How the agricultural inputs industry can return to its essence with the help of the Internet
2015 is known as the inaugural year of agricultural inputs e-commerce. At this turning point between the old and the new year, reviewing the exploration paths of several well-known enterprises in the industry's agricultural inputs e-commerce over the past year is essential for grasping the direction of "Internet + agricultural inputs" in the new year. Recently, the "Internet +" Pesticide Regulation and Agrochemical Service Model Innovation Summit Forum was held in Haikou City, Hainan. Sui Pengfei, Director of the Institute for the Control of Agrochemicals, Ministry of Agriculture, said in his speech at the forum that China's agrochemical service level lags 10 to 20 years behind the broader commercial environment. It is necessary to fully utilize Internet technology and innovate agrochemical service models centered on the scientific application of pesticides in order to achieve leapfrog development, thereby supporting the implementation of the pesticide zero-growth strategy.
Rural Taobao builds a rural Internet ecosystem
"Our company's positioning is Internet + rural areas, not Internet + agriculture. Because we go beyond just buying and selling products; we build a rural Internet ecosystem so that farmers can fully enjoy the convenience brought by the Internet," said Wang Yanzhe, General Manager of Alibaba's Rural Taobao Division.
Alibaba plans to invest 10 billion yuan to establish 1,000 county-level service centers and 100,000 village-level service stations, covering 1/3 of the counties and 1/6 of the rural areas nationwide. This will popularize e-commerce in rural areas, break through information and logistics bottlenecks, and solve the problems of difficulty in buying and selling in rural areas. More importantly, Rural Taobao, through the construction of county and village operational store infrastructure, recruits partners locally and village-level service station managers, achieving the return of rural talent and making them leaders in rural Internet consumption.
"Today, agricultural inputs going to the countryside through e-commerce is equivalent to home appliances going to the countryside 3 to 5 years ago. On the one hand, through the Internet brand direct-access approach, small and backward manufacturers can be eliminated, achieving a reshuffling of the pesticide industry. On the other hand, Rural Taobao collaborates with agricultural inputs regulatory authorities on big data monitoring to cut off the entry of counterfeit and inferior agricultural inputs at the source," said Wang Yanzhe.
The "Wangnongdai" (Prosperous Farming Loan) launched by Rural Taobao can grant credit of up to 500,000 yuan to qualifying growers and breeders. When a transaction occurs, it does not go through the grower's or breeder's account but pays the merchant (distributor or manufacturer) directly. The interest rate is borne by the Rural Taobao merchant, the grower or breeder, or shared by both parties. This allows agricultural inputs manufacturers and distributors to receive advance payment early, optimizes the supply chain, and thoroughly solves the chronic problem of credit sales in agricultural inputs. For farmers' regular orders, which are small in quantity, delivery is handled by distributors through Cainiao Logistics. For large-scale growers whose orders reach a certain volume, manufacturers can ship directly.
Post-sale pesticide application service is of paramount importance. On the Rural Taobao platform, branded pesticide manufacturers can post 3-to-5-minute videos introducing their products, avoiding the exaggerated claims currently made by operators in grassroots agricultural inputs stores. Villagers can consult pesticide manufacturers online themselves or through partners for instant answers. Organized by village-level service station managers, well-known agricultural technicians regularly provide villagers with online training on the scientific use of pesticides. The "DingTalk" WeChat public platform has been launched, and partnerships with "Nongyisheng" and others have been established to provide instant Q&A services for online diagnosis of crop pests and diseases and medication guidance.
Tiantianquan builds a alliance circle of farmers
Currently, China's pesticide distribution has too many tiers: 2,700 pesticide suppliers, 60,000 city- and county-level distributors, and 800,000 rural retailers, serving 240 million farming households. On the one hand, this causes terminal pesticide prices to be relatively high and counterfeit or inferior pesticides to harm farmers. On the other hand, production and sales are disconnected, making it difficult for technical services to reach the field.
In contrast, the top 10 pesticide suppliers and top 5 distributors in the United States hold over 80% of market share. Of the 10,000 retail stores across the U.S., 80% are directly operated by national service providers, and a PCA and CCA technical qualification certification and service system has been established. "This is the development direction that China's pesticide industry should pursue, and pesticide e-commerce is the key entry point for achieving this goal," believes Dr. Li Guangze, Director of Noposion.
Tiantianquan has created an alliance circle of farmers through the Internet, centered on farmers, recruiting expert growers as "Tian Ge" (Field Brothers) and "Tian Jie" (Field Sisters) to provide farmers with technical support for planting, fertilization, and pesticide application. Franchised retailers and distributors form regional operating platforms, providing a full set of management concepts and introducing quality products (seeds, pesticides, fertilizers, and agricultural machinery) to enhance their operational and management capabilities. It has launched Nongfadai (Agricultural Development Loan) to provide low-interest loans to large-scale growers, solving the chronic problem of credit sales in agricultural inputs distribution. Ultimately, within this circle, the goals of genuine products, cost savings, and adequate technical services are achieved.
