Agri E-commerce is Providing Opportunity to Streamline the Agricultural Value Chain
E-commerce refers to the buying or selling of services and goods between parties. It also includes payment accomplishment of the goods and services through an online platform, also known as internet retailing. In India, Electronic National Agriculture Market (e-NAM) constitutes a perfect example of e-commerce in the realm of agricultural marketing
Traditional agricultural value chains involve multiple intermediaries between consumers and farmers. Typically, farmers sell their produce at the doorstep of middlemen. Produce then passes through various intermediaries before reaching the end customer. As a result, farmers receive only a small amount as each intermediary in the value chain earns a margin. Agri e-commerce provides an opportunity to reduce inefficiencies and streamline the agricultural value chain in the distribution of farm produce. It represents a new way for farmers to sell their produce to an array of buyers, including agri retailers, businesses, consumers and restaurants. Agri e-commerce also adds transparency and increases farmers’ access to new markets to enhance the value chain. It enables farmers to bypass several intermediaries, resulting in higher income for the farmers, reduced wastage, and the potential to deliver fresher produce to customers. Such benefits are especially significant in developing regions, where more than 97% of people employed in agriculture live and where the sector’s contribution to GDP is in double digits.
Mobile operators can play a central role in the emerging agri e-commerce space. Mobile operators are growing participating in both agriculture and e-commerce segments, owing to launching their own products and working in partnerships. This emerging opportunity in agri e-commerce is a key strategic consideration. The usage of operator-led mobile money services into agri e-commerce platforms can increase mobile money adoption and integrity by meeting the demand for digital payments. The development of the agri e-commerce ecosystem requires government ministries and regulators to establish an enabling regulatory environment. Government ministries can further support agri e-commerce businesses by supplying information on local farming regions and holding events to raise farmer awareness of agri e-commerce opportunities.
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The last two decades there has been significant growth in e-commerce. Global retail e-commerce sales are now esteemed at around US$3 trillion2 and continue to grow rapidly. In 2018, e-commerce sales accounted for 11.9% of all retail sales worldwide, a figure is projected to reach 17.5% in 2021. This growth is determined by a number of factors. These include growing internet adoption, shifting consumer preferences, and ever-improving delivery options. For buyers, e-commerce offers a more convenient way to purchase goods and services, while also providing more choice and better deals.
