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By rights, Chuanjun Liu should never have been born. His parents were peasant farmers in Shandong province, south of Beijing, and they already had a boy and a girl when his mother fell pregnant again 35 years ago. Forced to hide from bureaucrats policing the one-child policy, she moved from village to village until the regulators caught up with her and took her to an abortion clinic. "She was forced to have an abortion, and right before the procedure she went into labour and gave birth to me - premature at six or seven months," Liu says over dinner in Beijing. "I've always known that if I don't make the most of my life, it would all have been a waste." His parents paid a 1,000 RMB (£106) fine - and Liu grew up knowing he would be an agent of change. "I went home in 2015 for National Day, and saw corn was still at 90 cents for 500g - the same as ten years ago. Yet the cost to grow the corn has risen. I've seen so much that needs to be changed," he says. "With the internet comes a spirit of democracy. Technology can be a solution to make society better."
Liu started making this change more than a year earlier: in June 2014, he launched an app to connect farmers to restaurants using low-cost smartphones. In a year it scaled to a $1bn valuation and employed more than 9,000 people. The business, Meicai (meaning "buy vegetables"), aggregates supply and demand, buys in bulk, and distributes field-fresh food so that it reaches diners' plates within 12 to 18 hours.
It frees farmers from the early-morning trek to their local market and gives chefs certainty about their supplies. "It's win-win - farmers get higher wages, and restaurants cut their costs," he says. "And we can predict demand to inform the farms how much to grow." In August 2014, monthly turnover was 80,000 RMB (£8,500) with Meicai in 18 cities; by December 2015, with smartphone penetration at almost 50 per cent, turnover was 400m RMB (£42m) a month, and Meicai had 5,000 full-time staff and 4,000 more freelance drivers. It will enter its 100th city in 2016. "Every morning we send out 4,000 cars and minivans from 7am to 10am, all outsourced, operating a military model," Liu, 34, says. "Drivers can rise up to sergeant, general or lieutenant, based on their punctuality, customer reviews and retention rates. It's the lowest-cost, lowest-risk and best way to scale quickly - we studied Uber and Didi Dache. And the drivers, mostly from rural areas, get stable wages for the first time - averaging 8,000 RMB (£850) a month. They also have better status, working for a VC-backed company, and can spend the rest of the day working for themselves."
Within a year he'd raised $170m from investors including Blue Lake Capital, ZhenFund, Xiaomi and Shunwei Capital's Lei Jun, H Capital and George Soros's Quantum Fund.
Liu studied rocketry and astronomy at university, and a year after graduating in 2008 he co-founded his first company, selling high-quality organic food. That failed after six months "because there wasn't enough trust". He then launched a group-buying website, which he sold in 2013. After that, he travelled to seven provinces to study Chinese farming in depth. He calculated that, between restaurant and farm, seven layers of middlemen extracted up to 90 per cent of the crops' value. For example, for 500g of potatoes, sold in restaurants for $12, a farmer could expect to be paid 21 cents.
His family still farms 1.6 hectares, and when Liu returns home he joins in tending the fields. "I have a deep passion for the land," he says. "Innovation comes from being obsessed with a problem for a long time, trying to solve it every step of the way.
WIRED suggests that finally an app is achieving the collectivisation of Chinese agriculture that almost broke Chairman Mao. Liu smiles. "There are still many sectors in China where inefficiencies can be addressed by entrepreneurs," he says. "We have more than ten million small and medium-sized restaurants in China - the potential market is in the trillions." Others are noticing too. "A company in the US called GrubMarket just copied our model," he says.
This article was originally published by WIRED UK
