E-commerce grows in the field

 

About 40% of all farmers consider digital security to be the main barrier to online shopping (Credit: Tevarak)

The unexpected pandemic of Covid-19 accelerated the change in a consumer habit that, even before it became almost mandatory, was gaining more and more fans in Brazil: the substitution of purchases in physical stores by e-commerce platforms. A survey conducted by the Brazilian Chamber of Electronic Commerce points out that the volume of virtual purchases grew 98.74% in the country in the comparison between April 2019 and this year – the first full month of social isolation – exceeding R $ 9.4 billion in revenue. From clothes to the weekly fair, almost everything started to be sold virtually. The Brazilian agribusiness chain, which, in general, has already experienced the gradual increase in the use of digital sales channels, must observe a period of exponential growth. The pace, however, could be much stronger if it weren’t for the bottlenecks with infrastructure, digital security and problems with the user experience with the platforms.

With less than 10% of the grain planted area with access to 4G, talking about 5G in the field seems an impossible dream (Credit: Istock)
IstockIn a study entitled “The Brazilian Farmer’s Mind in the Digital Era”, McKinsey and Company points out that 36% of Brazilian producers consulted between January and February this year usually make purchases online for the farm, against 24% in the United States. “Even before Covid-19 there was already a great appetite for the local producer for the use of these new means. I believe that the interest in technological alternatives for the purchase of goods and production flow should increase exponentially after the pandemic ”, says Nelson Ferreira, a senior partner at McKinsey.
“We ended up buying the inputs and everything needed on the farms via phone and WhatsApp”, ” Gabriela Globo, Estancia do Diamante

Despite the general disposition of the national producer, one of the main difficulties for the implementation of a robust e-commerce is the access to technology itself. According to the latest Agricultural Census conducted by the Brazilian Institute of Geography and Statistics (IBGE), more than 70% of rural properties do not have any type of Internet connection. This means that more than 3.6 million farms in the country still live in the analogue era, and of the more than 7.6 thousand inhabited rural areas, only 800 are already on 4G network. The goal of the Ministry of Science, Technology, Innovations and Communications (MCTIC) is to increase the number to around 1,400 by the end of 2023. With less than 10% of the grain planted area with access to 4G, speak of 5G it seems impossible dream. “In order to remain competitive in the global economy, Brazil needs to make a technological leap from the gate inwards and the gatekeeper out too,” says Robinson Cannaval, founding partner and director of the Innovatech Group.

Limited access on one side, plenty of mistrust on the other. Although the number of rural households where at least one person accesses the network has grown by 22% to 3.9 million properties, according to the 2018 IBGE, around 40% of producers say that the perception that online channels are insecure prevents them from considering having presence on digital channels. It is this same distrust that makes some rural owners choose not to be connected. The founder of Estância do Diamante, Gabriela Souza Gobo, 27, faces a typical situation of this scenario at home with her father, the rural producer Eliseu Gobo.

The family owns a farm and two cattle farms in the city of Jundiaí. “If I tell my dad that I’m buying something online, he’ll be surprised. At 57, it was only now, during the isolation caused by the pandemic, that we managed to convince him to have a cell phone ”. Resistance does not come only from the patriarch. “Everything that is done on the farms is very familiar. This explains the fact that we do not make purchases online and do not bring so much modernity to the management ”. On the farm, the only digital channel for making any commercial transaction is the telephone and whatsapp, a tool used by about 85% of farmers, according to a McKinsey study. “We ended up buying the inputs and everything needed on the farms via phone and WhatsApp, as we already know the contact and the companies with which we have a relationship,” says Gabriela.

“To be successful, electronic commerce needs to maintain the form of relationship that agribusiness is already used to” Rafael Sant’Anna, Agrofy Brasil (Credit: Disclosure)

Despite the resistance of part of the sector, medium-sized producers have already seen e-commerce as an efficient alternative to physical sales. The point is that the complexity of the work is not always taken into account in the planning phase and many give up for lack of knowledge or structure. When creating their own e-commerce, the farmer needs to have a robust platform to withstand the flow of visits to the site, guarantee an efficient visual communication combined with the user’s easy navigation, make a good curation of the products he wants to exhibit with an appropriate price, track the product from stock to final delivery and still create an efficient after-sales service with a customer service structure capable of clarifying all types of questions that arise. It is a lot of work in front of the computer, for those who have the vocation of growing plants or raising animals.
To help producers enter this new world, companies specializing in e-commerce with a focus on agribusiness such as InstaAgro do Brasil are beginning to emerge. The founding partner, Daniel Bachner, says that the platform started as an e-commerce, but given the high demand, it became a marketplace. The difference is that while in e-commerce the entrepreneur produces the merchandise he is going to sell and takes care of the whole process from sale to delivery, as a marketplace, he becomes an aggregator of several stores facing the field allowing the user to buy in more than one store, paying for all items together. “We changed the business model to better meet the great demand of producers who were outside the virtual world and who now want to be part of this medium”. The platform, which has been on the market for more than three years, recorded a 300% increase in revenue in the last 12 months. “The traffic on our platform has quadrupled. We had to reinforce the SAC team with more agronomists to better serve our audience, ”says Bachner.

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“We changed the business model to meet the great demand of producers who were outside the virtual world and who want to participate” Daniel Bachner, InstaAgro do Brasil (Credit: Disclosure)

Attracted by the potential demand of the field for digital commerce services, the Argentine sales channel Agrofy decided to invest in the country. “We arrived here in 2018 and we were registering an average growth rate of 22% in online traffic, which allowed us to arrive in 1.6 million visits in the month. With the pandemic, the evolution rate rose to 38% ”, says Rafael Sant’Anna, country business manager for the company. If it depends on the statistics compiled by McKinsey, the speed of business should remain as, according to the survey by the consultancy, 33% of the total farmers are willing to buy seeds, fertilizers and pesticides online for the next two crops.

Sant’Anna warns that in order for a digital commerce channel to work, it must be concerned with providing a pleasant and coherent journey for those who use it. “Our business model seeks to generate no disruption in the distribution chain. On the contrary, to be successful, electronic commerce needs to maintain the form of relationship that agribusiness is already accustomed to ”. Currently, the company sells 17 categories of products and services including the sale of grains, sugarcane, coffee, cotton, livestock, fruit and vegetables, even equipment.

The businessman and farmer, José Nunes de Faria Júnior, 41, is one of the enthusiasts of virtual shopping. “From inputs to small equipment, I buy several items for my farm through online platforms”. For him, the benefits are many. “E-commerce brings numerous advantages, such as the autonomy to choose what I want without interference, even the ease of not having to move to the place to purchase the necessary items”, he concludes.

Where there is demand, there are opportunities. Whether via own e-commerce, or inclusion in marketplaces, there is room for rural producers to compose their income with virtual sales. “Although the growth of e-commerce has been driven by the pandemic, small and medium-sized rural producers need to see it as a relevant trade channel. Those who do not see the online world as an opportunity for revenue are already behind schedule ”, says Felipe Brandão, executive secretary of the Brazilian Chamber of Electronic Commerce. After all, the good salesperson is where the customer is.

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