A Comprehensive Analysis of the Current State and Future Trends of Agricultural and Livestock E-commerce

"200 years ago, Watt invented the steam engine and launched the Industrial Revolution. Today, the Internet is permeating every area of our production and life, ushering in another entirely new era." Dr. Pi Canhui, general manager of Guangzhou Heshikang Biotechnology Co., Ltd., shared his views on the China pig industry chain CEO exchange platform, summarizing the current state of China's agricultural and livestock e-commerce, addressing how traditional enterprises should face the surging "Internet Plus" wave, and discussing how breeding users and traditional distributors should embrace the Internet.

Pi Canhui cited a set of e-commerce development data: in 2014, China's e-commerce market transaction volume reached 13.4 trillion yuan, a year-on-year increase of 31.4%; the online retail market transaction volume reached 2.82 trillion yuan, a year-on-year increase of 49.7%, accounting for 10.6% of total retail sales of consumer goods. The data shows that China's e-commerce market transactions are showing a momentum of vigorous growth, and the scale of online retail market transactions is also gradually expanding.

"As for China's agricultural and livestock materials market, the feed market scale is 730 billion yuan, second only to the fertilizer market scale and ranking second; the animal health market scale is 44.7 billion yuan," Pi Canhui said. "As for the 2014 agricultural materials online shopping market scale, Taobao's agricultural materials transaction volume was 2.5 billion yuan, a year-on-year increase of 188%. Although e-commerce accounts for only about 0.1% of the entire agricultural materials market, its growth momentum is rapid."

"Among online e-commerce platforms, those doing relatively well in agricultural materials currently include Taobao, Nongyi.com, JD.com, Nongshang No. 1, and Xinnongbao, while livestock e-commerce platforms mainly include Huitong Nongmu, Zhuyi Mall, and Sunshine Livestock Mall. The main bottlenecks currently facing e-commerce development are: farmers have not yet established online shopping habits and do not trust online shopping; traditional distributors and salespeople resist e-commerce; order logistics and distribution are difficult, and on-site service is difficult." Regarding the bottleneck issues, Pi Canhui suggested, "At present, those mainly promoting feed and animal health e-commerce will generally not be traditional large enterprises, because they have too many vested interests to take care of. The first batch of e-commerce users should fall into two categories: first, large-scale farms with advanced concepts, standardized and efficient management. Second, small family farms whose owners love learning and whom distributors have no time to attend to."

Pi Canhui analyzed that China's breeding industry is currently at a relatively low level, with production efficiency far behind European and American countries. The industry has begun to enter an era of meager profits, and low-efficiency farmers will face elimination. Farms currently mostly rely on passively accepting sales pitches as their main purchasing method, have low identification ability, and combined with opaque information, this has caused incidents of "cheating farmers and harming farmers," while also accelerating the pace of survival of the fittest among farmers. "Today, more and more farms are beginning to come into contact with e-commerce and are continuously improving their ability to identify genuine products. They have already experienced the convenience brought by e-commerce, and production costs have declined compared with before, which will further improve pig farms' cost control ability and competitiveness." At the same time, products with stable and reliable quality and good value for money are constantly standing out, and agricultural and livestock e-commerce platforms are competing with one another, thereby promoting the maturity of the e-commerce market.

"The service requirements of agriculture and livestock determine that e-commerce cannot completely replace traditional distributors; on the contrary, it needs service providers with vision and efficiency even more. The preferred path for the Internetization of agriculture and livestock is O2O, that is, integrated online and offline development that mutually promotes each other." Pi Canhui believes, "Product quality is the prerequisite for e-commerce success, technology is the vitality for sustained e-commerce success, and service is the guarantee of e-commerce competitiveness."