The scorching summer sun beats down on Qingzhou, Shandong, where two fertilizer business owners are busy hiring. They are recruiting mostly female workers from surrounding villages—with the men away for migrant work, these women seek employment close to home while managing their households.
At Chen Kaiqi's company, the phone rings incessantly with inquiries, requiring more customer service staff to patiently explain scientific fertilization methods to farmers across the country. In Wan Zhiqiang's new workshop, production lines hum continuously as barrels of fertilizer roll off conveyor belts, ready for loading and shipment. "Our job openings are mainly for machinery maintenance, bagging, and barrel filling—none are heavy manual labor. Employees can earn several thousand yuan a month, which is quite decent locally," Wan Zhiqiang says. "We plan to expand hiring further."
The hiring surge is driven by booming order volumes. The customer base for Chen Kaiqi's Huanneng Fertilizer and Wan Zhiqiang's Nongyike Fertilizer is similar: 80% of PDD Holdings Inc (PDD) orders for the former come from individual farmers, while 80% of the latter's orders are from "retail buyers" who purchase just one or two barrels at a time online.
Agricultural supplies like fertilizers are essential for farming, representing a significant portion of annual production costs for rural households. However, these needs have long been hindered by the "last few kilometers": a barrel of fertilizer can weigh dozens of kilograms, making shipping costs for one or two barrels prohibitively high. In many remote villages, parcels could only be delivered to townships, not into the villages themselves.
But since late last year, with PDD Holdings Inc (PDD) piloting a "free village delivery" service under its "100 Billion Support" initiative, the online shopping experience for agricultural supplies like fertilizer has improved significantly. In pilot areas, farmers can place group orders on their phones and receive large barrels of fertilizer at their village entrance days later, eliminating the hassle of transporting bulky packages from the township.
This improved shopping experience is unlocking rural consumption potential. Agricultural supply manufacturers are also leveraging this opportunity to break through geographical barriers, expanding their markets to more remote villages, leading to simultaneous growth in production capacity, scale, and employment.
The Challenge of Delivering Agricultural Supplies Online
Chen Kaiqi, 35, is energetic and articulate—skills honed during his previous role as a rural credit union client manager. In 2013, when a relative's fertilizer factory was up for transfer, he spent six months researching before resigning to dive into the agricultural supplies industry.
"For small and medium-sized enterprises like ours, the easy route is selling to large bases and distributors, shipping truckloads at a time," Chen Kaiqi says. "But I wanted to focus on individual farmers."
As a client manager, he observed that for most rural families, few annual expenses consistently reach three to five thousand yuan, with fertilizer being a major one. If they could only buy fertilizer from township agricultural supply stores at prices 50% or even double the factory price, farming profits would be significantly slimmer.
Chen Kaiqi did the math. A barrel of fertilizer sold from the factory yields a profit margin of about 10%–15% for the manufacturer. After markups by provincial agents, county-level wholesalers, and township retailers, a barrel costing around 70 yuan could end up priced at 120 yuan or more for the farmer.
To streamline the supply chain, he turned to e-commerce. In 2020, after opening a store on PDD Holdings Inc (PDD), he quickly realized the platform's users were the very "retail buyers" with a rigid demand for quality fertilizer he aimed to serve.
The vision was promising, but new challenges emerged. "A barrel of fertilizer weighs 20 kilograms. Back then, courier companies had no policies for such large items," Chen recalls clearly. When starting online sales in 2020, the difficulty wasn't selling but shipping. Couriers couldn't handle large items, forcing the company to use logistics services, which only delivered to cities or county towns, still dozens of kilometers from farmers' doorsteps.
This was not an isolated case. In Qingzhou, a major domestic production base for water-soluble and new-type fertilizers, logistics once hindered the development of agricultural e-commerce. "We sell a barrel of fertilizer for just over 70 yuan, but it weighs 20 kg. Previously, shipping to six western provinces could cost up to 100 yuan," says Wan Zhiqiang, responsible for e-commerce at the local Nongyike Company, which has produced fertilizer for over 20 years. While online sales have risen yearly since 2019, a major obstacle remained—orders from remote areas like Qinghai and Gansu incurred shipping costs higher than the product value, making business unsustainable. "Unless we had enough volume for full truckload logistics, we couldn't accept retail orders."
