A future without supermarkets

December 22, 2016 | mAgri | Global | Global | Natalia Pshenichnaya

Same way as Airbnb disrupted the hospitality business, and Uber changed our traditional transportation choices to a crowdsourcing model, 2016 newcomer Farmdrop has challenged the conventional design of the centralised food supply chain and the way we as consumers relate to those who produce the food we eat.

Transparency, fair value distribution, changing relationship from vertically controlled ‘pipe’ to a network system – all of this can be an answer to the problems we are trying to tackle as humanity: including climate change, pollution, managing finite resources (such as soil fertility and water) and increasingly uneven income distribution.

We can of course stop here and celebrate the change in consumer consciousness levels coupled with the availability of technological solutions. Remembering that 99 per cent of food producers reside in developing markets, the question that puzzles me the most is – how could we possibly use a smart sourcing system to affect the change at the global level? And the question you might ask – what do mobile operators possibly have to do with such crowdsourcing models?

Interestingly enough, while most of the developed world consumers have credit cards once and forever attached to their profiles in all the main transactional apps, the low levels of banked population in Sub-Saharan Africa or Asian markets mean that the e-commerce payments are very likely to happen via MNO-led mobile money systems. While the strategic and operational pathway of moving into the e-commerce space for MNOs represents the next big challenge, we are already seeing examples of MNOs collaboratively investing in e-commerce, opening up APIs to e-commerce solutions, supporting e-commerce services via accelerator and incubator initiatives and offering the e-commerce solutions exclusively on their network (e.g. Dtac’s Farmer Info app). For MNOs that are bold and agile enough to transform or spin off into digital service companies, the roadmap to digital commerce is likely to look more ambitious and involve building network-agnostic e-commerce platforms integrated with existing MNO distribution channels. What is certain however is that smart entrepreneurs will be building technology solutions for existing use-cases. Considering that at least 70 per cent of global food production comes from smallholders, and we all pay for our food on a daily or weekly basis – what other prominent use-case would you look for when thinking about digitisation?

You might ask – wait but what about the infrastructure? Mobile is not the solution to all global problems, including the infrastructure gaps in the developing world – we have to work with the ecosystem to design feasible and scalable options. Good news is that every year the accessibility of smartphones dramatically improves – a stunning example is Ooredoo Myanmar, now offering a smartphone for rural population at a price below $25. In 2016, we have seen Telenor Pakistan piloting an e-commerce solution with a local agricultural social enterprise sourcing from individual farmers; the demand from urban customers for fresh produce coming straight from farmers was very high and immediately questioned the scalability of the service. For full scalability of digital sourcing solutions we will have to work with structures that already organise and represent producers, such as cooperatives which are – no surprise – stronger in some markets than others.

Things to watch in 2017 – we can’t wait for RML AgTech to come back with a new e-commerce strategy after their initial successful (in terms of scale) and challenging (in terms of financing model behind the e-commerce solution) attempt to facilitate transactions between farmers and buyers.