China Green Agriculture Inc., a China-based producer and distributor of fertilizer products, says it is planning to build several e-commerce sites and sell more agricultural products through online channels.
Like many other industries, the agricultural industry in China is going through a restructuring, the company says. The restructuring stems from urbanization and consolidation of farms, including the emergence of large farm operations that have absorbed traditional small family farms.
One of the results of these changes, China Green says, is that farmers are buying more equipment and materials through e-commerce sites as well as from other new distribution channels.
China Green isn’t alone in eyeing the online commerce opportunity.
Chinese e-commerce giant Alibaba Group, for example, is already selling online to agricultural customers. On Alibaba’s Taobao.com, a retail e-commerce site, agricultural products have become one of the fastest-growing categories, with its transaction volume growing at an average of 112.2% each year since 2010, according to Alibaba.
To compete with Alibaba and other new online competitors, China Green says it is building a B2B e-commerce site, 900cga.com, where it plans to sell fertilizer and other agricultural materials starting later this month. China Green Agriculture says it also plans to launch another e-commerce site, 900lh.com, to sell agricultural products to consumers in urban areas.
But while China Green plans to compete against Alibaba, it also plans to work with it.
China Green has signed e-commerce contracts with Alibaba and will open online stores soon on Alibaba’s business-to-business and business-to-consumer platforms, the company says. Alibaba operates the domestic wholesale marketplace 1688.com for suppliers and buyers based in China; its domestic retail e-commerce sites include Tmall.com and Juhuasuan.com as well as Taobao.com. Alibaba also operates marketplaces Alibaba.com, where suppliers in China sell to buyers outside of the country, and AliExpress.com, where Chinese suppliers sell to consumers in foreign markets.
Moreover, China Green says it plans to add more payment options for its clients.
For example, it will let farmers use organic grains or other agricultural products instead of cash to acquire fertilizer products. For farmers pressed for cash, this policy will enable them to buy more fertilizers during the planting season, the company says.
By Frank Tong Senior editor, China
October 6, 2014, 2:20 PM