Before Jumia and Kilimall came with black Friday, we had OLX, which took us by storm, and by us, I mean Kenya, Nigeria and other African countries that were introduced to the world of online shopping. Now allow me to introduce you to online grocery shopping.
What's E-commerce you ask?
What these companies, that I stated earlier, have in common is e-commerce, so what is e-commerce?Wikipedia describes it as the activity of electronically buying or selling products over the internet. Basically, this means people buying and selling products via the internet at their comfort including agricultural products and inputs.
E-commerce relationship with agriculture
As more farmers and agribusinesses adopt digital technologies to improve their market access and increase efficiency in boosting their yields and their incomes. E-commerce platforms and marketplaces are allowing farmers to reach new buyers, expand their customer base, and obtain better prices for their produce.
This creates opportunities for farmers and agribusinesses such as processors, distributors, and exporters, who are using digital platforms to improve their supply chain management, reduce transaction costs, and increase their competitiveness in domestic and international markets.Various platforms have been set up by companies and startups to help farmers sell their products and or source the required farm inputs. Each company has its unique approach and set of services, and competition in this market is likely to increase as more companies seek to capitalize on the opportunities presented by technology to improve the livelihoods of smallholder farmers.
E-commerce impact on Agricultural Value Chain
Growing up we learned that “agriculture is the backbone of our country”, meaning a lot of our folks or folks to someone you know depended on agriculture as much as our economy depended on it. But middlemen had taken over agribusiness. E-commerce sites such as Twiga foods have provided platforms for farmers to reach markets on their own terms and control the narrative. This enables farmers to access markets beyond their local communities, enabling them to reach a wider range of buyers such as international markets. In addition, they obtain better prices for their produce as well.
Some of these platforms provide farmers with valuable market information and data. This advises the farmers and helps them make informed decisions about what to produce and how much to sell. The platforms also enable farmers to track sales, read market trends and get product reviews or ratings, helping them to learn and improve the quality of their products to be in line with market needs.But it is not all rosy, as much as this is an advantage to farmers and the Kenyan economy at large, there are some disadvantages e-commerce has dragged along. They include:
- Increased competition - While e-commerce provides farmers with access to new markets, it also means they will be competing with a greater number of sellers, including large agribusinesses and sellers from other countries. This may put pressure on farmers to lower their prices, improve the quality of their products in order to remain competitive or leave the platforms totally.
- Negative impact on smallholder farmers – E-commerce platforms have the potential to benefit smallholder farmers, but they may also face challenges in accessing and using these platforms effectively. Additionally, e-commerce platforms may be designed to cater to larger and more established agribusinesses, leaving smallholder farmers with fewer options.
- Distorted market prices - E-commerce may introduce new market dynamics that can distort prices and negatively impact farmers. For example, some buyers may use e-commerce platforms to engage in price manipulation or to drive down prices through bidding wars. Additionally, e-commerce may create a 'winner-takes-all' environment where only the most successful farmers are able to reap the benefits, leaving smaller and less competitive farmers behind.
It's worth noting that some of these potential impacts are hypothetical and may depend on various factors such as the design of e-commerce platforms, the behaviour of buyers and sellers, and the availability of supporting infrastructure and policies.
Conclusion
My two cents on this and what I hope you might understand is this, e-commerce has affected the agricultural value chain and is still shaping it, especially the Kenyan market. It has enabled farmers and agribusinesses to access new markets, increase efficiency, and boost productivity, ultimately leading to economic growth and improved food security in the country.
Now go ye' forth and buy your groceries online and support your local farmer.
