Competition Intensifies in Agricultural Inputs E-commerce: The Real Contest Is Over Good Products and Good Service

The battle for agricultural inputs e-commerce is raging, and e-commerce channels will deal a certain blow to the established interests of traditional agricultural inputs channels, but the emergence of any new transaction model is not a wholesale rejection of traditional transaction models, rather it sets higher competitive demands for them. Providing farmers with better agricultural input products and services, that is the direction agricultural inputs e-commerce should strive toward.

According to media reports, on July 14, Alibaba announced the launch of the Taobao agricultural inputs channel, where farmers can buy pesticides, fertilizers, seeds, feed and more in a "one-stop" manner, and obtain scientific guidance on agricultural production techniques. Immediately afterward, on the 16th, JD Group signed an agreement with the agricultural inputs e-commerce platform "Nongshang Yihao," to cooperate in platform construction and operation, service center construction, and logistics system integration, among other areas, to promote the rapid delivery of agricultural inputs to villages and households.

One right after the other, the battle for agricultural inputs e-commerce is raging. Agricultural inputs are both a huge piece of the market pie and yet another new field opened up by "Internet Plus." This move by e-commerce giants has made the agricultural inputs industry exclaim, "The wolf is finally here!" E-commerce channels will deal a certain blow to the established interests of traditional agricultural inputs channels, but breaking down the existing barriers that protect those interests will be no easy task. The emergence of any new transaction model is not a wholesale rejection of traditional transaction models, rather it sets higher competitive demands for them.

At present, Chinese farmers face four major frustrations when buying agricultural input products. First, high markups, because agricultural inputs sales take a multi-channel, multi-tier form, from manufacturer to provincial- and municipal-level agents, then to county-level agents, then to retailers and farmers, with many tiers and continual markups. Second, limited choices, because the current rural consumption radius is relatively small, what farmers can buy depends on what is sold at the village entrance. Third, many worries, because farmers find it very hard to tell good products from bad. Fourth, poor service and a lack of technology, because the service farmers can currently obtain depends on what service the retailer can provide. Agricultural inputs e-commerce has features such as sales channels that reach farmers directly and a convenient logistics distribution system, which can partly solve the above problems and has good development prospects.

After all, agricultural inputs are means of production and have particularities different from other consumer goods. For e-commerce, combining with agricultural inputs is also not easy, and it faces several common difficulties: many farmers do not have the conditions or ability to go online, and they are used to buying agricultural inputs on credit, so they are full of doubts about online shopping where no people or goods can be seen; for agricultural inputs e-commerce to achieve the goal of benefiting farmers, it must cut out intermediaries, which will bring it into conflict with traditional channels; in particular, when big manufacturers in the agricultural inputs field do e-commerce, they often worry that online growth will squeeze the transaction volume of traditional sales channels and that they will be "fighting their own left hand with their right," and how to achieve integration and complementarity between the two tests the industry's wisdom; agricultural inputs are essentially a combination of products and services, and the standardized use and on-site management of products directly affect the results of product use, so great importance must be attached to improving the offline service system and to building a localized service system; and as agricultural inputs are bulk commodities used intensively in a seasonal manner, how to meet high-intensity distribution in a short period is a challenge in both cost and time.

Doing agricultural inputs e-commerce requires confidence, patience and perseverance, and seeking quick success and instant benefits will not lead to success. In previous years price wars among e-commerce players broke out frequently, and the e-commerce industry as a whole was not mature. Today competition among e-commerce players has gradually shifted from price wars to service wars, and e-commerce competes on comprehensive competitiveness, including product quality, price, finance, and logistics distribution. The healthy competition of e-commerce has brought farmers tangible benefits, with prices becoming more transparent and services extending across the entire agricultural industry chain. Farmers have more choices, comparing whose value for money is best and whose service is best, and only then do they choose to buy.

As competition becomes increasingly brutal, only by providing specialized and differentiated services and fully segmenting the market can greater returns be obtained. Whether it is a comprehensive large website or a specialized, finely segmented small website, to grow bigger and stronger it needs to focus on the following aspects. First, agricultural inputs e-commerce must carefully select products; taking seed products as an example, it can only cooperate with seed companies that are well known and have brands, making them the suppliers of seed sources. Otherwise, if problem seeds are bought, farmers suffer losses and the e-commerce player's reputation will also decline. Second, for "Internet Plus agricultural inputs," the weak point is not poor online product transactions but rather the lack of an offline service system, so great importance must be attached to building an offline agricultural inputs service system. Third, whether it is an e-commerce platform or a third-party seller, all should abandon a speculative and short-sighted mentality, do a solid job in service, and truly put farmers' interests first and operate with integrity, so as to win farmers' trust and achieve long-term development. Finally, what makes e-commerce different from traditional retail is that it is electronic, networked and remote, and to avoid the emergence of online shopping chaos such as fake and inferior agricultural inputs and fraud, it is imperative to advance legislative improvements and strengthen oversight. Farmers should also strengthen their awareness of prevention, and must not blindly pursue low prices, for being greedy for small gains leads to big losses; they can keep relevant evidence, such as invoices, electronic transaction records, logistics pickup receipts and chat records, and once a dispute occurs, it can be resolved through legal channels. If after-sales problems arise, do not fear trouble, but contact the merchant immediately to resolve them.

No matter what kind of business model it is, the ultimate focus is genuinely good products with technological substance and competitive good service, and that is the direction agricultural inputs e-commerce should strive toward.