e-commerce of seed industry
Raja Vadlamani: Head of Supply Chain-Asia at Seedworks International Pvt. Ltd.
Currently, the overall development of e-commerce of the seed industry can be summed up in three words: small, primitive and slow. E-commerce of the seed industry is generally in its infancy and entrepreneurship stage, without large-sized projects and high market awareness. Although The combination of seed industry and e-commerce develops at a slow speed, it has a promising prospect. This is a kind of social tendency, so this new industry will develop quickly and prosperously in the future. India has around 35% of internet users as of date mostly urban.
The most important advantage of e-commerce is to achieve the linkage between production and sales. In the traditional marketing chain, the transfer of the industry’s maximum profit occurs in circulation process. However, this can be changed by e-commerce. Farmers are able to gain more benefits by enjoying ex-works price and experiencing service of enterprises’ technical devices directly. E-commerce provides an open and transparent platform to realize the products’ tractability. This can not only avoid infringements, but also promote fair competition, which is conductive to the industry’s sustainable and healthy development.
Once the e-commerce platform for the seed industry appears, the retailer's profits are distributed to farmers, enterprises and the platform respectively. How to change the retailers into delivery business and service providers will be the key to the e-commerce of the seed industry’s success. Because of the conflict of interest, many retailers and agents will resist the e-commerce of the seed industry. As a result, the e-commerce of the seed industry should be promoted with some new products in some specific areas.
Based on the current situation, seed channels account for a large part of the seed sales profits, with 50% of the total profits. Seed enterprises are engaged in researching and marketing. Deducting their production cost, compromise on lesser margin for a bag of seeds.
From the point of logistics, capital flow and information flow to investigate agricultural industry, it is not difficult to find out that the stuttering of information is the most obvious, leading to low efficiency of the industrial chain. Internet information technology and e-commerce platform have a brilliant future. Although the scale of rural Internet users is growing rapidly, all kinds of agricultural websites are experiencing hard times, either difficult stage or pioneering stage with many problems to be tackled. As a next market space that is unknown to people, agricultural e-commerce is the target of agricultural enterprises and the Internet giants depending on their own advantages and various ways to develop markets.
No one can deny the correctness and forward looking of e-commerce’s moving into agricultural field. However, e-commerce’s development in agricultural field in rural ares must be different from that in other fields. It should develop gradually instead of developing dramatically. As investors and participants, without adequate understanding of the particularity of agricultural field and sufficient preparations of mode, capital, technology and psychology, they should not invest as much as possible to expand their industrial size and markets in order to avoid great losses.