I stopped my car to walk into this small grocery shop near the roadside to buy some bottled water. This was in the countryside in Eastern China, about 3.5 hours drive out of Shanghai.

The shop was derelict – with dust covering both shelves and the goods on them. Selection is poor – my aunt, who was travelling with me and had gone through this route many times since 1990s, said the shopkeeper (and probably the owner) had been there for as long as she could remember.  

Shops like this still exist in China, even in some of the affluent regions

This is the type of existence that never gets reported outside China nowadays – you only hear about record-breaking skyscrapers, ambitious overseas acquisitions and perhaps air pollution – another sign of fast modernisation.

Yes they do exist

“Do you accept WeChat?” I asked. Well, all the cities I have been to recently in China function on Alipay or WeChat – you do not have to carry a wallet with you.

“Of course we do,” the shopkeeper responded. She quickly took out her phone and displayed the QR code. Two seconds – payment was done and the three bottles of water were mine.

Then I went a bit extra curious. “Did WeChat send people to teach you how to use it?” I asked, wanting to know what prompted her to accept WeChat.

The answer was good. The lady told me, in fact, her suppliers had asked her to pay them using WeChat, and of course, to have money in her WeChat to pay. It was natural for her to accept WeChat payment from her customers. 

“Besides I buy stuff on Taobao as you probably do,” she added. “So you can also pay me using Alipay if you wish.”

I need to buy my dough and cooking oil using WeChat payment

Two days later, I bought something from an Amway (the American direct sales company that is very successful in China) sales agent. Paid with WeChat as well – she said the same thing, that she needed to pay her suppliers in WeChat.

She could not re-imagine the days of doing bank transfers or asking someone to pass the cash.

These ‘impossible’ days were barely less than 5 years ago.

There is a momentum of anything sweeping, and a tipping point beyond which the wave will be pushing people along.

At this stage, WeChat and Alipay are well entrenched in people’s payment habits that they will push others in their payment chains to use these two platforms – a virtuous circle indeed.

Just like when all your friends are using Whatsapp, you would feel obliged to use it as well.

Future of rural retail?

Oh yes – probably the village shop in its current form will not last for long. Alibaba, JD.com and Suning – China’s ecommerce giants – are all aiming to reform rural retail.

Taobao aims to rule the countryside as well

However, the owner probably should not worry about losing her job. Ultimately you still need rural agents to man the new retail outlets, whatever form factor they might be in.

 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.