2015: New Agricultural Thinking Tackles the Hard Problem of Agricultural Product Marketing

If one absolutely had to describe the new agricultural economy of 2014 in "one word," the way Hawk of the Mountain in "Taking Tiger Mountain by Strategy" would, it would be - lively and chaotic, or one could also say - chaotic and lively.

Over the past year or two, countless investors and new farmers have thrown themselves into agriculture for all kinds of reasons, but more than half of them can no longer keep going, are enduring the torment of losses, or have already announced their withdrawal from agriculture, while truly profitable players are very few.

It is no exaggeration to say that despite the hot investment, 2015 may be the coldest year for new agriculture. From a macro perspective, the slowdown in economic growth and the decline in consumers' purchasing power, together with the stricter Food Safety Law about to be introduced and the still-unclear rural land policy, jointly constitute an unoptimistic external environment that will have a major impact on the new agricultural economy.

From a meso-level perspective, amid all the noise, most of the forces blindly plunging into the new agriculture movement either do not understand the characteristics of the agricultural economy or suffer from selective blindness. First, agriculture is heavily affected by natural factors, and therefore carries greater risk, while cost control and quality control are unstable. Second, the cycle for returns to take shape is long. Because agricultural production cycles are long, ranging from several months at minimum to several years at most, the formation of returns generally can only be completed at the end of an agricultural production cycle. For investments in agricultural infrastructure such as water conservancy facilities, land leveling, and soil improvement, returns require many years of patient waiting. In addition, agricultural production responds slowly to the market and adapts poorly. Agricultural products have long production cycles and are greatly affected by natural conditions, so structural adjustment always appears strongly lagging and the ability to adapt to market changes is very weak.

From a micro perspective, many enterprises entering new agriculture today are plagued by problems such as a weak management foundation, extremely scarce marketing capabilities, a serious shortage of specialized talent, and stretched follow-up funding. Compared with industrial enterprises and service enterprises, agricultural enterprises have more obvious shortcomings in these areas.

So recently I have been constantly calling for this: new agriculture needs new thinking. We face many difficulties, but the changes and opportunities before us are even greater. Whether it is more capital and resources brought by globalization, more business opportunities brought by urbanization, or especially the new opportunities created by the mobile internet, all of them may strike and change our thinking and give us the ability to redesign from the top level.

At present, more and more people realize that agricultural product marketing is the biggest problem in the new agricultural economy. In recent years, the enormous upstream capital has created relative saturation or even overcapacity in production capacity, while overly extensive management has made the problem of product homogenization especially serious. As a result, many agricultural products produced with great effort, labor, and money cannot be sold, becoming a sword of Damocles hanging overhead. For example, at the end of 2014, many people were predicting that in the first half of 2015, large inventories would cause a sharp plunge in prices in China's apple market.

If that indeed happens, many enterprises will very likely fall in the final hundred meters, sacrificed in the darkness before dawn arrives. If so, no matter how beautiful the phenomenon of new agriculture is, it will have nothing to do with us.

The most important changes may need to start from the following three aspects: replace production thinking with hit-product thinking, to avoid overproduction and homogenized competition - this is fundamental; replace advertising thinking with cultural-creative thinking - agricultural product marketing cannot rely on large capital and heavy promotion, and the key lies in striking directly at people's hearts and creating higher added value - this is crucial; finally, replace channel thinking with community thinking. In the mobile internet era, we may already be able to skip intermediate channels and reduce layers, thereby creating the power of consumer communities that we own ourselves - this is the center of the change.