A PC for peasant farmers? China targets digital divide.
China's computermakers tap vast rural market with simple tools and local officials' support.
| Langfang, China
Visitors to the annual agricultural fair here this week were treated to something more than the corn harvesters and feedstuff pulverizers that usually grace such events.
They got to gawk at an item that its makers hope will become the Chinese peasant's next must-have piece of agricultural machinery: a $199 computer.
Lenovo, the world's third-largest computermaker and China's best-known global brand, chose this northeastern town to launch its assault on the growth frontier for PC sales – villagers in developing countries – and start bridging the digital divide between urban and rural citizens.
To tempt farmers into high-tech territory, Lenovo executives explain, they have tried to make their machine easy to use, cheap, and robust. But its key feature, they say, is its software, dubbed "Road to Riches," that helps peasants search for agricultural information that will boost business.
Wang Shunxiang, a fungus grower and the first customer to buy the computer, thinks he can see the potential.
. "If this helps me know more about market prices and find more dealers to sell to … it won't take me more than a few days to make back the money I am spending," he predicts.
Lenovo's President for Greater China, Chen Shaopeng, sees profit in the "Tianfu" (Heavenly Prosperity) model too, as he eyes 250 million households in the Chinese hinterland. "The rural market in China is huge," he points out, "and computer penetration is practically zero. This is a totally new market to be explored."
That novelty brings challenges: Electricity supplies are not always reliable in the Chinese countryside, phone lines reach only 47 per cent of rural homes according to government statistics, and even $199 is beyond the means of millions of peasants.
Lenovo's new product will also be competing with another low priced PC just launched by another Chinese producer, Haier. "These are very much early days," cautions Wang Jiping, an analyst with the US research company IDC. "They are still at the investment and ground-laying stage."
Still, the trend is there. While only 0.3 per cent of China's 162 million Internet users live in the countryside, their numbers are doubling every six months, according to the officialChina Internet Network Information Center.
Lenovo's ambitions to tap this trend take the shape of a chocolate-box-sized computer that plugs into a TV screen, controlled by a touchpad keyboard and buttons laid out like a remote control.
Using the machine is more like watching television – a familiar experience for most Chinese peasants – than sitting in front of a computer.
Simple controls take the user around a range of functions from online education and entertainment services to agricultural information portals, and also allows him to choose specific sites or send e-mails and instant messages.
The computer uses flash memory instead of a hard disk. Indeed there are no moving rotating parts, such as a fan or a DVD player, that might break down in rugged conditions.
But company executives are pinning their hopes on the software – specifically tailored to peasant farmers' needs – to attract customers.
"In cities, people consume at home and produce at the office, so you have two different IT markets," says Wang Nan, Lenovo's head of new business development. "Farmers are not just consumers … and if you treat them like urban consumers you miss something. They are willing to spend money to increase their production."
So the "Road to Riches" suite offers easy one-button access to websites that provide information on crop raising, animal disease control, market prices, distribution networks, and other topics of interest to farmers.
Much of that information comes from government sources, and Lenovo has worked closely with the Chinese authorities in developing and launching its new product.
"The ability of Lenovo's countryside strategy to open up and enter deep into new markets also depends heavily upon support from local governments at all levels," explains a company publicity document.
"We hope local governments will improve the IT infrastructure and help find the right providers of agricultural information," says Mr. Chen. "If they can do that we can bring PCs to the villages and people will see the benefits."
Lenovo is especially dependent on the state-owned telecom companies to extend phone coverage, without which ADSL Internet access is impossible. "They are expanding into the countryside very fast and we will work with the telecom operators," says Chen. "Wherever they reach, we will reach there together."
The company also sees local governments as prime sales targets, and is currently negotiating the sale of 600,000 units to be distributed through the Chinese government's poverty alleviation program, according to Wang Nan.
Close cooperation between Lenovo and the government serves the interests of both sides, analysts say. The company reaches customers and can boast of fulfilling its corporate social responsibility by narrowing the digital divide between town and country, while "the government achieves its goal of disseminating high technology" more broadly, says Wang Jiping.
Just how much demand there is for this technology, however, remains to be seen. Lenovo is busy creating a market, through roadshows and educational advertising. How far they have to go was evident at the agricultural fair, where many peasants stopped by Lenovo's stand, but few actually took the keyboard into their own hands.
"It looks easy enough to use, but I'm afraid I'd break it," said Tang Shisheng, a dairy farmer, as he watched salesmen take the "Heavenly Prosperity" through its paces. "I've never really used a computer."
Yao Zhenghai, who grows corn and fruit, was more adventurous. Even though he had trouble figuring out how the keyboard worked, he thought he could master it eventually, and signed up to buy one of the first of the new computers when they start rolling off the assembly line next month.
"Even if I'm a peasant, I need to know what's going on in the world, and this will keep me in touch," he said, as he jabbed at the keyboard with a stylus. "Maybe this will help me find out what kind of crops I could grow to earn more money."