Currently, the agricultural inputs industry exhibits a phenomenon of "neglecting the fundamentals to chase the trivial," with hype around concepts and excessive focus on marketing tactics. "We believe that the Internet can make everything return to its essence, allowing the agricultural inputs industry to focus more on the essence of providing quality products and professional services," said Li Guangze. Through e-commerce (financial) platforms, intermediate links are eliminated, circulation efficiency is improved, distribution costs are reduced, and the industry's chronic problems of high credit sales, high inventory, and low turnover are eradicated. Through continuous optimization of products and solutions, the entire pesticide industry's product range becomes fewer and more refined, allowing farmers to easily master foolproof full-process solutions. Through the concept of crop community service, future agricultural technical services will become more professional, community-based, socialized, and Internet-enabled.
Tiantianquan plans to build 1,000 county-level centers within 3 years, forming a flexible and efficient county-level e-commerce operating platform; create 100,000 brand service centers, improving township e-commerce and community terminals; recruit 1 million expert growers, providing professional services and crop communities; and be able to provide 100 million farming households with quality and affordable crop solutions, thereby ensuring food safety for 200 million families.
Nongyisheng serves as a private health advisor for crops
"Nongyisheng does not do agricultural inputs e-commerce; it only does agricultural technical solutions," said Wang Zhaoyong, CEO of Nongyisheng. Now Nongyisheng is known as the "Baymax" of the agricultural circle, a private health advisor for farmers' crops.
Nongyisheng launched on November 22, 2014. It is a mobile Internet APP whose core function is "quick questions." Farmers encountering routine pest and disease diagnosis and medication guidance can get answers within one minute. According to statistics, farmers now ask over 1,000 questions per day on the Nongyisheng platform, with 6 to 8 answers per question, generating roughly one Q&A every half minute. "Many agricultural technicians report that since Nongyisheng became available, they no longer play mahjong and spend every day answering questions on it, paying attention to pest and disease occurrences, and learning from other experts. An agricultural technician nicknamed 'Bi Laoye' once set a record of answering questions online for 13 hours straight," said Wang Zhaoyong.
The shortfall in agricultural technical guidance services has long been a pain point for farmers and a major reason for pesticide misuse and the prevalence of counterfeit pesticides. Nongyisheng integrates plant protection experts, agricultural technicians, and "local experts" from agricultural inputs stores to provide hands-on, instant online services for smallholder farmers, family farm owners, large-scale growers, and specialized planting cooperatives, achieving open Q&A so that answers are timely, authoritative, and unique, making it easy for farmers to put into practice.
However, the prescriptions that experts provide for farmers inevitably involve related pesticide products. If farmers cannot buy them, it is still of no help. Therefore, Nongyisheng also offers a "nearby agricultural inputs stores" function, connecting front-end Q&A with product information from agricultural inputs retail stores near farmers, enabling farmers to quickly and accurately find suitable pesticide products. In addition, Nongyisheng offers a "verify authenticity" function, allowing farmers to identify the authenticity of pesticides by scanning QR codes or barcodes, preventing them from being deceived.
"The emergence of Nongyisheng means the last-mile problem of agricultural technology extension can be solved with a swipe of a finger," said Wang Zhaoyong.
Qingting Nongfu: from one-off deals to one-stop service
"Just like hailing a ride with a mobile phone in the city, farmers only need to place an order on Qingting Nongfu, and we take care of the rest," said Wu Chengwei, General Manager of Kesheng Group. They will first send experts to conduct on-site diagnosis and prescription, then have a professional team carry out smart spraying.
Qingting Nongfu is positioned as a platform e-commerce company, serving new agricultural business entities and government organizations, enabling online transactions of agricultural services, providing public-interest agricultural technical consulting, and promoting one-stop outsourcing of agricultural science and technology services. The agricultural services it provides include agricultural cultural creativity, agricultural planning, smart spraying, video diagnosis, agricultural IoT, soil remediation, brand agricultural inputs, and agricultural product marketing services.
"As a traditional pesticide formulation enterprise, our making such a big turn is based on our judgment of the agricultural development situation," said Wu Chengwei. According to Ministry of Agriculture statistics, China has over 600,000 villages, with 1.4 million farmers' professional cooperatives and 4,700 national-level cooperatives, equivalent to 2 cooperatives per village. The target customers for agricultural inputs sales have begun to change. Pesticide enterprises need to shift from the single one-off deal of pesticide production and sales to one-stop pesticide services. Therefore, Kesheng proposed the concept of agricultural services relatively early.
"China's agriculture faces a bottleneck of sustainable development. The fundamental way out for agriculture lies in mechanized operations and professional services," believes Wu Chengwei. It is necessary to make smart machinery a core capability of agriculture and make interconnectivity the infrastructure of agriculture. Qingting Nongfu uses smart spraying equipment to collect agricultural big data, such as crop types, application quantities, and the impact of climate factors, to build scientific models that guide pesticide application, thereby supporting pesticide zero-growth.
Currently, enterprises such as Kingenta, XAG, Wuxi Hanhe, and Shandong Yongjia have joined Qingting Nongfu. Within the next 3 years, Qingting Nongfu plans to select 50 major agricultural prefecture-level cities in rice-growing regions, build 300 county-level service centers and 1,000 township-level service stations, covering at least 10,000 villages, making farming go from toil to happiness for farmers.