Agricultural e-commerce is developing rapidly, but cool-headed thinking is indispensable
At this year's "Two Sessions," one of the proposals by Zhang Jindong, member of the National Committee of the Chinese People's Political Consultative Conference and chairman of Suning Commerce Group, was about "promoting the development of the agricultural product circulation system," and this time he focused on agricultural e-commerce. Behind the rush of giants such as Alibaba and JD.com to stake their claims in agricultural e-commerce is the accelerated penetration of the internet into rural areas and the traditional agricultural industry. With capital from all sides actively positioning itself, plus strong support from government policies, the development of agricultural e-commerce is spreading like a prairie fire. Some industry insiders predict that once the rural consumer market is effectively activated, companies with a market value of hundreds of billions will surely be born.
Agricultural product e-commerce enters a development phase
This year, China's agricultural product e-commerce will move from a "growth phase" into a "development phase."
E-commerce enterprises are actively opening up the rural market. JD.com launched a "caravan" reaching third- and fourth-tier cities and rural areas, and Alibaba launched the "Thousand Counties, Ten Thousand Villages" plan. "Going to the countryside" has become a common goal for e-commerce players and also a new and important growth point for them, and their "countryside" business is becoming increasingly busy. At the same time, agricultural product e-commerce has entered a peak period for financing. According to statistics, Benlai Life, Meiwei Qiqi, JD.com, Womai, Zhaijisong, Alibaba, Shouhuobao, and Qingnian Caijun have successively obtained large amounts of PE/VC financing, and most of this financing has been injected into the field of agricultural product e-commerce.
Cross-border agricultural product e-commerce has become a new hotspot. On the import side, Guangdong Province's first pilot agricultural product cross-border e-commerce platform was launched at Guangdong Guotong Logistics City; Alibaba launched an activity for direct wholesale entry of South Korean agricultural products into China; the Shanghai Free Trade Zone opened two cross-border e-commerce platforms within half a year; Taobao, JD.com, Womai, and others had long since opened overseas direct procurement or direct mail services for agricultural products. On the export side, in addition to comprehensive service providers such as eBay, Amazon, Alibaba, and DHgate, a large number of B2C cross-border e-commerce platforms such as LightInTheBox have also emerged.
"A thousand websites, one face" restricts development
However, behind the prosperity, agricultural product e-commerce still has two major problems that urgently need to be solved.
First is "a thousand websites, one face." At present, China has more than 3,000 agricultural product e-commerce enterprises of various types, and the number is still growing. Convergent investment and duplicated construction are very common, and homogenization is very serious, leading to disorderly competition, operating at a loss, and the coexistence of website creation and website shutdown. Most agricultural products have relatively low commodity value and relatively high transportation costs, exceeding 100% of the commodity cost or even more, which is an important factor causing their prices to rise.
Second, the quality of participants needs to be improved. At present, most producers of agricultural products in China are individual farmer households. Among them, fewer than 5% have received systematic agricultural vocational and technical education, while the application of e-commerce requires mastery of network information technology and electronic technology, such as electronic data interchange, email, electronic bulletin systems, barcodes, image processing, and smart cards.
Third, the agricultural product quality standard system is not sound. China's agricultural production is still a household-based production and operation model. Farmers are dispersed in their level of organization, production and processing capacity is low, efficiency is not high, and the degree of industrial intensification is low, making it difficult to form a strict quality standard system, with obvious differences among products. The safety of many agricultural products is not high, and unsafe factors such as pesticide residues and hormone residues still exist in large quantities. The number and proportion of "three products and one label" products are relatively low.
Fourth, the circulation of agricultural products is not smooth, and information is not readily available. A notable feature of e-commerce is that it uses a set of electronic tools to transform objectively existing physical entities into electronic data, including products, currency, transaction vouchers, and business negotiations, so it requires the support of a powerful information system. However, at present, China's agricultural information release channels are not smooth, information reception methods are backward, and there is a lack of a unified agricultural information system. The agricultural information market is developing slowly. In particular, the agricultural information service market, agricultural product design market, agricultural capital market, agricultural product processing market, and agricultural product storage and transportation as well as packaging markets have not yet been developed or formed, and the agricultural informatization system is still not sound.
Innovating agricultural product circulation methods
How can a path suitable for one's own development be found? First, strengthen the participation of government departments in agricultural product e-commerce. The 2015 Central "No. 1 Document" explicitly mentioned that in "innovating agricultural product circulation methods," it will "support e-commerce, logistics, commerce, finance, and other enterprises in participating in the construction of agriculture-related e-commerce platforms." This requires government departments, under the guidance of national policies, to support the development of agriculture and agricultural product e-commerce from the height of policy and law. In specific operations, the government can use macro-control, taxation, and other means to encourage enterprises to use e-commerce more; support research and development activities through funding or preferential policies to improve the level of e-commerce technology; and the government must also play an active role in the formulation and implementation of e-commerce policies and regulations and in the identity authentication of online transaction users, so as to ensure and promote the safe and smooth implementation of agricultural product e-commerce.
Second, accelerate the construction of information infrastructure. First, in response to the prominent problem of poor information flow and disconnection between production and sales in the current development of agriculture and the rural economy, agricultural information services should be provided for the actual needs of the grassroots and farmers; second, make full use of existing information infrastructure resources to save investment and fundamentally alleviate the contradiction of insufficient supply of agricultural informatization facilities; third, provide information services to farmers free of charge to fundamentally resolve the contradiction between the huge demand of the vast number of farmers for agricultural information services and the serious shortage of actual supply; fourth, adopt the method of tiered investment by governments at all levels to mobilize the enthusiasm and initiative of local governments in participating in agricultural informatization construction; fifth, build the agricultural information network project in step with the "government online" project to realize the "integration of the two networks."
Third, realize the standardization of agricultural product names and the grading of quality. Relevant government departments need to uniformly formulate naming standards for agricultural products, realize the grading of agricultural product quality, and classify agricultural products of different qualities according to quality standards.
Fourth, vigorously develop agricultural product logistics. Establishing green channels for agricultural products and developing agricultural product e-commerce distribution are key. Logistics entities should be actively cultivated among farmers. The main forms of such entities include supply and marketing cooperatives, agricultural companies, agricultural product distribution centers, and agricultural product logistics broker teams. Give play to the role of rural cooperative economic organizations and rural brokers in agricultural product e-commerce, and cultivate e-commerce talent.
Fifth, promote the transformation of enterprises engaged in traditional agricultural product trade toward e-commerce. For traditional enterprises directly or indirectly engaged in the production and trade of agricultural products, internal informatization construction should be strengthened, internet technology should be used to establish internal enterprise networks, and on this basis, external networks leading to the international internet should be established. Enterprises can first establish their own webpages on the internet and gradually build them into websites, using the internet, this public medium, to carry out product publicity and promote their products on their own websites.