Rural E-Commerce and Emerging Paths Toward Product Renewal: Evidence from Taobao Villages in Zhejiang Province, China

The role of extraregional linkages established by e-commerce in stimulating industrial renewal has yet to be sufficiently explored. We propose a framework that specifies the renewal of product as improvement in quality and the increase in the types of products, and understands product renewal as conditioned by the strength of extraregional linkages and the local capacity. Drawing on the original survey data on 241 Taobao villages in Zhejiang Province, a multinomial logit model is used to explore the factors influencing product renewal. We find that the improvement to production processes and merchants' management capabilities significantly contributes to product renewal, whereas the development of logistic industries and the establishment of e-commerce associations accomplishes the opposite. The authors argue that more attention should be paid to improve institutionalization of the Taobao business model to support the upgrading and renewal of local industries, such as improving local government recognition of e-commerce and popularizing e-commerce associations to a wider area.