on september 9, pinduoduo announced the "10 billion yuan reduction" plan, which means that all logistics transfer fees incurred by merchants when delivering goods in remote areas such as xinjiang, tibet, gansu, ningxia, and inner mongolia will be borne by the platform. this is the first time in the industry that it aims to further dilute the logistics costs of goods going to the countryside and villages, and promote more high-quality goods to be directly connected to remote areas.

"the platform started first, so we have to follow suit." a domestic cosmetic contact lens brand merchant said that in gansu, qinghai, ningxia and xinjiang, due to the long delivery distance, the overall express delivery cost was about 3-5 times that of other regions in the past. now, thanks to the improvement of infrastructure shortcomings, the innovative delivery model of transit and consolidation, and the preferential policy of transit fee reduction, "xinjiang, tibet and other places that merchants have actively avoided in the past may become a golden runway."

westbound tolls continue to fall

to get rich, build roads first; to increase consumption, reduce "road fees" first. the "2024 china agricultural products e-commerce development report" points out that as digital agricultural products e-commerce enters a period of high-quality development, the national online retail sales of agricultural products will reach 587.03 billion yuan in 2023, about five times that of 2014. the scale of agricultural products entering cities has increased, but the "road fees" have dropped significantly. data shows that the logistics rate has dropped from 18% in 2012 to 14.4% in 2023.

the other side of going to the city is going to the countryside. in order to bring "more benefits" and "better services" to remote areas such as xinjiang, tibet, gansu, ningxia, and inner mongolia, e-commerce platforms represented by pinduoduo seized the pain point of "expensive travel fees" and launched a series of measures to help businesses and benefit the people.

a courier collection point in changji city, xinjiang. photo by liu zhou

in 2022, pinduoduo pioneered the transit and consolidation model, guiding merchants to send packages from xinjiang consumers to the transit and consolidation warehouse in xi'an, and the platform then shipped them to xinjiang through third-party logistics service operators. this transit and consolidation model can significantly reduce logistics costs and was soon replicated in more western regions such as tibet.

for example, in the past, merchants had to negotiate prices with express delivery companies under the direct delivery method. the current first-weight cost generally starts at 15 yuan, and if it is cold chain air transportation, the first-weight cost is as high as 20-30 yuan. however, under the consolidated transportation model, merchants usually only need to bear the freight from the place of shipment to the consolidated transportation warehouse and the second-stage freight of 3-5 yuan per order.

"before the opening of transit and consolidation, our direct express delivery fee to xinjiang was as high as 18 yuan/kg. due to high costs and thin profits, everyone's enthusiasm for shipping was generally not high. but after the transit warehouse was established, our first-stage freight to xi'an dropped to 2 yuan/kg, and the second-stage freight was 3 yuan/order. calculated based on a one-kilogram weight of goods, the express delivery fee was reduced by 70%." said an herbal tea merchant in anhui.

fee reduction and burden reduction are still continuing. recently, pinduoduo announced again that it would cover the logistics transit fees in remote areas and exempt merchants from the second shipping fee for the second shipment from the transit warehouse to the destination.

"in gansu, qinghai and ningxia, which are covered by the new policy, our freight costs are almost twice as much as in other regions due to inconvenient transportation," said zhang chenglong. these orders account for nearly 10% of the store's daily orders. "the platform's assumption of the transit fee means that our express delivery costs for each order can be reduced by 60% to 80%. we are confident that we can follow the platform's footsteps and invest in exploring potential and innovation in remote markets with this part of the savings."

the number of express parcels sent to xinjiang has increased rapidly in recent years. photo by liu zhou

"pinduoduo has implemented a policy that all logistics transfer fees in remote areas are borne by the platform, which has solved the problem that e-commerce has been difficult to promote in remote rural areas in the central and western regions due to high costs for many years." a senior logistics expert analyzed that the platform promotes the extension of downstream express logistics in remote areas through subsidy coordination, and promotes remote rural areas to better integrate into the domestic consumption cycle. "subsidies are not simply monetary subsidies, but by reducing logistics costs, a sustainable win-win industrial chain ecosystem including e-commerce merchants, express logistics and consumers has been built, which has played a leading and exemplary role in the entire industry and is worth learning from and promoting."

