Nongshang No. 1 is the Amazon and JD.com of the agricultural materials world
Nongshang No. 1 CEO Luo Wensheng delivers the keynote report
Regarding agricultural materials e-commerce, everyone will have a series of questions: What if farmers don't know how to use the internet? How do you reconcile channel conflicts? How do you guarantee logistics and delivery? How do you keep up with technical services... Luo Wensheng, Vice President of Kingenta and CEO of Nongshang No. 1, summed up the solutions to these problems as the genes a successful agricultural materials e-commerce company should have: make ultimate products like Xiaomi phones; build efficient logistics like JD.com e-commerce; be as convenient and worry-free as Didi taxi; build dense village stations like China Post; and provide professional services like Chunyu Doctor.Following this line of thinking, Nongshang No. 1 has brought together strong resources from multiple sides - capital, channels, logistics, products and experts: national capital support represented by the China Agricultural Industry Development Fund; national channel support represented by China Post; national quality support represented by Sinochem, China Seed, Luxi, Kingenta and others; and national technical support represented by the National Engineering Center for Compound Fertilizers, the National Engineering Center for Pesticides, and the National Engineering Center for Seeds, creating a national team for agricultural materials e-commerce and giving agriculture the wings of the internet. This newspaper provides you with a first-hand in-depth analysis of Nongshang No. 1's organizational structure and operating model.
Capital: Building an e-commerce national team
Nongshang No. 1 was initiated by Kingenta and jointly built with 4 fund companies including the China Agricultural Industry Development Fund, a fund directly under the Ministry of Finance, and the Modern Seed Industry Development Fund. The first-phase investment was 2 billion yuan, making it arguably the largest move to date. Also deeply involved in cooperation are China Post and JD.com. It is worth noting that the China Agricultural Industry Development Fund is the first national-level agricultural industry fund approved by the State Council, and the Modern Seed Industry Development Fund is the first seed industry fund initiated and established by the Ministry of Finance together with the Ministry of Agriculture, the Agricultural Development Bank of China, and Sinochem Group. Their investment represents the will of the state, and therefore Nongshang No. 1 has been interpreted by the industry as an e-commerce national team.
Wu Wenjun, Chairman of the China Agricultural Industry Development Fund, said that as an investment representing the national level, the Agricultural Development Fund's goal is to leverage an entire industry by supporting the development of leading agricultural enterprises. Since 2012, the Agricultural Development Fund has screened more than 1,000 projects, and in the end invested in only 14 projects. Investing in Nongshang No. 1 can truly be described as one in a thousand.
Positioning: The Amazon of agricultural materials
Mainstream e-commerce models fall roughly into three types: first, Taobao's third-party open platform, where all goods can set up shop; second, JD.com's vertical e-commerce, which is mainly self-operated; third, enterprises building their own platforms, such as Xiaomi phones. What is Nongshang No. 1's positioning?
Nongshang No. 1 has a slogan: to be the Amazon and JD.com of agricultural materials. Both Amazon and JD.com are platforms mainly based on self-operation, with professional procurement, professional logistics and professional services. Nongshang No. 1 also adopts a dedicated-operation model. The platform will not be open to all products; only leading brands in their respective industries may set up shop, and it provides professional logistics delivery and technical services to offer users the best consumer experience. Currently, the first batch of products online includes well-known domestic agricultural materials enterprises such as Kingenta, Sinochem, China Seed, Jincheng Anthracite Mining Group, Wengfu, Luxi, and Guanfeng Seed Industry, as well as foreign agricultural giants such as Israel's Revoroth and the United States' Borax. In order to eliminate fake and inferior agricultural materials, all products online are underwritten by insurance companies; in the future, Nongshang No. 1 also plans to establish a laboratory to set standards for products entering the platform and to shape a quality benchmark for the industry.
Service: Launching the Thousand Counties and Ten Thousand Villages Project
The real work of agricultural materials e-commerce lies offline - this has become a consensus. Nongshang No. 1's offline system includes three levels: county-level operation centers -- village-level service stations -- members. Luo Wensheng said that in the next three to five years, Nongshang No. 1 will build 1,000 county-level operation centers, develop 100,000 village-level service stations, and cover 10 million farmer members. In this structure, county-level operation centers are responsible for delivery and agricultural technical services, while village-level service stations are the trust bond between e-commerce and farmers, responsible for helping farmers place orders, look up information, and providing other convenience services.
