E-Commerce In Agriculture Marketing- A New Frontier

E-Commerce refers to the buying and selling between parties involved, in case of both services and goods. It also involves payment accomplishment of the goods and services via an online platform (electronic means).  People also call it internet retailing. Electronic National Agriculture Market (e-NAM) constitutes a perfect example of e-commerce in the realm of agricultural marketing in India. It can be differentiated with popular e-commerce as it only involves B2B trade where general e-commerce involves mainly B2C trade.

As per a report by Euromonitor, per capita spending on Internet retailing doubled between the year 2013 and 2014. This process had repeated itself once again in the year 2014 to 2016, where it started from Rs 508 and reached up to Rs 1117. Rising internet uses and penetration of smartphone had been the main reason behind it. Rising aspiration, greater consumer awareness and easy payment options had also helped it in a big way. The best part is that growth is fuelled by both Urban and Rural involvement. E-commerce trade has not only gained popularity among teenagers and young adults but it also gained popularity among young school goers, mid and late lifers.

E-Commerce presents an advantage to both consumers and sellers. It eliminates most middlemen and inventory reduction which makes it easy for a seller to pass on the benefits to consumers at low prices. For consumers, easy delivery becomes an advantage with low prices while, on the other hand for sellers, cross-boundary selling gives multiple benefits, thereby making it a saviour of search reduction and negotiation costs as well.

It has been successfully used by few enterprising people in agricultural marketing as well. For instance, Big Basket, an online grocery portal, books orders from online consumers and delivers sorted and cleaned groceries, vegetables and fruits to them. Giants like Godrej natures Basket and Grofers are also doing the same, while global giants like Amazon are eyeing for the potential in the market. It may though be limited to tier one or two cities only.

This can though be identified as an area with immense potential for agricultural marketing, which is highly suitable for markets of exotic fruits, vegetables, grains, spices and selective organic food. This innovative model can drastically reduce middlemen costs from the supply-chain and can make a good connection between farmers and consumers. It can bring niche products to nationwide markets. Agriculture, especially horticulture produce belonging to niche and speciality segments, produced in relatively low quantity in remote geographies. Farmer Producer Organisations involvement in such niche segments is required to give it a multi vibrant market presence.

Agri-marketing can benefit immensely from e-commerce both in B2B and B2C markets. While e-NAM is the government driven government has promoted private players such as Big Basket to fill the gap of the B2C market through policy initiatives like direct purchase and e-trading. Private players may be procuring from bot Mandi’s and farmers, however, they will be more benefiting from setting up an entire channel of the supply chain where they can procure easily from farmers. This may lead agriculture market to gain immense speed. Tax enablers and free movement between states may also be of great use, though GST can become a great supporter in this field. E-retailers engagement with FPO’s may bridge technological gaps and bring more effective and general use of technology. Giving consumers a quality out-put and farmers and retailers a far better price.

(With Inputs from FICCI knowledge report on agriculture marketing a way forward)