"We accepted retail orders and promised delivery to the village, so we had to deliver," Chen Kaiqi says. He tried building his own village delivery system, personally covering the cost of arranging separate vehicles to transport orders from the county logistics hub to individual villages. "At the time, delivering to a village 30 km from the county town cost about 100 yuan. For 50–60 km, it rose to 200–300 yuan, all borne by us manufacturers."
Increased transport costs sometimes led to losses. "Before shipping, I'd have customer service calculate the profit and cost per order. For some loyal customers, we had to deliver even if it meant losing money—a promise is a promise," Chen states.
Village Delivery Unlocks Markets and Cuts Costs
Change began in 2022. Since then, benefiting from PDD Holdings Inc (PDD)'s preferential policies like segmented transportation and waived transfer fees for remote western regions like Qinghai, platform merchants could first send westbound parcels to transit warehouses in cities like Xi'an and Chengdu. The platform then handles the second leg of transportation, fully covering the transfer costs.
This shift showed Chen Kaiqi the potential to expand agricultural e-commerce. The further breakthrough came with PDD Holdings Inc (PDD)'s pilot "free village delivery" service launched late last year. In covered areas, parcels previously limited to township delivery can now reach villages directly.
"Before, when we handled village delivery ourselves, costs remained high. Now the platform covers these expenses, reducing our burden and pressure," Chen explains.
Wan Zhiqiang shares this sentiment. After the "e-commerce westward" policy took effect, they gained the ability to offer free shipping to farmers in these regions. This fulfillment upgrade quickly spurred order growth.
"Recently, the implementation of the 'free village delivery' service has triggered similar positive effects. In some remote southwestern areas, order volume has increased by 30% to 40%," Wan notes.
Chen Kaiqi estimates his store's sales conversion rate has recently surged by 70%–80%. In just one pilot region, Guangxi, the company now sells about 50 more orders daily than before. With an average order value of 150 yuan and an eight-month sales period, the "free village delivery" initiative could generate an additional 1 to 2 million yuan in sales.
It is understood that many areas in Guangxi have developed fruit cultivation, mainly sugarcane and citrus. However, mountainous terrain previously hindered parcel delivery to villages. The inconvenience of pick-up discouraged farmers from buying fertilizer online. The pilot of PDD Holdings Inc (PDD)'s "free village delivery" service has now unleashed this pent-up demand.
"We make fertilizer for farmers, and farmers are in the villages, as is the land. Opening up village logistics is like pushing open the final door to the market," Chen says. As products reach more customers, brand reputation has grown, with current online store repurchase rates at 30%–40%. "Many customers start with one product, gradually expand to over ten, and eventually use our entire fertilizer system."
"Previously, constrained by logistics, we weren't sure about sustained growth. Now, with a more stable market, we have the confidence to expand production," Wan states. The improving logistics network empowered Nongyike to invest in long-term development. Last year, they launched a self-operated production factory spanning over 5,000 square meters, adding three liquid and three powder production lines, tripling daily shipment volume. This year, they built a new laboratory to offer soil testing services for clients in specific regions and adjust fertilizer formulas based on results.
"We have 20 mu of experimental fields. A fertilizer undergoes at least one full planting cycle from R&D to launch. Next, we aim to combine this data with actual soil conditions from farmers' fields to create more precise products," Wan explains. This plan's feasibility hinges on stable delivery to remote customers and reliable feedback. Without smooth logistics, it would be impossible.
Chen Kaiqi has similar ideas. He is already experimenting with product optimization for different provinces: strongly acidic fertilizer for saline-alkali soil in Inner Mongolia, neutral fertilizer to balance pH in the acidic soil of Yunnan, Sichuan, and Guizhou.
"E-commerce serves farmers nationwide. Soils differ, crops differ—nightshades are different from fruit trees, leafy greens are different from nightshades. Previously, we didn't dare create targeted products, only broad-spectrum ones. But now, we want to give it a try," Chen says.
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