is the golden age of e-commerce heading west coming?

in fact, in recent years, the journey of e-commerce to the west has not only become cheaper, but the road has also been opened to people’s doorsteps.

take xinjiang, a vast and sparsely populated country, for example. urumqi is 1,775 kilometers away from the farthest county, which is farther than the distance from beijing to shanghai. due to the scattered layout of villages and high delivery costs, express parcels were always stuck in counties and towns in the past, and the "last leg" often took the longest time.

in july 2023, pinduoduo, together with a third-party logistics service operator, took the lead in piloting the express delivery service in shache county, kashgar prefecture, shortening the distance between the terminal distribution outlets and consumers from dozens of kilometers to a few kilometers, and shortening the signing time from several days to within 24 hours. two months later, this service went beyond shache county and was promoted throughout xinjiang; as of mid-october last year, it had achieved coverage of 60 counties in xinjiang.

notices announcing delivery of goods to villages can be seen at the entrances of many villages in xinjiang. photo by hao man

the policy of transit and consolidation combined with express delivery to villages is currently continuing to amplify its driving effect. "in the past year, the number of orders at the stations has increased significantly, three or four times. it is currently the busy farming season, which is the off-season for online shopping, but the average daily order volume in some villages with large populations can still reach 130-140 pieces. in yili alone, the average number of express deliveries to villages per day exceeds 10,000 pieces," said dong xiaogang, head of a third-party logistics express delivery station in yili, xinjiang.

data released by the state post bureau showed that in 2023, xinjiang's express delivery business volume (excluding postal parcel business) totaled 305 million pieces, and the total express delivery business revenue reached 6.2 billion yuan, an increase of 88.1% and 77.9% year-on-year respectively. both growth rates ranked first in the country.

with the accelerated release of a series of favorable policies such as reduction of transit fees, the enthusiasm of more businesses has been mobilized. they are eager to try and are preparing to or have already gone to this large western market that has not yet been fully integrated with the mainland to show their talents.

"with the help of pinduoduo, our products have the opportunity to be integrated into the national market. we also unexpectedly discovered that consumers in remote areas such as xinjiang and tibet also like shenzhen's coconut chicken." chen bin, an agricultural product entrepreneur, said that the platform's measures to promote the export of high-quality products to the west have been implemented one after another, which in itself is sending a signal, "how remote is it, how big is the market, why don't we go and take a look?"

to help the development of western china, pinduoduo has recently moved its live broadcast studio to tibet and other places.

since coconut chicken products have high requirements for logistics timeliness, chen bin is currently planning to build a supply chain in places close to remote consumers such as xinjiang and tibet to specifically ensure the order supply and transportation of these emerging markets.

the participation of these innovative forces is exactly what e-commerce platforms hope to see. "in the past nine years, we have allowed more and more agricultural products from remote mountainous areas to go nationwide, and we have also been committed to allowing consumers in remote areas to easily obtain a wide range of product choices like urban users, and share the dividends of high-quality development of e-commerce platforms." a relevant person in charge of pinduoduo said, "whether going out of the mountains or into the villages, high logistics costs have always been a pain point in the industry, and addressing this pain point directly is to leverage more merchants in the ecosystem to join the market and consumption revitalization in remote areas, increase commodity circulation, and stimulate market vitality."

when the platform, merchants and even the entire ecosystem work together, wonderful changes are happening.

tibetan boy tashi donzhu lives in a mountain in langkazi county, shannan city, tibet, with an average altitude of 4,000 meters. in the past, there was no accessible mountain road and it was far away from other towns, making it almost isolated from the outside world. after the central government implemented the tibet aid policy, the road was built to the doorstep, and with the dividends of the e-commerce going to the countryside policy, tashi donzhu's family is living a better and better life. "i now use pinduoduo to buy clothes and medicine for my parents, and even large electrical appliances, which will be delivered to my home by the e-commerce going to the countryside service station, which is much more convenient than before."