Developing the Internet Plus agriculture model: brand building is key

How does the Internet add value to agriculture? In recent years, through follow-up investigations in Suichang and Lin'an in Zhejiang, reporters found that brands play a unique role in this and must be given great attention.

Suichang and Lin'an are both mountainous counties and cities, and were among the first to explore the e-commerce of agricultural products, serving as two banners in southern and northern Zhejiang. However, because the former takes region as its core appeal and lacks industry brand leadership, although it was the first county-level pavilion to launch on Taobao's “Special China” section, actual sales have struggled to improve despite its fame; the latter, by contrast, uses the hickory brand as its guide, driving agricultural transformation and upgrading.

Experts believe: the comparison between Suichang and Lin'an shows that rural economic e-commerce within a county area needs strong brand support, and a fully positive interaction should be formed between e-commerce and branding.

⟦NL> Suichang: plenty of local goods but lacking brand support

Suichang is located in the mountainous area of southwestern Zhejiang, with a beautiful ecological environment and abundant agricultural specialty products such as bamboo charcoal and roasted sweet potatoes. But because it is remote, its products find it hard to leave the deep mountains.

The arrival of the Internet era broke the limits of time and space, giving a mountainous county like Suichang an opportunity to overtake on the curve. Since 2005, some people in Suichang have been selling local specialties on Taobao, but because the vast majority of local specialties are non-standard products, consumers had doubts, and online sellers' operating capacity was limited, so transaction volume remained low.

In March 2010, initiated jointly by the county Youth League Committee, the county Administration for Industry and Commerce, the county Economic and Trade Commission and several other departments, Suichang established an online store association, with the purpose of providing many online stores and suppliers with a service-oriented public platform for “information sharing and complementary resources.”

The association's exploration provided a fast channel for many of Suichang's agricultural products to “go electric.” In 2013, Taobao launched the “Special China” channel, and Suichang got there first, becoming the first county area in the country to launch on it. For a time, Suichang became famous, attracting an endless stream of people from all sides to observe and learn from it.

Over several years, Suichang held a series of activities such as online sales of red grape and high-mountain pork, and although each time it claimed great success, the data showed that actual transactions were not satisfactory. Afterward, as agricultural product e-commerce rose in various places one after another, competition in the online market became increasingly fierce, and many regions caught up from behind, making it hard for the “Suichang Pavilion” to attract attention again.

Lin'an: brand-led transformation

Unlike Suichang's model of building a public service platform as the e-commerce engine, Lin'an successfully achieved a brand breakthrough through “Lin'an hickory,” thereby leading the transformation and development of the entire rural economy.

After 2009, influenced by the e-commerce atmosphere, traditional agricultural enterprises in Lin'an rushed to open online channels, and online brands suddenly emerged. Qu Jiang, deputy director of the Zhejiang University CARD Rural E-commerce Research Center, summarized the characteristics of Lin'an's e-commerce development as from “one product” to “one belt.” “Product” is both brand and category: from Lin'an hickory as a geographically indicated specialty product to the establishment and influence-building of a regional public brand, Lin'an gradually fully e-commerce-enabled the hickory industry and expanded into the nut and roasted snack category; “belt,” as the name suggests, means an industrial belt with clear division of labor from planting, processing, sales and operations to marketing, forming a regional division-of-labor layout.

After 2013, Lin'an entered another stage——building an e-commerce ecosystem. From infrastructure construction represented by e-commerce parks, to the introduction of service providers, from taking the lead in establishing industry associations, to the construction of an e-commerce talent training system, as well as the introduction of various supportive and preferential policies, Lin'an's e-commerce entered a period of rapid expansion. The government, service providers, industry associations and various business entities formed an organic interaction.

The reporter's interviews found that the development of e-commerce not only sold out Lin'an hickory, but also drove other agricultural products to “go online,” while promoting the development of related industries such as product packing, customer service, packaging and logistics, providing villagers with more employment opportunities. According to statistics, Lin'an's 1,100 nut online stores alone can drive employment for more than 5,000 people.

Brand building is key

At present, “Internet Plus agriculture” is sweeping across various places, and many people in the e-commerce field believe that e-commerce does not recognize brands, only sales volume, because the creation of online brands can no longer be operated through traditional paths. Often a brand can be created in a short time, and a brand can also be destroyed, and having sales volume equals having a brand.

By comparing the e-commerce practices of Suichang and Lin'an, it can be found that although the e-commerce in the two places started almost simultaneously and both are famous, actual sales are worlds apart. Although there are various reasons, the key is that Suichang has no regional brand leadership, while Lin'an has the hickory brand as a trigger, thereby leading the transformation and upgrading of the entire agricultural economy.

Qu Jiang analyzed that Suichang is rich in ecological agricultural products, but lacks industrial clustering and has difficulty finding a flagship product, resulting in very weak visibility and influence. Even though the Internet can break geographical boundaries and let a small mountain village reach the big world, without strong brand support, it is almost impossible to attract enough consumer interest and get orders.

“There is a rule in the creation of online brands: through the explosion of a single product, the entire online store is then driven to sell well.”

Lin'an's practice precisely confirms this rule. The city took hickory as its breakthrough point, and through the joint interaction of regional public brands and enterprise brands, quickly won consumers' attention and recognition. On this basis, it then vigorously promoted local specialties such as bamboo shoots and small fragrant sweet potatoes, and added specialties to tourism to form a deeper product understanding.

Data show that in 2014, on Alibaba's retail platform list of county areas by agricultural product transactions, most of the top ten had regional brand support, or had distinctive flagship products with both market share and visibility. Expert analysis also believes that in the future, “three products and one label” products will account for more than 80 percent of all e-commerce.