HomeNewsIs there a place for e-commerce in the agricultural value-chain?

Is there a place for e-commerce in the agricultural value-chain?

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By Talent N Ndlovu

IN the face of the ongoing COVID-19 pandemic, the world faces a new challenge to continue doing business while limiting physical contact between people as much as possible.

Most countries have at one point or the other resorted to using local and international lockdown restrictions to curb the spread of the disease. During lockdown, access to physical stores is often limited, thus, businesses that traditionally sell their produce at physical markets and consumers who traditionally bought their goods at physical markets are often faced with a dilemma on how to link with each other.

Opportunities

This challenge creates an opportunity for e-commerce and digital platforms such as WhatsApp and Facebook to increasingly link consumers and businesses, bearing in mind that other consumers may already have been using these channels.

This article explores how vegetable consumers in Zimbabwe responded to the lockdown challenges in terms of acquiring vegetable produce for household consumption, and the possible barriers and opportunities that e-commerce presents to this industry.

Fresh vegetable produce, such as potatoes, carrots, onions, covo, rape and tomatoes, form a significant proportion of household consumption across Zimbabwe. In urban areas, households consume fresh vegetables almost daily.

However, most households do not grow enough vegetables at home to cater for everyday consumption, hence, they rely on fresh vegetable produce sold in the city to meet their daily needs.

On March 30, 2020, the government of Zimbabwe imposed its first 21-day nationwide lockdown in a series of lockdowns aimed at curbing the spread of COVID-19 in the country. The lockdown restricted travel for both businesses and individuals except those considered essential services, imposed a curfew, and prohibited gatherings.

Food markets were considered an essential service, so formal food markets were kept open, while informal agricultural trading markets and activities, which were normally characterised by high volumes of trades were closed as they were considered a possible hotspot for COVID-19 transmission. Food wholesale and retail shops were kept open but restaurants, braai spots and entertainment areas were closed.

Travelling into city  centres was restricted, with individuals only being permitted to travel within a five-kilometre radius of their places of residence, apart from travel for acquiring essential services outside that radii. To enforce these restrictions, roadblocks manned by police and the soldiers were mounted across the city and residential areas.

Those getting into the city centre were asked to prove the reasons for their travel using either work IDs or exemption letters.

COVID-19 disruptions

The lockdown restrictions had a negative impact on the agricultural sector and value-chain in many ways. Unprepared for the disruptions on the market, and right in the middle of production and harvesting, agricultural producers were faced with a shrunken market.

The closure of informal markets and non-essential businesses such as restaurants and entertainment places meant that farmers had lost access to a large proportion of their usual market. Consequently, farmers risked making huge losses through large post-harvest losses and reduced income.

Households, on the other hand, could no longer access their traditional city centre markets, and to buy vegetables from vendors in residential areas, or from local retailers. Traditional vendors and retailers in residential areas, who often purchase smaller quantities of vegetables could not meet the increased demand and as a result, they hiked prices.

The limited access to affordable fresh vegetable products for households, coupled with the shrunken market for producers and the high unemployment rate due to closure of many businesses and government departments, forced producers to come up with innovative ways to reach their household consumer market directly and also led to an increase in middlemen buying produce from the farmgate and selling it directly to individual consumers.

Since, accessing the city centre was limited and with no informal physical markets opened, some sold their produce on the roadside, but because movement of ordinary citizens was restricted, producers and farmers turned to social media platforms such as WhatsApp, Twitter and Facebook for the sale and purchase of vegetables, while also introducing delivery at the buyers’ doorsteps.

Digital purchasing

Digital purchasing came with various advantages including home deliveries, pre-agreed pricing, and delivery times. However, despite its multiple benefits, especially during COVID-19 lockdown restrictions and the pandemic itself, consumers still appear resistant to adopt e-commerce as a means of purchasing fresh vegetables for household consumption. It seems that during strict lockdowns, e-commerce vegetable purchasing gained little momentum among household consumers, with digital platforms such as Facebook and WhatsApp being the most popular.

However, most consumers still preferred to visit some sort of physical market, purchasing their vegetables from grocery stores, neighbourhood vendors. Spot markets in neighbourhoods, and along busy roads across the city, also gained popularity among consumers.

Once lockdown restrictions eased and vegetable markets reopened, consumers returned to their traditional markets, preferring to visit vegetable markets in the city or purchase from informal traders or grocery stores across the city.

Physical vegetable markets are more attractive compared to e-commerce markets for many reasons. There are many vegetable markets across the city, including formal and informal traders and grocery stores, making physical markets readily accessible to consumers, and giving consumers a wide variety of sellers to choose from. In these physical markets, consumers have the option to select the product of their desired quality and quantity for themselves.

Should they not be satisfied by their usual market, they can choose to purchase from other markets. Also, they can also easily bargain prices in physical markets.

For e-commerce and digital sellers on the other hand, consumers are purchasing a product that they cannot see physically, and being fairly new, e-commerce sellers often do not offer adequate information on the quality and quantity of their product, which consumers can rely on to make informed decisions.

A question of trust

Oftentimes, consumers do not trust that e-commerce sellers will deliver the expected product quality and quantity as advertised, or may even fail to deliver the product at the expected time. This mistrust is often fuelled by inadequate product information.

Lastly, by using fixed prices, e-commerce sellers take away the customer’s power to negotiate prices.

Bearing in mind that the use of e-commerce in the sale of fresh household vegetables is a fairly new phenomenon in the country, e-commerce sellers need to find ways to tap into the vegetable market.  To achieve this, building sustainable relationships with customers will be critical and this can be achieved in different ways.

E-commerce sellers could invest in providing a consistent supply of quality products. Sellers could also invest in closing the information gap between themselves and their potential customers by providing more information on their produce, for instance sizes, freshness, vegetable varieties and even their source’s location if possible. Consumers trust can also be gained by a seller posting pictures of the actual produce rather than internet or filtered pictures when marketing. Although it may take some time to establish, branding could also be another potential solution, as it gives the consumer an idea of the nature of the product to expect.  To build customer relations, sellers can also ask customers to give feedback and from the feedback, improve their services.

E-commerce platforms offer many potential benefits to consumers who purchase vegetables for household consumption compared to traditional physical markets, especially in the face of challenges caused by the COVID-19 pandemic. However, due to lack of trust and ready availability, these platforms are relatively unpopular with consumers. By sharing more information about products, branding, and setting standards, e-commerce sellers may find a way to penetrate the market.

  • This article was taken from African Thinker.
  • Talent Ndabenhle Ndlovu is a qualified Agricultural Economist. She holds a Bachelor’s degree in Agricultural Economics from the University of Zimbabwe (2005) and Master’s degree in Agricultural Science specializing in Agricultural Economics from the University of Pretoria (2016). Her main work experience is in research analysis. Her work has covered a wide variety of agricultural issues including land reform, agricultural development, climate change, agricultural marketing, and natural resources management. She has contributed to national review reports, articles, conference presentations, and book chapters. Beyond research, Ms. Ndlovu’s work has also covered banking, microfinance, business analysis, and management. She can be contacted on nndabenhle@gmail.com

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