The need for e-commerce has increased extensively, with the increasing penetration of e-commerce and digitization mode of businesses. Agricultural e-commerce offers an important opportunity for cost reduction and demand enhancement of products. In recent years, more and more smallholders in developing countries such as China have begun to sell agri products directly to consumers via online shops from a third party trade platform.
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Global Agricultural E-commerce Market – Dynamics
Competition among players operating in the agricultural sector has increased strongly in the past few years. Offline sales have increased the pressure of cost, supply chain, and intermediaries within the whole ecosystem. E-commerce is an efficient tool for micro and medium size businesses. This has helped sellers to reduce the transportation cost and also enabled access to untapped markets.
Increasing Adoption by Smallholders
It is increasingly clear that e-commerce has become a new and effective way of helping smallholders gain access to the market. E-commerce has empowered smallholders to sell most of their products at a higher price than before because of the elimination of the price squeeze from intermediaries and the marketing constraints of information asymmetry. The adoption by small holders is driving the growth of the agricultural e-commerce market.
Unawareness and Poor System Infrastructure
South America and Asia Pacific which are fastest growing regions face strong technological and digital gaps within the agricultural industry. The level of awareness among farmers or small sellers and the network infrastructure to smoothly run agricultural e-commerce at remote locations is not very effective. Unawareness about agricultural e-commerce and poor network infrastructure is hampering the growth of the market.
Asia Pacific to Dominate the Global Agricultural E-commerce Market
In terms of region, the global agricultural e-commerce market can be divided into North America, Europe, Asia Pacific, South America, and Middle East & Africa. Asia Pacific is expected to dominate the agricultural e-commerce market during the forecast period due to its strong dominance in the agricultural industry and increasing adoption of e-commerce platforms for selling agricultural products.
COVID-19 Impact on the Global Agricultural E-commerce Market
The COVID-19 pandemic is expected to moderately impact the global agricultural e-commerce market for a short-term period. The gap within the supply chain and transportation has been affected adversely due to the lockdown in almost every region. Sudden stoppage of transportation service have led to huge losses to e-commerce platforms. It is expected that COVID-9 will impact this market till the 2020 year end.
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Global Agricultural E-commerce Market – Competition Landscape
- In July 2018, Indian Farmers Fertiliser Cooperative (IFFCO) partnered with Singapore-based technology firm iMandi to start an e-commerce platform for farmers with an investment of about US$ 10.5 Mn.
AgriBegri Trade Link Pvt Ltd
Established in 2016, MIE Soluti AgriBegri Trade Link Pvt. Ltd provides seeds, fertilizers, pesticides, plant growth regulators, and irrigation and farming tools and equipment that are required in agriculture through an e-commerce platform.
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