Why must agricultural product e-commerce start over from scratch?

Recently, several pieces of information about e-commerce have intertwined, prompting me to rethink agricultural product e-commerce.

The first piece of information: recently many media outlets have been reprinting stories about how great American fresh food e-commerce is. After taking a look, it turns out that American e-commerce is strong in its supply chain, not only with low costs but also with high efficiency. Compared with it, domestic fresh food e-commerce instantly becomes a "crude brute," which also shows that our fresh food e-commerce has actually put too much effort into surface-level things, as restless as this society, appearing impatient, and losses are basically inevitable. Now it is indeed time to properly practice internal skills.

The second piece of information: Suning's fresh food supermarket has begun to make a comeback, with a strong momentum to sweep away the earlier O2O gloom. After reading the report, it said that with the help of Suning's strong supply chain, Suning Supermarket has expanded beyond conventional limits, and its profitability is quite good. Thinking back to Suning's difficult transformation in the past two years, it was indeed worrying; now it is suddenly clear, and it can also be considered an exploration of an integration model for online and offline. The lesson is that current traditional enterprise e-commerce places too much emphasis on moving toward e-commerce, forming a one-way e-commerce mindset, which will inevitably drag down traditional offline business; if they counterattack online according to mature offline models, perhaps there will be unexpected results.

The third piece of information: Alibaba and Suning have joined forces, and the two sides hold shares in each other, with a total transaction value of up to 40 billion, shocking the industry for a time. This event basically shows that competition between e-commerce and traditional enterprises has passed the stage of being irreconcilable and has begun deep integration, and has entered the stage of capital alliance; small skirmishes will face more severe real-world tests. After the cooperation, Suning fully launched on Alibaba's platform, moving its mature offline supply chain online in fast-moving consumer goods, directly taking a bite out of the cheese of original online retailers; and Alibaba can also use Suning's huge store system to penetrate offline.

⟦NL> The fourth piece of information: the war of words between writer Liu Liu and JD.com. Because of the deterioration and damage of mangosteens bought online, writer Liu Liu, leveraging tens of millions of fans, made a fuss, forcing JD.com, which was preparing to make a big push in fresh food e-commerce, to deal with an awkward crisis response, while Tiantian Orchard, which had just cooperated with JD.com, was only "collateral damage." From related comments, some felt the female writer may have gone too far, and more industry insiders felt fortunate for the other fresh food e-commerce companies that were not "held accountable" by Liu Liu, because everyone clearly knows that the pain of the fresh food e-commerce supply chain is not a matter of one or two days. Behind JD.com, there are still a large number of new farmers who suffer this pain when entering e-commerce, making it very difficult for them to develop internet agriculture to repay their hometowns.

The fifth piece of information: the debate over whether Yimutian's transaction data is falsified. If viewed according to today's e-commerce statistical standards, Yimutian indeed appears suspicious of inaccurate data; those offline transaction matching data are really hard to say. But everyone can recall history: in the early e-commerce era characterized by transaction matching, was it not just the accumulation of data reported after both parties completed transactions? When e-commerce as a whole has entered a new era, agricultural e-commerce is actually still in its starting stage, again walking the old e-commerce road of more than ten years ago, like the primary stage of socialism, probably difficult to leap over. Of course, Yimutian indeed has the responsibility to verify the accuracy of entered data, because without e-commerce transactions tied to payment, logistics, and so on, the arbitrariness of data reporting is unavoidable; let alone that current e-commerce order brushing is still criticized within the industry. Most fundamentally, Yimutian is waging war on a backward small-scale agricultural production system, trying to fully connect the small-production information of millions of farming households with the big market. Several thousand employees are not enough; perhaps an army of one hundred thousand would have some effect, but is this something an internet company should do? It is more like a government public service! Therefore, in my heart I do not want Yimutian to fall. Their courage is admirable; agriculture needs this kind of B2B e-commerce, and the government needs it too, but they need to pay attention to adjusting strategy, starting from easy to difficult, starting first with scaled small B and large C, starting from key industries, step by step, rather than galloping along the venture capital line. Otherwise, agriculture will only say with a dark face, "This concubine cannot do it!" How many bloody lessons prove that the internet scripture of "only speed cannot be broken" does not work for agriculture.

The three major pain points of agricultural product e-commerce

Synthesizing the above information and combining it with the long-circulating report that "none of the four thousand agricultural product e-commerce companies is profitable" triggers a thought in me: is agricultural product e-commerce falling into a mistaken zone that is difficult to escape? That is, in the process of quickly following general commodity e-commerce, it has lost itself. For example, within the agricultural product e-commerce industry, especially fresh food e-commerce, there is broad agreement on four paths: localization, communitization, O2O, and branding, but the specific implementation models are quite difficult, and there is still a lack of very strong successful cases. Instead, a group of enterprises that first explored fresh food O2O unfortunately became "martyrs."

