In Depth: The Alibaba IPO

Inside a Taobao village

How Alibaba helped this man out of poverty

If you want to know why the Chinese government is keen on e-commerce giant Alibaba, look no further than Beishan – one of China's many "Taobao" villages – farming communities transformed thanks to new job opportunities created by Alibaba's consumer-to-consumer site of the same name.

For years, the town was called "clay oven bread" village due to its long baking tradition. However, everything changed when e-commerce giant Alibaba was introduced.

Entrepreneur Lv Zhenhong used to sell sesame buns, earning $8,000 a year. Today his company BSWolf generates $8 million in annual sales of outdoor gear. His $16 sleeping bags are a best seller on Taobao.

Read MoreMaking sense of Alibaba's shopping spree

"One out of every three sleeping bags sold on Taobao is ours," he said at his office. "Our goal is to become the number one outdoor equipment brand in the world."

Many of the villagers in Beishan are proud of Lv's achievements and aspirations. Nearly one fifth of the 2,300 families have traded in hoes for computers to set up Taobao shops.

Lv started in 2006. He was hawking snacks and other goods, when he heard that people in a nearby village were selling products to Chinese customers far away using Taobao. He decided to open an online shop. He set up in a 100 square foot room that he shared with his brother.

Read MoreAlibaba lone bright spot in Yahoo's dark decade

"Some people from our village saw us and would think, 'How odd. These brothers are always working till late every day. What are they up to? In the first three months of opening a Taobao store, we had no business but we kept on working and didn't give up," Lv said.

Mark Ralston | AFP | Getty Images

He started by taking orders for goods from nearby factories and later looked for more companies to cooperate with but was rejected. After his brother suggested that Lv create his own brand, Lv decided to produce camping gear and named the company after his village Beishan - or BSWolf. BSWolf now ships 1,000 packages a day to consumers all over China.

As Lv's business was taking off, other villagers began to approach him.

Read More

"One of my friends here asked me, 'What if I learned to sell on Taobao as well? We were all farmers. He couldn't even type. So while making his sesame buns, he would go to an internet café and pay 25 cents an hour to learn how to type. He bought a computer and asked me what he should sell," Lv explained.

Lv advised his friend to look for products at the local factories, to post photos and wait for orders before shipping them. Before long the former farmers were buying motorbikes, cars, and homes - and asking Lv for more advice. Lv now organizes training courses with instructors who work with Alibaba's Taobao University.

Lv Linyou was a student of the BSWolf founder.

Read MoreAlibaba draws interest from Tepper, Loeb, Cooperman

Lv suffers from muscular dystrophy. In a country where disabled people are regularly passed up for schooling and jobs, Lv spent most of his days playing cards while his widowed mother worked in construction and took odd jobs to support him and his brother.

"When BS Wolf started, I asked around to see if I could also take part. I had a computer. My brother bought it for me to play games," he said. "The company told me if I came across something I didn't understand then I could ask for help and get training. So I told them I would give it a try."

He sells BSWolf camping gear from his own online shop on Taobao. His mother helps by picking up the orders from BSWolf's factory.

Read MoreIs Alibaba's $162.7B valuation 'too conservative'?

Lv Linyou says Alibaba was their ticket out of poverty.

Before opening his online shop, he says his mother earned hundreds of dollars a year. Now, they earn over $8,000.

"I used to ask my mother for money," he said. "Now she spends mine."