Internet agriculture ushers in policy dividends: what are the development opportunities?
According to media reports, since “Internet Plus” was proposed, the first special action plan, “Internet Plus Circulation,” will be released on May 15. Among the six key tasks, the first is to promote e-commerce into rural areas.
Coincidentally, the “Opinions on Vigorously Developing E-Commerce and Accelerating the Cultivation of New Economic Momentum” issued on May 7 emphasized that rural e-commerce should be actively developed, and agricultural means of production enterprises should be encouraged to develop e-commerce. The “Opinions” proposed strengthening the integrated development of the internet with agriculture and rural areas, introducing modern management concepts and methods such as industrial chains, value chains and supply chains, studying and formulating opinions on promoting rural e-commerce development, and issuing supporting policies and measures.
⟦NL> With the rapid penetration of the internet and policy support, agricultural materials e-commerce is entering a golden period of rapid development. Shen Yunchang, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, predicted that the future landscape of agricultural materials e-commerce will show four major trends: e-commerce oligopolization, remote services, industry segmentation and warehousing centralization. Faced with the continuous sinking of agricultural materials terminals, if existing distributors can integrate technical services, business services and platform services into one, they will stand out in the e-commerce era.
Sun Zhonghua, Chief Agronomist of the Ministry of Agriculture, recently revealed that the Ministry of Agriculture will list the development of agricultural e-commerce as one of its 20 key tasks for the future, and will make promoting the development of agricultural e-commerce an important measure for transforming the agricultural development model and building modern agriculture.
Industry insiders believe that in 2015 the main battlefield of internet finance will be concentrated in vertical segmented fields, among which “Internet Plus Agriculture” has also become a hot topic of market attention. Recently, the Ministry of Agriculture stated externally that in 2015 it will advance information into villages and households, build an “Internet Plus” demonstration project, and thereby undoubtedly play a positive role in the demand for internet finance, especially agricultural credit.
Stimulated by the news that agricultural e-commerce will receive another round of heavyweight policy support, yesterday Noposion and Xiantan Shares hit the daily limit, while Stanley and Sierte and others all performed strongly.
Agricultural materials e-commerce grabs a trillion-yuan cake
Agricultural materials are essential inputs and the starting point of agricultural production. The three categories of chemical fertilizers, seeds and feed alone exceed one trillion yuan in scale. Industry insiders estimate that the agricultural materials market exceeds one trillion yuan in scale, and leading agricultural materials e-commerce companies have room for revenue growth of more than tenfold.
From the perspective of agricultural production factors, agricultural machinery, chemical fertilizers, pesticides, veterinary drugs and seeds are agricultural materials products, most of which can be standardized, fit the characteristics of repeat purchases, and are suitable for sales through e-commerce models. Against the background of rapid internet penetration and favorable policy support, the external foundations needed for the development of agricultural materials e-commerce are mature, and the major trend of agricultural materials e-commerce has already taken shape. China's traditional agricultural materials circulation system is welcoming disruption and transformation by the internet, and is entering a golden period of accelerated transformation and innovative development.
At present, leading enterprises in China's agricultural materials sector have long begun to enter e-commerce business, such as Stanley and Kingenta, which lead in all aspects of compound fertilizers; Dabeinong, which leads in the scale of its marketing team in the feed industry and has relatively good balance between revenue and profit; and Noposion, the only one whose main business is pesticide formulations. In addition, companies such as Agricultural Products and Huifeng Shares have already laid out operations in the e-commerce field.
Institutions are bullish that agricultural materials e-commerce in fertilizers, pesticides and other areas will become a new blue ocean for the e-commerce industry. China Merchants Securities pointed out that agricultural materials enterprises are following the major trend, embracing the internet one after another, optimizing supply chains, reducing circulation costs, and transforming from sellers into comprehensive service providers, which will open up new growth. Agriculture is entering an era of transformation. Leading agricultural materials companies possess advantages in multiple aspects such as products, channels, marketing and services, have the ability to adapt to agricultural changes, and can become leaders in the development of the agricultural materials industry. The agricultural materials market exceeds one trillion yuan, and leading agricultural materials companies that successfully transform will have room for revenue growth of more than tenfold in the future. Among A-share rural e-commerce concept stocks, Batian Shares, Kingenta, Noposion, Stanley and others deserve close attention in the near term.
Essence Securities pointed out that the internet's ability to integrate everything is accelerating the process of transforming traditional agriculture into modern agriculture. The penetration rate of rural internet users and the internet is steadily rising, and the rural e-commerce consumer market has huge potential. It is expected that the total market size may exceed 460 billion yuan in 2016, and agricultural materials e-commerce will enter a period of rapid development.
Gold-digging points
Noposion
Noposion, a leading listed company in China's pesticide formulation sector, announced in a notice on the evening of May 11 that the “Tiantianquan Internet Alliance Conference” was grandly held in Shenzhen on May 11. The company announced that it would fully advance the “Tiantianquan” internet development strategy, and the Tiantianquan Internet Alliance was officially declared established. The company said that the launch of Tiantianquan is an important step in seizing the “Internet Plus” trend of agriculture, and it is determined to become the best internet enterprise serving the three rural sectors in China. Tiantianquan is a new internet ecosystem that can connect in all directions with farmers' needs (products, technology, finance, agricultural product sales, etc.), and is a highway leading to the great cause of agriculture, rural areas and farmers.
Looking back at the announcement, in March this year Noposion announced that it would increase capital in Nongjinquan by 17.5 million yuan with its own funds, and after the capital increase it would hold a 35% stake in Nongjinquan. This is also the first truly meaningful agricultural internet finance platform in the A-share market.
Essence Securities believes that in 2014 the company's internet-oriented layout had already begun to take shape, and in 2015 it will continue its layout in three aspects: first, continue to join hands with deeply cooperative customers and excellent internet enterprises to jointly build an O2O online and offline service platform—Tiantianquan; second, make every effort to build a B2B e-commerce agricultural materials platform—Nongjiwang; third, use the Nongjinquan P2P internet finance platform to provide financial services to large growers.