Workshop Project Report 

Project Information

Rationale

Agri-food supply chains generally involve multiple intermediaries between farmers and consumers. Farm gate products pass multiple layers and stakeholders before reaching the end of the customers, resulting in higher values and prices which, in most cases, do not return to farmers. E-commerce can provide a platform for farmers to directly sell products to different types of buyers, such as processors, retailers, restaurants, and consumers. It gives a direct return of the sales to farmers providing a positive cycle of higher farmer income, more capitals reinvestment and higher production efficiency. Most small-scale farmers lack the knowledge and capacity related to e-commerce technology and operation, as well as the business skills to manage purchase orders, trading risks, and other B2B and B2C activities. In addition, agri-food e-commerce is much more challenged and complex in logistics and delivery systems than other types of products such as electronics and houseware. Many of the international or domestic e-commerce platforms were established for none-agri-food products and may not be able to be applied directly to agri-food business. During the COVID-19 pandemics, the city lockdown and limitation of human movement and contacts have stimulated rapid development of agri-food delivery systems that helps to fill the gaps of agri-food e-commerce. Therefore, the agri-food e-commerce is the highlight of the 2022 DFNet II workshop. The workshop includes a one-day international forum and a half-day farmers workshop. The forum invited international speakers to discuss the recent development of agri-food e-commerce and their challenges and opportunities for tropical fruit growers at local and regional levels. The farmers workshop discussed e-commerce platforms, capacity requirement and available resources for farmers to further receive trainings or practice e-commerce.

Objectives

• Exchange knowledge and information on agri-food e-commerce development, challenges, strategies and opportunities for tropical fruit farmers at domestic and regional levels.
• Share experiences and views on various agri-food ecommerce models (B2B, B2C, C2C, C2B, and O2O ).
• Introduce entry points of agri-food e-commerce and capacity development program for famers.
• Enhance informed decisions for farmers to participate in online business.

Themes

Day 1: International Forum on “Challenges and Opportunity of Agri-Food e-Commerce”

Day 2:  Farmer Workshop on “Agri-Food e-Commerce: Farmer, Private, and Public Perspectives”

• Session 1 – E-Commerce Resources and Market Strategy
• Session 2 – Agri-Food e-Commerce: Farmer Perspectives

Workshop highlights

Five speakers from four countries (Belgium, Japan, Korea, Taiwan) were invited to present an overview of agri-food e-commerce and its development and challenges from country and business perspectives in Day 1. Three speakers and five farmers shared their experience in Day 2. The presentation materials include 8 PPTs, 8 papers, 9 videos. Key takeaways were summarized by presentation:

Day 1 – International Forum

Dr. Fan-Chan Tai, CDRI, Taiwan (S1): An overview of domestic and international agri-food e-commerce was introduced from the traditional channels to the modernization of chain-store supermarkets and the recent surge of e-commerce. Dr. Tai compared the developments of agri-food e-commerce among Taiwan, U.S., Southeast Asia and China under the ongoing COVID-19 pandemic and concluded with three tentative strategies to further improve the inadequacies of the agri-food e-commerce service. The strategies include: (1) the application of livestreaming and interactive technologies; (2) the strengthening of online farmer’s markets; and (3) the development of WaaS/TaaS (Warehouse as a Service/Transportation as a Service) as infrastructure for agri-food e-commerce.

Mr. Hando Choi, Kurly, Korea (S2): While e-commerce has been naturally integrated into a part of daily routine life activities, it has yet to be applied at scale into the food and beverage sector, especially the grocery category. Market Kurly, Korea’s pioneering online grocery retailer start-up, has largely revolutionized the landscape of Korean grocery market. By developing its own cold chain supply chains and actively collaborating with wide range of producers in Korea, Kurly’s revenue has surpassed 2 billion USD since its establishment 7 years ago. Kurly’s next step is to leverage the power of “Big Data,” collected from producers, suppliers, distributors, and consumers, as a decision-making database through which Kurly expects to forecast produce market prices and to advise farmers in advance to adjust crop sowing and yield planning to gain a better market flexibility and advantages.

Mr. Shinji Ohta, Creative House, Japan (S3): Due to advancement of IT technology and dynamic lifestyles of consumers, e-commerce businesses are growing rapidly in Japan. To make e-commerce business successful, key factors including product value, marketing, media control and customer list etc., should be taken into consideration when farmers intend to initiate their own e-commerce business. Currently, it is not probable to replace and transform traditional wholesale distribution channels into internet shops because older generations are not as familiar with internet as younger generations are. Despite existence of various challenges in e-commerce business operations and management, traders can still make benefits by increasing consumers’ confidence on food safety through relevant and transparent information directly and immediately shared on the e-commerce platform. It is anticipated that e-commerce will also give farmers more opportunities to exploit more new marketing channels and to acquire new customers than ever.

