From a remote Sichuan village, blockchain technology is helping rural farmers sell tea in a post-Covid world
By placing the entire stage of the production process on a blockchain platform provided by Ant Group, prospective buyers could ensure the authenticity of tea from farmers in Dazhu county, boosting sales even amid the pandemic
As the Covid-19 pandemic unfolded in China, like many small businessmen across the country, Liao Hongjun worried about how his white tea sales could be hurt.
Liao, hailing from a village in Dazhu county in western Sichuan Province, started his tea growing business in 2011 with 2,000 white tea seedlings. Business was good, and his white tea fields grew to over 10,000 acres.
In better days, Liao’s devoted customers would travel to the county to inspect the year’s harvest before placing their orders. But as with many people around the world during the Covid-10 shutdown, his customers were now forced to stay home.
Devoted tea aficionados often prefer to buy the end product in person as they like to keep tabs on the tea’s provenance, its quality, and date of harvest.
Not only did the pandemic cause demand to drop significantly, but the impact was felt by the other local farmers who became unmotivated to harvest the tea. With more than 3,600 farmers in Dazhu county relying on tea for their livelihood, the outlook was grim.
“The optimal period for harvesting white tea is only one month. We were looking at fifty thousand acres of tea sitting right there. We were under immense pressure,” said Liao.
“Usually during this tea harvesting period (starting in March), we would have completed 60% of orders, but we had only managed to complete 10% of our orders for the year,” Liao said.
At this crucial time, blockchain technology was able to rescue one of China’s oldest and most culturally significant industries.
By using Internet of Things (IoT) sensors, a digital link was established across the entire tea production process, covering end-to-end provenance traceability from the farmer, all the way to the purchaser.
Implementing this was a feat, as tea production involves many stages such as plantation, harvesting, rolling, drying, sorting, through to packaging and delivery.
With blockchain, each stage would now be represented by a hash value, which is recorded in the system and cannot be altered.
Zhejiang Kezhou Digital, a blockchain application developer that serves small and micro businesses, worked with the white tea farmers in Dazhu county to develop the process. It then helped the farmers place their products on Ant Group’s blockchain platform.
“After our industry adopted Ant’s blockchain platform, I felt as though the gap between Jack Ma and I had become smaller,” said Liao jokingly after he had completed an order for 660 kilos of tea.
By achieving full transparency across the entire supply chain, buyers from all over China could instantly download the status of the Dazhu tea they purchased, or are interested in purchasing, simply by scanning a QR code on their phone using the Alipay app.
Dazhu white tea has become even more popular thanks to blockchain technology. According to Liao, sales for the month of April were not affected by the outbreak, but instead surged significantly in comparison to the previous year, exceeding RMB 100 million (USD 14 million).
In 2017, Dazhu’s annual white tea harvest achieved 12,000 kilos and RMB 40 million in revenue.
“This year Dazhu county harvested around 30,000 kilos of tea, which is worth about RMB 100 million. By leveraging online retail, our products can be ordered and delivered right to our customer’s doorstep across Beijing, Anhui, Zhejiang, Qinghai and Gansu,” said Liao.
Blockchain has the potential to benefit both small and micro enterprises, but many lack the funds or capabilities to access the technology.
To help bridge the gap and help digitize e-commerce, Ant Group in April launched OpenChain, a new blockchain platform that aims to provide developers and organizations access to its proprietary consortium of blockchain technologies.
OpenChain is meant to enable small businesses to deploy smart contracts and decentralized apps with greater efficiency and lower cost, as little as RMB 100 (around USD 15) per month.
Undoubtedly, COVID-19 has changed the way businesses operate and their reliance on digital technology.
It has also compelled some sectors to make the leap and accelerate change.
Dazhu’s white tea industry has been ushered into the digital economy with the help of blockchain technology, making its future an even brighter one.
For more stories and news about Alipay, follow us on Facebook, Twitter, LinkedIn and Instagram.
