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BOX 5.11
Emerging but struggling food e-commerce Because of high population densities in urban areas, the East Asia region is well-suited to food delivery services via e-commerce. Large multinational companies, such as Amazon and Walmart, have demonstrated interest in fresh food commerce in the region. Asian e-commerce players could, however, dominate the food delivery business. China has several ongoing initiatives, and Japanese messaging service Line has taken steps into perishable and nonperishable sales and delivery in Southeast Asia. Companies have launched similar businesses in Indonesia, Malaysia, and Thailand (Green 2018). Evidence suggests that e-commerce platforms are being used to connect producers directly to consumers. DHL is currently working with Thailand’s Ministry of Commerce to deploy e-commerce and logistics expertise to connect Thai farmers to e-commerce platforms (Green 2018). China has implemented e-commerce for the agriculture sector (via Taobao.com and Pinduoduo). The government’s Rural E-Commerce Demonstration Program seeks to promote e-commerce in rural areas by establishing and improving rural e-commerce public service, fostering rural e-commerce supply chains, promoting connectivity between agriculture and commerce, and enhancing e-commerce training (World Bank 2019a). The rural e-commerce industry chain covers a range of activities, from the production, processing, storage, and marketing of agriculture products to shipment and after-sales services. In developing e-commerce for agriculture products, the provinces adopted a three-tier service facility system, which consists of county service centers, township service stations, and village service sites. Each service facility performs a different function. Villagers and farmers
can sell their agriculture products, purchase goods online, make online payments, and pick up purchased goods at the service facilities without leaving their respective villages (ADB 2018). E-commerce can potentially be more inclusive of underrepresented groups such as women, small businesses, and rural entrepreneurs. In China, for instance, Alibaba alone is reported to have created 30 million job opportunities, most notably among young people, in rural communities, and for disadvantaged groups (Kathuria et al. 2020). Alibaba’s Taobao Villages have gradually spread inland, and in several cases, migrants have returned home to work in e-commerce—seizing job opportunities that would not have been available in rural areas without online platforms. These developments offer hope that e-commerce can be a powerful instrument for rural vitalization and poverty reduction (World Bank 2019a). However, the food e-commerce sector may take time to develop, especially in connecting with rural areas. Not all food e-commerce initiatives have been successful in Asia—businesses have been closed, sold, or scaled back to focus on a handful of cities or countries (for example, Indonesia and the Philippines) (Green 2018). In China, rural e-commerce has faced a general lack of professional internet-savvy personnel. Thus, farmers’ cooperatives and enterprises usually resort to third-party e-commerce platforms, such as Alibaba, Jingdong, Suning, Taobao, and Tmall, in starting their online businesses. These platforms are observed to tender low profits and maintain prohibitive access conditions (for example, collection of a security deposit upon registration and high fees for marketing activities) (ADB 2018).
persistent and changing dietary challenge. Undernutrition causes illnesses ranging from anemia to cognitive impairment and stunting, hurting both individuals and economies. In Vietnam, vitamin and mineral deficiencies reduce gross domestic product by more than $544 million annually (World Bank, n.d.). Moreover, a multicountry study in Southeast Asia finds that both underweight and obese children had lower IQ (intelligence quotient) scores than healthyweight children (World Bank 2018). In Indonesia, the current prevalence of underweight children, at 19.6 percent, is quite high for a country that achieves economic growth of more than 5 percent per year (IFPRI 2019).
