[Report] 5G Live Broadcast Makes a Hit for a Rural Chinese Village Coffee... Behind It Is 'Huawei'

Huawei's Reason for Supporting 5G in Remote Mountain Areas
Symbol of US Sanctions on China... Strengthening Image as a Patriotic Company

Flying about four hours from China's capital Beijing to Kunming, the capital of Yunnan Province, then changing flights to travel one hour to Tengchong, and finally driving about 30 minutes to reach Baoshan. Located on the northwest border with Myanmar, with 92% of its area being mountainous and semi-mountainous, Baoshan is home to the coffee company 'Zhongka Cafe.' From the perspective of city dwellers, this place is like a remote mountainous area, but Zhongka Cafe, which originated here, is recently expanding its business mainly through online malls such as 'Zhibo (live streaming),' which is showing the fastest growth in China's e-commerce market.

On the 20th, in the smallest office deep inside the Tengchong headquarters, a live broadcast directly connected to major platforms like Taobao, JD.com, and Pinduoduo was in full swing. During the recently ended shopping festival Double 11, they sold 800,000 coffee products in just two days. In this remote city where even 3G signals are hard to catch, Zhongka Coffee starts its live broadcasts every morning at 8 a.m. via ultra-high-speed 5G networks.

Jungka Cafe is selling Shinroi Coffee through an e-commerce platform. Jungka Cafe sells coffee to individual consumers through a live broadcast every day at 8 a.m. Photo by Hyunjung Kim

A representative from China Mobile explained the 5G technology applied to coffee bean cultivation and data management on the 20th at Xinzai Village, Tengchong, Baoshan, Yunnan. (Photo by Hyunjung Kim)

Digital Management Instead of Daily Farm Visits
Large-scale Management Made Easier, Becoming a 'Coffee Village'

The company focuses on online sales targeting individual consumers rather than dealing with large franchises like Starbucks or Luckin Coffee. The brands sold include three types differentiated by variety and roasting: Zhongka, Xinrui, and Black Diamond. Manager Su Jianche introduced, "Currently, we sell products through online stores on platforms such as Tmall, Taobao, JD.com, Pinduoduo, and Bilibili."

The company's expansion began in 2019 with the transition to automation and the use of online platform markets via 5G networks. The communication network was built through a partnership between China's largest telecommunications equipment company Huawei and the state-owned telecom operator China Mobile. Manager Su emphasized, "Since starting automation in 2019, total sales have surged sharply," adding, "The annual growth rate since then has been over 150%." He stressed, "Network platforms, including real-time live broadcast rooms, are very important," and "It would have been difficult without a strong communication network."

In this coffee bean production area, the automated system enables a daily production capacity of 15 tons of coffee beans. Delivery is done in cooperation with China's comprehensive logistics company SF Express. The integration of digital technology has made it possible to provide virtually real-time ordering and next-day delivery services from this remote rural village in Yunnan.

Baoshan is known as the world's largest Arabica coffee bean cultivation base. Originally famous for various crops such as wasabi, walnuts, and safflower, many farmers have switched their main crops to coffee thanks to the rapid growth of the coffee market, according to local officials. Wang Jiawei, Party Secretary of Xinzaicun Village in Baoshan, emphasized, "The annual total coffee production per capita in this area reaches 4,000 tons," adding, "The village has proactively developed coffee as a major industry and improved convenience through communication technology." According to Secretary Wang, coffee accounts for 90% of the economic value generated in this region.

A farm official explained, "In the past, we had to search for signals everywhere just to send files," adding, "Now, accessing Douyin or WeChat and receiving orders has become very easy, and with soil detection equipment using 5G technology, we can monitor sunlight, rainfall, and wind speed to manage the cultivation environment." He continued, "Young people from the region who graduated from university are returning to their hometowns," emphasizing, "If they can earn 5,000 yuan (about 910,000 KRW) per month in Shenzhen, they can also earn 4,000 to 5,000 yuan in this village, so they think returning home is better."

A massive 5G base station installed in Xinzai Village, Tengchong, Yunnan. (Photo by Kim Hyun-jung)

A coffee bean farm established in Xinzai Village, Tengchong, Yunnan, a mountainous area. (Photo by Hyunjung Kim)

Why Does Huawei Build Base Stations in Rural Areas?
Supporting 'Sustainable Development' and Strengthening Its Image as a Patriotic Company

After Huawei and China Mobile built communication networks in Xinzaicun and the Baoshan area, local incomes increased and private companies like Zhongka Cafe grew. However, at the same time, these companies can acquire village industry data. Standardizing data from cultivation to ordering and sales is also a core part of the Chinese government's rural digitalization initiative. For example, the unique geographical features and climate of Xinzaicun Village, and the resulting changes in production volume, are all digitized. Finding similar climate conditions to develop new farms has also become easier.

The rapid 5G rollout centered on rural areas is also related to corporate expansion. Although China has the largest number of 5G base stations worldwide, smartphone penetration is not very high. According to the Ministry of Industry and Information Technology, as of the end of October, China had 3.215 million 5G base stations. However, in Baoshan, Yunnan Province, fewer than one million of the 2 million total mobile users use 5G devices.

Lei Lei, Director of Huawei's Yunnan Telecommunications Division, stated, "Regional infrastructure is no longer just about roads but about digital infrastructure and, further, the development of digital applications that can actually utilize the information and data generated through it," emphasizing, "We will cooperate with various telecom operator partners to revitalize a village through local agriculture, tourism, and poverty alleviation."

Huawei's mid- to long-term goal is to rise as a 'patriotic company' through such activities. Since the 2018 incident where Meng Wanzhou, daughter of Huawei founder Ren Zhengfei, was arrested and detained by Canadian police under U.S. pressure, Huawei has become a representative company leading China's technological rise in resistance to U.S. pressure. According to global market research firm Counterpoint, Huawei's smartphone sales in the third quarter surged 37% year-on-year, showing the largest improvement among top market share companies during the same period. This success was partly due to the market reception of the 'Mate 60 Pro' smartphone released by Huawei in August, which is equipped with a self-developed 7-nanometer (nm, one billionth of a meter) semiconductor chip.

A source in Beijing explained, "Chinese companies are showing moves to align more than ever with the government's common prosperity policy," adding, "Huawei has also strengthened its identity as a patriotic company in recent years and is engaging in various social marketing and activities."

Tengchong = Correspondent Kim Hyunjung