How Can Internet Plus Agriculture Dance in the Wind

“Now, besides our own fields, our family has contracted some additional land and grows safe, pollution-free red beans, corn, and so on. Anyway, there is no worry about selling them, and my parents are very happy doing it.” Xiao Chu, a young woman from Anhui who works in Beijing, told the Science and Technology Daily reporter that she had never imagined her family could actually make money by selling agricultural products. And this is mainly thanks to the Internet.

In the “Internet Plus” strategic layout, “Internet Plus Agriculture” is a major hotspot. Data shows that in 2014, national rural e-commerce sales already exceeded 140 billion, and the number of rural online stores registered on the Taobao and Tmall platforms alone exceeded 1.6 million. By 2016, China's total rural online shopping market may break through 460 billion yuan, and in 10 or 20 years, the rural online shopping market may surpass the cities.

Sowing the seeds of the Internet on the fertile soil of agriculture, what exactly will be harvested? How will the Internet change the form of agriculture? At the recently held “Decoding Internet Agriculture and the Summit Forum on Agricultural Product Safety Driven by Science and Technology,” experts expressed their own views around these questions.

⟦NL> Internet giants enter agriculture one after another

Recently, Yunnongchang Group, which received a strategic investment of tens of millions of US dollars from Legend Holdings, signed a strategic cooperation agreement with the Fengxian County People's Government of Jiangsu and JD Group. Founded in August 2013, Yunnongchang has 18 subsidiaries and is a comprehensive high-tech agricultural Internet service provider integrating agricultural input e-commerce, customized agricultural product trading, rural logistics, agricultural technical services, and rural finance.

In fact, agriculture has become an important market favored by Internet giants and capital. Previously, Alibaba and JD both announced the full-speed launch of rural e-commerce strategies. Alibaba launched the Rural Taobao Thousand Counties and Ten Thousand Villages Plan. In the next 3 to 5 years, it will invest 10 billion yuan to establish 1,000 county-level e-commerce service centers and 100,000 village-level service stations across the country, covering one third of the country's counties and one sixth of rural areas. Moreover, Alibaba is also laying out an industrial chain model of deep integration between the Internet and agriculture, planning to base rural e-commerce development on its entire ecosystem. Businesses such as Alipay, Yu'ebao, Zhaocaibao, and Ant Microcredit are all already linked to rural areas. In the future, big data will be used to directly enter the rural financial market to meet farmers' funding needs.

JD has also launched the recruitment of “rural agents” and the rollout of “JD Help Service Stores,” exploring a two-way circulation model for the rural market. The once hotly discussed “JD sends seeds to the countryside” activity is exactly this: JD provides high-quality seeds for agricultural products, farmers cultivate and plant them in rural areas, and after harvest they are sold through the JD platform. JD is now also beginning to enter the agricultural input market. If this industrial chain layout can take shape, it will bring transformation to agricultural production: farmers will only be responsible for production, and other links will be handed over to the platform.

The rapid development of rural informatization has laid the foundation for “Internet Plus Agriculture.” By the end of 2014, China's rural Internet users reached 178 million. The rural Internet penetration rate grew rapidly from just over 10% in 2008 to nearly 30% by the end of 2014. With the continuous improvement of informatization infrastructure, the spread of the Internet in rural areas has been accelerating, and the convenience of obtaining information in rural areas has greatly improved.

“In the past, production was done household by household, and it was difficult to promote new technologies on a large scale. Now China has about 900,000 family farms, which is conducive to the development of new technologies such as informatization,” said Zhao Chunjiang, director of the National Engineering Research Center for Agricultural Informatization.

Agricultural e-commerce development faces a bottleneck

Yantai apples, Dangshan pears, fresh hairy crabs…… almost everything you want to eat can now be bought online. Indeed, at present the main business format of China's “Internet Plus Agriculture” is still e-commerce. According to estimates by relevant institutions, in China the market scale of just three types of agricultural inputs, chemical fertilizers, seeds, and feed, exceeds one trillion yuan.

Xiong Bin, co-founder of Yunnongchang, said: “Since the beginning of last year, more and more enterprises have begun to enter the field of ‘Internet Plus Agriculture.’ In addition to agricultural products, some agricultural input enterprises have also expanded their services from offline to online based on their original channels and resources.”

High quality and relatively favorable prices obtained by removing intermediate links are the main reasons agricultural product e-commerce platforms attract users. However, as Yimutian, whose main model was “helping farmers sell agricultural products and helping buyers find sources of goods,” was exposed for problems such as a “broken capital chain,” “mass layoffs,” “investor withdrawal,” and “falsified transaction data,” agricultural e-commerce under the traditional Internet model fell into a public opinion crisis.

Some experts analyze that the problem lies in the fact that agricultural products are non-standard goods. For channel merchants, procurement still needs to be carried out on-site offline, and procedures such as sampling and inspection cannot be transferred online. At the same time, the docking model of traditional bulk channels is merely a migration from offline to online, with no fundamental change.

At the same time, Zhang Yaowen, senior partner of Analysys commercial solutions, believes that the still lagging development of China's rural circulation industry is also an important reason restricting the development of agricultural e-commerce. There is a lack of unified planning, the development of logistics infrastructure in different regions is unbalanced, the coverage of guaranteed rural logistics is limited, and the dispersed nature of rural demand makes the “last kilometer” delivery problem especially prominent. Socialized logistics still cannot effectively serve villages and towns. In addition to the circulation of means of agricultural production and living, the circulation problem of agricultural products is even more prominent, because agricultural products usually have fresh characteristics, are easily damaged and perishable, and have higher requirements for timeliness and control of the transportation process.