Agri-related e-commerce has broad prospects, and a new generation of farmers faces a skills gap

On November 15, the mobile application platform "Xinnongbao," dedicated to agricultural information services, went online. According to reports, "Xinnongbao" will be supported by an online agricultural materials mall and offline physical chain service stores, integrating the traditional agricultural materials supply chain, changing the traditional sales model, and achieving direct connection between agricultural materials manufacturers and farmers.

The emergence of "Xinnongbao" heralds seamless integration between the mobile internet and agriculture. Even before this, the "romance" between the internet and agriculture had already begun. Agriculture had already been deeply branded with the "internet" mark, and the energy generated by their integration is enormous, with broad prospects.

The internet begins its "farming period"

Major e-commerce players are leveraging their respective advantages and actively laying out plans in the agricultural sector

Recently, major e-commerce players have been actively laying out plans in the agricultural sector. A photo circulating online shows more intuitively the penetration of major e-commerce players in rural China: on the outer wall of a house in a certain village, two huge wall advertisements are "locked in confrontation," one saying "If you want a good life, hurry onto Taobao," and the other saying "To get rich, rely on hard work; to be thrifty in managing the household, rely on JD.com."

"After successfully listing on the New York Stock Exchange in the United States, agri-related e-commerce will become one of the three key areas in our future layout," said Jin Jianhang, president of Alibaba Group, recently. Alibaba's tilt in strategic layout is entirely based on the enormous potential of the agri-related e-commerce field. According to statistics, from 2010 to the present, the sales of agricultural products on the Alibaba platform grew from about 3.7 billion yuan in 2010 to a level expected to exceed 80 billion yuan by the end of this year, with an average annual growth rate of 112.15%. In 2013, the sales growth rate of fresh products on Taobao (including aquatic products, meat and fruit) reached 194.58%, ranking first among all categories.

Alibaba's moves go far beyond these. Last month, Alibaba announced the launch of the "Thousand Counties, Ten Thousand Villages" plan, with an expected investment of 10 billion yuan within 3 to 5 years to establish 1,000 county-level operation centers and 100,000 village-level service stations. This means that in the coming years, Alibaba will extend its e-commerce network to cover more than 1/3 of the country's counties and 1/6 of rural areas.

There is also no shortage of agri-related topics about JD.com, from Liu Qiangdong selling rice in the early days, to listing fresh products, to actively laying out the "Pioneer Station Plan" in counties and townships, all of which show JD.com's ambition to make great achievements in the agricultural sector.

Some analyses say that compared with Alibaba's layout strategy, which leans toward marketing, JD.com's approach of relying on its own logistics system to set up information stations in rural areas and using them as distribution stations and self-pickup points for network and rural logistics will be difficult to turn into a huge profit in a short time. But JD.com's agricultural e-commerce may not have considered making money in the first few years. And the recently hotly discussed online activity "JD.com sends seeds to the countryside" has brought JD.com's agricultural e-commerce layout thinking to the surface, namely that JD.com provides high-quality seeds for agricultural products and high-quality fresh seedlings, farmers cultivate them in the rural market, and finally they are sold through the JD.com platform. Once this closed-loop layout is formed, JD.com will turn the vast countryside into a huge fresh produce production base, and its competitiveness can be imagined.

While the two major e-commerce giants are engaged in fierce "battle" in the agri-related field, other vertical e-commerce players focused on agricultural products are also growing stronger. COFCO Group's Womai.com is precisely one of the outstanding ones.

According to Tong Yang, senior manager of the public relations department of Womai.com, this year's "Double 11" saw a "blowout" in orders for agricultural and sideline products on Womai.com, with fresh products showing the strongest growth, reaching an increase of 600%.

To ensure product quality and reduce intermediate links, Womai.com relies on COFCO Group's unique advantages and has set up "Womai.com exclusive supply bases" in some areas producing "geographical indication" agricultural products, carrying out long-term cooperation with local farmers. "We have a professional team to guide, supervise and inspect the production process of agricultural products to ensure product quality," Tong Yang said.

In August this year, Womai.com announced the completion of Series B financing, with an amount reaching 100 million US dollars. It is understood that this round of financing will mainly be used for warehousing, cold-chain distribution, logistics, IT and other system construction and to improve user experience.

Nurturing a generation of "new farmers"

Whether farmers can accept the baptism of the internet and become "new farmers" is the key to the "deep integration" of the internet and agriculture

The integration of the internet and agriculture should not be a solo carnival of major e-commerce players. As the main actors in this transformation, whether farmers can accept the baptism of the internet and become "new farmers" in the true sense is the key to the "deep integration" of the internet and agriculture.

Some experts point out that the prominent feature of the internet is "nodalization and decentralization," and this fits well with the development model still commonly found in China's rural areas, which uses smaller individuals as economic units. From this point of view, the two inherently have the soil for integration.