In building Nongshang No. 1's service system, two striking players are involved -- China Post and JD.com. China Post has an extensive network of grassroots outlets in rural areas, Kingenta has the largest channel resources in the compound fertilizer industry, and JD.com is highly experienced in platform operation, service center construction and logistics system integration. The combination of the three is expected to build a large-scale ground service system in a short time. Moreover, in the future, Postal Savings Bank of China may also introduce financial services for members and franchise partners.
When talking about how JD.com will cooperate with Nongshang No. 1 in the future, Li Yonghe, Senior Vice President of JD.com Group, said that JD.com is launching a 3F strategy aimed at rural areas and is building five major networks around this strategy, including logistics, marketing, finance and big data. In the future, these resources can be shared and complementary with Nongshang No. 1.
Hit products: Disruptive pricing reshapes the industry
No hit products, no e-commerce. Everyone may still remember Kingenta's aggressive promotion of package fertilizers earlier. Now the mystery is revealed: Kingenta wanted to create package hit products on the e-commerce platform, benefiting members and farmers with stunning discounts.
Products online at Nongshang No. 1 include fertilizers, seeds, pesticides and agricultural machinery. On this basis, fertilizer packages and planting packages have been assembled. These packages have two major market highlights: first, they provide farmers with efficient planting solutions, all in one stop; second, they offer substantial discounts. For example, Nongshang No. 1's e-commerce-exclusive brand -- Taoshibao -- a package priced at 400 yuan offline costs only 299 yuan online; a package priced at 880 yuan offline costs 439 yuan online.
After farmers become members of Nongshang No. 1, the more they buy, the more points they earn, and the value-added services they receive in the future will increase accordingly. Using package hit products to develop members and using package hit products to sign up village stations - these are Nongshang No. 1's thunderous promotion tactics.
Channels: Walking on two legs
Does e-commerce disintermediation mean abandoning traditional channels? Nongshang No. 1 has made an ingenious arrangement in this regard. In terms of products, the categories operated by e-commerce are effectively differentiated from offline ones, so as not to touch the interests of traditional channels; on the other hand, after obtaining e-commerce authorization, agricultural materials distributors can walk on two legs.
One leg is to use the Nongshang No. 1 service platform for customer management and strengthen the competitiveness of traditional channels. In the past, our consumers were all managed in a free-range model, sales relied on treating people to meals, and channel costs were very high. In the future, through Nongshang No. 1, customer stickiness will be greatly improved, and they can operate their own fan economy. For example, with the help of the Nongshang No. 1 expert platform, they can provide users with technical guidance and agrochemical services, regularly send farmers pest and disease control information and weather forecasts, and occasionally launch online promotional activities for farmers. Of course, there will certainly be more value-added services to follow.
The other leg is that distributors can compete for e-commerce agency rights, develop members and village stations in their regions, and transform from traditional distributors into service providers. In this new channel, distributors reach farmers directly and at the same time develop village-level service stations, making them their own free salespeople. Nongshang No. 1 has a vivid metaphor for this: let a whole street help you sell agricultural materials.
Technology: Integrating the best expert resources
For e-commerce to go to the countryside, it must solve the problem of bringing high-quality agricultural materials to the countryside, and it must also break through the bottleneck of the “last mile” of agricultural technical services. Nongshang No. 1 has integrated the best agricultural technical expert resources in China today, using the internet to connect face-to-face and point-to-point with farmers. Nongshang No. 1 has established strategic cooperation with national-level research institutions and authoritative experts such as the National Engineering Center for Compound Fertilizers, the National Engineering Center for Pesticides, and the National Engineering Center for Seeds. In addition, hundreds of domestic and international agrochemical experts and thousands of ground technical service personnel under Kingenta will all join the Nongshang No. 1 service team.
In the future, Nongshang No. 1's online platform will have a hundred agrochemical experts “holding consultations.” Considering the regional characteristics of agriculture, these experts are all divided according to the crops they specialize in and their locations, so members can quickly find the most suitable expert for consultation.
“In summary, complete, professional, good and economical - this is the solemn promise to farmers of Nongshang No. 1 as the national team of agricultural materials e-commerce.” According to the explanation by Nongshang No. 1's head Luo Wensheng, “complete” means providing full-category agricultural materials and full-process solutions, all in one stop, no more running around; “professional” means hundreds of agrochemical experts online throughout the process, solving planting problems both online and offline; “good” means an alliance of champion brands, enabling worry-free purchasing; “economical” means channel disintermediation, with package purchases offering great value.