Confusion Over Agriculture Internet Plus Development Sparks Multi-Party Debate

A thousand readers have a thousand Hamlets in their hearts, and a thousand agricultural enterprises can voice a thousand ideas about Internet Plus. The former is a differentiated reader experience created by art, while the latter, to a certain extent, reflects the disorder and chaos in the development process of Agriculture Internet Plus. Getting online is already imperative, but how to get online is truly a problem.

"Do you think building a website and setting up an official account is Internet Plus?" Among the many enterprises, analysts, and investors interviewed by Securities Daily, almost all raised this question when the current development misconceptions of agricultural Internet were mentioned. So, what exactly is the essence of Agriculture Internet Plus?

The Real Work Is Offline

Going Online Without Users Is Futile

Internet analyst Yu Bin explained in an interview with a Securities Daily reporter that traditional enterprises are now all chanting the slogan of Internet Plus, but there are many misconceptions in the process. For example, opening an online store and building a website is considered doing e-commerce, setting up Weibo and WeChat is considered doing online promotion, and outsourcing related operations and services is considered foolproof.

This view was endorsed by multiple enterprises and analysts interviewed by Securities Daily reporters. "When agriculture engages in Internet Plus cooperation, there are often some misconceptions, believing that building a website or setting up an official account is an Internet transformation. However, when agricultural enterprises incorporate Internet factors, the real problem to solve is how to connect with users," said Wei Sanshui, founder and CEO of Big Food, in an interview with a Securities Daily reporter.

Yu Bin believes that the fundamental development of agricultural IoT still lies in products. In the Internet ecosystem, only good products can gain users' attention and trust. "For example, some catering enterprises and brands that were hot for a while with Internet thinking as their main selling point, under the baptism of the market, have now been ignored because they lacked the support of good products."

"The combination of traditional agriculture and the Internet industry first occurred in the field of agricultural e-commerce. But agricultural product e-commerce business is not the true combination of the Internet industry and traditional agriculture. E-commerce business merely opens a sales channel on the Internet. Online marketing is just a means; the real content of service is still agriculture itself. Putting information online does not equal traditional agricultural enterprises participating in the Internet industry. Only by making good use of the Internet industry's big data analysis, new business models that subvert traditional business models, and improving one's own industrial processes, can it truly be called traditional agricultural enterprises completing cooperation with Internet Plus." Wu Hanxuan, an analyst at a research center, introduced this to a Securities Daily reporter.

In this regard, Wei Sanshui also expressed the same view: "There is a trust gap between traditional agricultural enterprises and users. Technology can solve the hardware of this gap, but how to fill the gap in a humanized way is soft power. Therefore, for traditional agricultural products to carry out Internet Plus operations, they must be vertical, segmented, online-offline, and full-site operated. Only in this way can the broken user trust be gradually repaired."

Building Confidence Is Not Achieved Overnight

E-Commerce Is a Breakthrough but Also Prone to Reshuffling

Previously, Securities Daily mentioned in related reports that industry insiders believe consumers' serious lack of confidence in agricultural products has caused certain confusion for agricultural enterprises in their Internet Plus layout. In response, Wu Hanxuan believes that the safety of agricultural products is a key area of focus in our country. Regardless of whether there is cooperation with the Internet industry, the red line of ensuring the quality and safety of agricultural products must never be crossed.

In addition to product safety, for current agricultural enterprises, the rapid development of the Internet industry means that after a company with relatively good products or business models appears in the industry, it will be quickly replicated within the industry, resulting in a large number of homogeneous products or enterprises. Agricultural enterprises should also avoid this phenomenon when engaging in Internet Plus cooperation, actively developing various vertical demands, creating different products, and targeting different customers.

In addition, after launching Internet business, it is necessary to avoid online marketing products and methods being completely consistent with the physical operation system, which would greatly affect the operating results of physical stores. There needs to be differentiation and targeting, considering the consumption habits of different agricultural consumer groups, and adopting different operating mechanisms.

From publicly available information, in the current development process of Agriculture Internet Plus, choosing to rely on e-commerce for operations is the current development strategy of most enterprises. According to Yu Bin, there are currently three main industry models: cooperating with offline supermarkets, where users place orders and goods are shipped from the supermarket; self-operated, which means purchasing from fruit and vegetable wholesale markets every day, and shipping directly after users place orders; allowing merchants to join, where users place orders and then orders are forwarded to merchants.

A relevant person in charge of SF Best stated in an interview with a Securities Daily reporter that e-commerce is an important breakthrough for traditional agricultural enterprises to engage in Internet Plus cooperation. However, at the same time, due to the openness of e-commerce and the regional characteristics of traditional agricultural products, when traditional agricultural enterprises enter e-commerce platforms to compete with agricultural products from across the country and the world, they may very likely lose the protection of local advantages. Therefore, agricultural products lacking differentiation, with ordinary quality, and low added value may be reshuffled out of the game in such fierce competition.

Any Internet Plus industry uses the Internet as a means and develops the industry as the main body, and the agricultural Internet industry is no exception. Wei Sanshui believes that the way to solve this industry situation is to hope that future industry development can drive toward the path where product value and price are equivalent. "The next ten years are the decade of agriculture, but this depends on the efforts of all participants."

Money Alone Does Not Guarantee Success

A Lengthy Chain Tests Participants' Capabilities

Based on optimism about the agricultural industry in the next decade, many enterprises have announced large-scale investments in the agricultural industry, but subsequently, rumors of development setbacks have also been heard from time to time. Having money is certainly a good thing, but can money seize the lead in the agricultural decade and laugh until the end?

"Agricultural enterprises have long production cycles and small profit margins. Factors such as policies and the natural environment all affect the development of the agricultural industry, which still requires strong national support and protection. At the same time, the educational level of agricultural workers is relatively low, and many enterprises themselves may have certain deficiencies in management. In addition, many agricultural individuals in our country are still highly dependent on the original traditional business models and planting methods, and are quite resistant to professional mechanized production models that can form a certain scale. This requires professional managers to enter the industry and help it develop." Wu Hanxuan believes that these are all issues that participants need to consider.

The aforementioned SF Best person believes that an important reason for the current limited circulation range of agricultural products is underdeveloped cold chain circulation, large circulation losses, and many circulation links. These are the main thresholds for agricultural products going online: "Putting agricultural products on e-commerce for sale requires more stable quality and supply volume, which places higher demands on enterprises' large-scale production and quality control. For non-standardized agricultural products, carrying out standardized production management, transportation management, and establishing safety management awareness and standards for the entire process of agricultural products are urgent problems for the industry to solve."

Can large investments alleviate these problems? The aforementioned SF Best person disagrees: "Cold chain transportation, for example, is an industry with high thresholds. In addition to requiring high-cost investment, it also requires professional industry experience and logistics teams, which cannot be achieved in the short term. My feeling is that the threshold of this industry is higher than other e-commerce categories, because the products are non-standard, and supporting industries such as cold transportation are also in their early stages of development. There are many opportunities but also great difficulties."

How difficult is it to seek standardization in a world of non-standard products? "It is like the four diagnostic methods of traditional Chinese medicine: observation, auscultation and olfaction, inquiry, and pulse feeling. First is the accumulation of experience, then formulating a standardized management manual. But since the standards for each product are different, the standardization process is more complex," said the aforementioned SF Best person.