Mr. Sean Chou, ZESPRI, Taiwan (S4): Traditional channels dominate the fruit category with over 70% market share per year, however online shopping of all categories is projected to grow steadily at a CAGR of 7.2% over 2025 while the growth of Food & Beverages is much higher. It is suggested that lacking in store experience and uncertain product quality are the major concerns when consumers shop online. Several forms of e-commerce business models are introduced and explained, which are (1) O2O fruit shop, (2) livestream, (3) CVS, (4) retailer O2O, (5) fruit specialized EC, and (6) B2C. These business models arose and evolved to adapt to the fast-evolving consumer shopping behaviors. In Taiwan, retailer O2O and livestream models are growing faster, however customer loyalty is low with frequent switch among various e-commerce platforms. It is suggested that there should be more investments in cold-chain supply and transportation service as this will ensure high-quality agri-foods and could be helpful in building and solidifying customer loyalty.

Mr. Patrick Bauwens, Aucxis, Belgium (S5): Aucxis, since founded in 1983, has been dedicated to develop auction solutions for fruit, vegetable, fish, cattle and flower auction trade. Nowadays, Aucxis has three business units, E-Trade, Process Control Systems, and RFID respectively, combined to fulfill various automation requirements in global auction industries. To better connect agri-food supplier and buyers in the B2B digital auctions, E-Trade integrates three principles to implement a real-time lot-by-lot selling method, which are Falling clock/price principle, Rising clock principle, and bidding principle. The driving factors for a successful digital trading platform in the B2B auction are, (1) constant supply of fresh high-quality products, (2) clear and consistent product quality and description, (3) product category standardization, (4) abundant buyer participants, and (5) convenient and efficient transportation service. As already mentioned by other speakers, in the future direct logistic flows between large growers and buyers are expected to become a mainstream, despite the over 100 years existence of the auction site as the main distribution site. The next step is to increase transportation efficiency to prevent unnecessary and extra logistic arrangements to cope with the transition of trading market into direct-selling mode and to bring positive impacts on the environment (decreased CO₂ footprint, traffic jam etc.).

Day 2 – Farmer Workshop, Session 1: E-Commerce Resources and Market Strategy

Ms. Maggie Chen, The Wonderfulfood, Taiwan (S6): The Wonderfulfood is a fast-growing agri-food e-commerce company in Taiwan. By collaborating with over 1,000 small farmers in Taiwan and selling agri-food of consistent high-quality overseas, The Wonderfulfood has already accumulated 300,000 global members. Implementing package grading and quality control of the agri-food immediately after the harvest, then the packaged agri-food products are delivered directly to the oversea consumers according to the purchase orders from its own e-commerce platform. Recently, The Wonderfulfood launched two e-commerce platforms, International Mall and Taiwanese Mall, to expand the market share of Taiwanese agri-foods in the global market. In addition, The Wonderfulfood also aims to assist Taiwanese farmers to develop brand strategy and to conduct digital transformation to gain and transform attentions from consumers and markets into sales orders.

Mr. Cheng-I Wang, Kaohsiung City Government, Taiwan (S7): Kaohsiung is the main vegetable and fruit production area in Taiwan. It produces fruits such as honey jujube, guava, plum, and lychee, etc. To alleviate production and marketing pressure in peak harvest season, Agriculture Bureau of the Kaohsiung City Government decided to authorize Kaohsiung City Farmers’ Association to establish an e-commerce platform, “The Best of Kaohsiung”. This platform combines and integrates channels of farmers’ associations, fishery associations, cooperatives, young farmers and agriculture-related enterprises in Kaohsiung, as well as I/O information flows of finance and logistics, for a better order-delivery-receive operation efficiency. Since its establishment in November 2019, the monthly average sales revenue in 2021 is getting close to 1 million NTD (equal to 33,000 USD) and continues to grow until now. The Best of Kaohsiung is the first e-commerce platform through the Public-Private Partnership (PPP) mode between local government and farmers association in Taiwan. Fee items such as distribution and operation, which are normally charged by commercial platforms, are exempted for farmers. Further, The Best of Kaohsiung will regularly allocate 30% of its revenue surplus per season, as a charity donation fund, to benefit the vulnerable and disable.  

Ms. Alice Huang, NASME, Taiwan (S8): Various modes and models of Taiwan agri-food e-commerce development were described. The COA (Council of Agriculture, Executive Yuan, Taiwan) funded project on “Training and Extension Project of e-Farmers”, is conducted by the National Association of Small & Medium Enterprise. Farmers in Taiwan are very interested to join e-commerce business and hope to increase revenue. The e-Farmers Project is an available resource including consultant service for farmers to learn the concept and skills to start their e-commerce businesses. The Association also offers brand guidance service to those farmers who hope to strengthen competitivity and expand current business scopes.

