Does e-commerce save farmers, or do farmers save e-commerce?

Fundamentally speaking, e-commerce and farmers should grow together, making production more scientific, circulation more efficient, and food safer. Both e-commerce and farmers should do their best.

During the Mid-Autumn Festival and National Day, the couriers at the entrance of the residential compound remain busy as ever. Among them, besides those companies dedicated to logistics, there is no lack of fresh agricultural product e-commerce players. What slightly puzzles me, however, is that the frequency with which these fresh produce e-commerce businesses come and go seems a bit too fast. Often, before these few have even become familiar faces, several new ones have already replaced them.

A recent media report also confirmed my impression. The report cited observations from industry insiders, saying that since the beginning of this year, more than 10 agricultural product e-commerce businesses in Shanghai alone have "died." Indeed, faced with the situation where the added value of agricultural products is low but logistics and preservation costs remain stubbornly high, if these agriculture-related e-commerce businesses cannot win the favor of capital and smoothly secure financing, then wanting to "live to a ripe old age" is truly not easy. This is hardly surprising given the astonishing figures listed in the "2014-2015 China Agricultural Product E-Commerce Development Report." The report states that as of the end of 2014, China had 31,000 agriculture-related e-commerce businesses of various types, of which nearly 4,000 were agriculture-related trading e-commerce businesses. But only 1% of them were profitable, while 7% suffered huge losses, 88% suffered slight losses, and 4% broke even.

In analyzing why agriculture-related e-commerce businesses have such a checkered fate, severe homogenization and disorderly competition are considered the main reasons. To seize the market, agriculture-related e-commerce businesses once launched a subsidy war, with methods ranging from one-yuan fruit, first-order free, to gifts with first orders, and more. But as time passed, industry insiders gradually reached a consensus that promotional methods such as subsidies can only bring short-term prosperity, and what will win consumers in the future is certainly service and quality. And the quality of agriculture-related e-commerce, in the final analysis, is determined by the quality of agricultural products provided by farmers. This prompts us to rethink what kind of relationship e-commerce and farmers should actually have.

For some time, when speaking of the relationship between e-commerce and farmers, the former's role toward the latter has carried more or less a flavor of "savior." In the traditional agricultural product production and sales chain, farmers can be said to be at the very bottom of the entire industrial chain, bearing both natural and market risks, yet rarely having bargaining power or a voice. However, when agriculture-related e-commerce emerged, leveraging the power of the internet, it effectively improved information asymmetry, reduced circulation links, and used the "disintermediation" effect to promote fair trade in the agricultural product sector. This not only helps solve farmers' "difficulty in selling" problem and increase farmers' income; it also helps force standardization in the production stage from the end demand side, improving the quality of agricultural products. Moreover, the internet's innate "grassroots" character also helps farmers stand directly at the center of the trade stage.

However, the "difficulty in selling" problem, in the final analysis, is still the "difficulty in connecting" between scattered smallholder production upstream and the large market downstream. This problem has existed for a long time. Although agriculture-related e-commerce businesses blooming everywhere today provide new perspectives and possibilities for solving the problem, the extent to which they can actually solve it remains to be seen. According to statistics from the Ministry of Agriculture, in 2014 the national online transaction volume of agricultural products exceeded 100 billion yuan, accounting for only 3% of agricultural product sales. At present, the power of the "savior" still seems too limited. In the long run, since the service quality of agriculture-related e-commerce is closely tied to the quality of agricultural products provided by farmers, the roles of "saving" and "being saved" between e-commerce and farmers can actually be interchangeable. With the development of modern agriculture, as the scale, organization, and standardization of agricultural production improve, the quality of agricultural products will be better enhanced, which can help agriculture-related e-commerce gain greater development space and more lasting returns.

Therefore, fundamentally speaking, e-commerce and farmers should have a relationship of growing together. Agriculture-related e-commerce should seize the opportunity of deep integration between the internet and agriculture, pursue mutual benefit with farmers, and strive to achieve win-win outcomes for both upstream and downstream. Making production more scientific, circulation more efficient, and food safer - both e-commerce and farmers should do their best.