If we analyze further, we can find that agricultural product e-commerce has three major pain points.

First, agricultural product e-commerce burst into e-commerce like Cheng Yaojin charging out from the middle of the road, but its e-commerce foundation is not solid. If we look at the development process of Chinese e-commerce from the perspective of content, it has roughly gone through a transaction matching stage mainly based on commodity information matching, a direct commodity transaction stage supported by payment and logistics, and is currently entering a new e-commerce economy stage of comprehensive financial penetration, deep integration of the industrial chain, and accelerated online-offline integration; if we look at the development process of Chinese e-commerce from the perspective of formal evolution, it has roughly gone through several stages: B2B rising first, C2C emerging suddenly, and B2C blossoming everywhere. Up to now, these three major forms have begun to integrate. Many e-commerce enterprises present a mixed-business operating state, with both B2B and B2C; some individual entrepreneurs have also started from C2C and then cut into B2C; now there is even a trend toward evolution to C2B. Agricultural product e-commerce, however, basically began rapid development with 2009 as the outbreak point. It was passively brought in after the development of e-commerce as a whole entered a mature stage. It basically did not experience the transaction matching stage mainly based on commodity information matching, and directly entered the direct commodity transaction stage supported by payment and logistics; nor did it go through the B2B stage of general industrial products, but directly entered the highly competitive online retail market. Whether B2C or C2C, it is simply imitating existing general commodity e-commerce. Essentially, general commodity e-commerce and agricultural product e-commerce are hugely different. The current e-commerce model was not specially invented for agricultural products, and in some places it is even not applicable to agricultural products. This "halfway intrusion" of agricultural products also clearly shows insufficient preparation in ideology, business philosophy, talent reserves, and industrial supporting facilities, bringing many problems of being unclear, unadapted, unable, and indifferent.

Second, agricultural product e-commerce rushed into the e-commerce market ahead of time like a movie that has not completed post-production editing but is rushing for a prime-time release, yet its production foundation is not solid. Current general commodity e-commerce has long passed the stage of standardized production and begun to enter the stage of personalized customization and flexible production. Small-volume, multiple-batch, and have become the production foundation of e-commerce. However, agricultural products have special characteristics completely different from general industrial products. It is not only impossible to fully achieve product standardization as in industrialization, but they also face the severe reality of a fragmented industrial chain and an immature supply chain. How many fresh food e-commerce companies have fallen on this weak spot! It can be said that problems arising in agricultural product e-commerce are normal; it would be abnormal if there were no problems. Therefore, applying the "asset-light" model of general e-commerce simply cannot work in agricultural product e-commerce. Non-standardization in production and an unsound quality traceability system often lead to one result: as long as there are large batch orders, they generally must also be accompanied by a large number of bad reviews and returns. Conventional logistics and warehousing are also not suitable for agricultural products, especially in fresh food e-commerce. Its harsh requirements in heat preservation, moisture preservation, packaging, and transportation are no longer a simple technical problem; they also require technological innovation and process reengineering, becoming a complex new systemic project. How many e-commerce enterprises have fallen on the journey of exploration because of this.

Third, agricultural product e-commerce kills into the e-commerce battlefield like a soldier with no name and no unit number going into battle bare-handed, making it impossible to recognize who is who, and the foundation for branding is very unstable. It must be admitted that brand building for agricultural products has already achieved obvious results. For example, a group of regional public brands represented by geographical indication products has emerged. Consumers know that for crabs they should eat those from Yangcheng Lake, for apples they should eat those from Shaanxi, for navel oranges they should eat those from Gannan, and so on. But overall, the progress of agricultural product branding is obviously lagging behind that of general industrial products. When we can fluently recite mature market brands such as the major brands of white goods and how many strong clothing brands there are, agricultural product brands really pale by comparison. The ones we can name, such as Yili and Mengniu in dairy, Sanquan and Si Nian in frozen foods, Shuanghui and Yurun in meat products, and so on, are actually brands of the food industry; in the truly primary agricultural product field, especially in the fresh food field, regional brands exist, but market brands led by enterprises are scarce. For example, if we want to eat Shaanxi apples, we do not know which company supplies authentic Shaanxi apples, let alone things like "bath crabs" and "advanced-study chickens." In the intermediate stage of e-commerce development, in order to adapt to the demand for branded consumption, a large number of "Taobao brands" emerged, with the typical representative being Handu Yishe; but agricultural product e-commerce today has neither large offline brands nor online "Taobao brands," leaving only homogeneous low-price vicious competition among white-label products. Cultivating large brands offline for agricultural products can be described as a heavy burden and a long road, while developing "Taobao brands" online can be described as a journey of ten thousand li just beginning.