Day 2 – Farmer Workshop, Session 2: Farmers perspectives and panel discussion

This session invited 5 farmer representatives in Taiwan to share their views and was moderated by Branch Director of TARI-Fengshan, Dr. Wen-Li Lee. The key discussion points were summarized below:

Point 1. Before involving in e-commerce, fruit farmers sold most of their produce to wholesale and local markets. The quantity of the produce sold may be larger, but the net profit is relatively low. With the recent advancement of e-commerce, farmers can opt for e-business by themselves or collaborate with private companies. The net profit is higher even though the quantity of total sale is lower. In addition, with the introduction of automatic weight-grading mechanism and cold-chain treatment, the profit can be increased further without further labor input and reduce food wastes causing carbon emission.

Point 2. During the COVID-19 pandemic, it is suggested that farmers can maintain reasonable profit by diversifying sales channels including e-commerce, supermarket, auction market, wholesales market) and using grading, to reduce the impact from price shocks. The first step is to choose appropriate varieties according to consumer and market demands rather than the convenience of production management. Of-course we should also take into consideration the production factors, such as inputs, cultural management, practice certification, and safety regulations. E-commerce can help to maximize profit and diversify marketing channels domestically and internationally. However, before the e-commerce business payoff, we need to be patient and continue to provide quality and consistency of products as this is a “MUST” in order to gain consumers’ trusts and achieve good brand reputation.

Point 3. Increased diversity of agri-food products would enhance consumers’ choices that attracts more online shoppers; however, it would add complexity and input costs to producers. Contrary to single crop harvest business, introduction of more fruit crops to maximize grading machine utilization efficiency, and investing agri-food processed equipment, is suggested to offer more permanent jobs, rather than part-time contracts during the peak season only. This improvement in the labor working condition not only provides a stable income, but also contribute, as a way of corporate social responsibility (CSR), to the local rural economics. Agricultural production is seasonal. It requires more labor during the peak seasons to help in harvesting and packing. It is critical that the farm owners establish standard procedures and coaching system for the newly hired workers, particularly those inexperienced young people, to quickly adopt the procedures and deliver quality work.

Point 4 . In-time advertisement of newly listed and diverse products, effective reach to target consumers, and efficient customer service rely on good cooperation between producers and e-commerce operators. Producers (farmers) can also develop their own e-commerce platform to increase marketing channels and publicizing their products and brands, however, the panel group suggested that producers focus on the supply side (production, harvesting, packing and product quality) and e-commerce platforms take care of the market side (order, delivery and customer service).  

Suggestions and conclusions

• Capitalize on the potential of the e-commerce business to enhance farmers’ income and entry into global markets.
• Maintain consistency in quality and supply as this is the key to the success of agri-food e-commerce. Grading and cold-chain facility are also the basic elements to ensure good quality of perishable agri-food products.
• Inculcate to farmers to always consider the quality and amount of their harvest and strategically participate in various marketing channels including auction, wholesales, and e-commerce, to maximize the sales revenue and decrease warehouse pressure and waste.
• Teach farmers to initiate their own agri-food business by thinking of a good branding strategy as this can overcome the challenges of smallholder farmers’ entry into bigger scale of business. Consumers are always concerned about product brands while doing online shopping.
• Pay attention to disproportional development and progress of e-commerce business among countries as these indicate the necessities of information and experience sharing on e-commerce supporting system including infrastructure, IT, logistics, and joint efforts from the government and private companies.

Outcomes:

281 people registered for the workshop, including participants from Taiwan (23%), Philippines (22%), Malaysia, Indonesia, Vietnam and India. About 30% of those belonged to the private sector. Among the registrants, 186 were from the public sectors, 83 from the private sectors, and others from research institutes, universities and international organizations. The online workshop was livestreamed and broadcasted on two platforms, the Cisco Webex Event (Max. 1,000) and the FFTC Facebook pages where simultaneous translation service was provided. The 2-day Facebook video stream reached more than 500 views during the workshop, showing the successful promotion of this international workshop activity. The Feedback form was circulated to the registered participants immediately after the workshop. Nearly all respondents were very satisfied with the workshop in all aspects (content, relevance and logistics). Overall, the workshop was regarded as successful in terms of planning, coordination, and execution.

Workshop videos can be watched at:

Chinese channel:

Day 1 - https://www.facebook.com/fftc.org.tw/videos/1589449464870676

Day 2 - https://www.facebook.com/fftc.org.tw/videos/377166304328072

English Channel:

Day 1 - https://www.facebook.com/fftcforasiaandthepacific/videos/1289019118288190

Day 2 - https://www.facebook.com/fftcforasiaandthepacific/videos/320911276814284

More information can be viewed on the workshop website:

https://km.fftc.org.tw/workshop/2