Zhi Hongguang, who has long been engaged in privately run education, has walked ahead. With the original intention of letting relatives and friends eat healthy food, he bought a plot of land in the suburbs of Changchun City and specifically grew grain, vegetables and fruit. At first, it was only to guarantee supply for his own family and relatives and friends. Later, he used the internet to seek subscribers and provide door-to-door supply. Through self-media such as Weibo or WeChat, he released information on how to ensure no pesticides and no chemical fertilizers during vegetable production.

Feng Xiaoyan, a farmer in Jingbian, Shaanxi, used the internet to find a large market for the potatoes of her hometown. As early as 2012, Feng Xiaoyan became famous through the opportunity provided by CCTV's "Avenue of Stars," and her nickname "Potato Sister" spread across the country overnight.

On Weibo, "Potato Sister" rapidly increased her followers by posting pictures and sharing knowledge about eating potatoes. In 2013, through connections made by Weibo followers, "Potato Sister" signed orders worth 150 million yuan from the Shanghai market in one stroke. At present, her online store customers also mainly come from Weibo and WeChat.

In addition to the obvious changes, the internet's transformation of rural social relations is also occurring imperceptibly.

Zheng Yanan, a professor at Heilongjiang University, and her graduate students conducted a six-month research study using Chen Hongli, owner of the well-known Taobao agricultural products store "Chen Dali Daohuaxiang Rice Store," as a sample. The study found that the internet not only brought him, who otherwise should have gone to the city to work, closer to the land, but also closer to other young people in the same village.

Zheng Yanan believes that the internet's "decentralization" characteristic provides the possibility for rural youth like Chen Hongli to overturn their fate. The embrace of the mobile internet by a new generation of young farmers embodies the meaning of getting rich through labor and strengthening themselves through association. This kind of self-organization is not only an economic need, but also a psychological need. Relying on the internet to sell trustworthy rice is not only a matter of food safety, but also allows farmers to form a unique platform for communication with the outside world.

Calling for scale management

To advance the application of the internet in agriculture, we should focus on a whole chain, not a single point

"Internet + agriculture" looks beautiful, but there is an old saying: "Cherries are delicious, but the tree is hard to plant." The application of internet technology in agriculture, rural areas and among farmers faces many more practical obstacles than in industry, towns and among urban residents.

According to the "34th Statistical Report on China's Internet Development" released by the China Internet Network Information Center in July 2014, the rural population accounted for 28.2% of China's netizens, reaching 178 million. Although the increase is obvious, based on China's enormous total rural population, there is still a huge gap between the rural internet penetration rate and that of cities.

It should be noted that "new farmers" like Zhi Hongguang, who voluntarily move from cities to rural areas to engage in agricultural activities, are still few in number. "We 'new educated youth' who go from cities to the countryside are very familiar with the internet and skilled in using it, but at present rural young people generally study and work away from home, and those left behind in rural areas are mostly older farmers of the older generation. Even if computers and the internet reach the village, there is still no one who knows how to use them." In addition, unlike industrial products such as clothing and cosmetics, agricultural products are constrained by weather and have their own characteristics such as long production cycles and many categories.

It is understood that agri-related e-commerce companies like Womai.com that have already built a mature chain from upstream supply and product quality control to cold storage and logistics distribution are very few. Some analyses say that the transport loss rate of fresh products reaches 20%, and the cost of cold-chain logistics remains high, resulting in continuous cash-burning losses. "I hope the government can focus its support for agri-related e-commerce on the cold-chain logistics link," Tong Yang suggested.

Compared with other products, the history of the "e-commerceization" of agricultural products is still very short. At present, people are not yet fully accustomed to buying agricultural products online. Tong Yang analyzed: "At this stage, our goal for investment is still mainly to cultivate users' purchasing habits. We believe that after the 'post-85' and 'post-90' generations grow into the main purchasing force in society, we will welcome better opportunities."

Zhao Hui, deputy director of the office of the leading group for the agricultural e-commerce pilot work in Jilin Province, believes that to advance the application of the internet in agriculture, we should focus on a whole chain, not a single point. If any link in the chain is missing, it will be difficult for the other links to function.

Some experts point out that scale management should be one of the paths for the further development of internet agriculture. Scale can lay the foundation for the application of internet technology, and in turn can also improve the management level and operational efficiency of agriculture.

It is understood that "internet + internet of things" technology suited to large-scale agriculture has already begun to be applied in some areas of China. Especially in the field of precision agriculture, China has established 26 comprehensive digital agriculture application demonstration bases in 7 provinces including Xinjiang, Heilongjiang and Jilin. An experiment conducted at a demonstration base in Heilongjiang showed that field crop yields in the demonstration area increased by 15% to 20%, and economic benefits increased by 10%. But it cannot be denied that traditional smallholder farming is still some distance from the "internet + internet of things" production model.

From field to table, from countryside to city, separated by a "network," the world is vast, and integration is still on the way.