Seizing a $17 Billion Opportunity: Exploring the Growing Market for Farm Input E-Commerce

The rise of the farm input e-commerce market indicates that innovation is alive and well in the agriculture sector. Predicted to reach $17 billion by 2031, this fast-growing market offers tremendous potential for growth and profitability. With such immense opportunities available, it's high time for large-scale farm input producers to establish themselves as dominant players in the space.

A throne ripe for the taking

The global agricultural e-commerce market is projected to see revenue growth from $9.7 billion in 2021 to US$17 billion by 2031. Agricultural fertilizers are predicted to have the largest market share, followed by agricultural pesticides. The B2B sub-segment is expected to generate the most significant revenue share of the target market. Asia-Pacific is expected to lead in revenue shares, followed by North America and Europe. The report suggests that the growth of the market will be driven by the increase in agricultural infrastructure and government programs in countries like India and China.

The Electronic National Agriculture Market (e-NAM) is one such program introduced by the Indian government, which is an e-commerce portal that enables B2B trade in the agriculture sector. The rise of the internet, smartphones, laptops, and tablets is also expected to boost the growth of the market, with growing awareness levels concerning the e-commerce industry and improving consumer spending capacities. Mobile technology and internet penetration in Africa is seen as a golden opportunity for growth, particularly in Sub-Saharan Africa.

The farm inputs e-commerce market is already vast and competitive, with about 1,300 companies operating worldwide. Despite the competition, some companies such as OCP, Nutrien, Wesfarmers, CF Industries, and Mosaic have managed to establish themselves as leaders in the industry, providing innovative solutions to help farmers improve their yields, reduce costs, and enhance overall profitability.

Agrostar is an end-to-end agricultural solutions provider that offers a comprehensive range of agri-inputs such as seeds, fertilizers, tractors, pumps, and pesticides. Through its platform, the company provides expert advice, agricultural data, agronomy knowledge, and weather forecasts to farmers. The company, whose app is available on Android devices, has secured $124 million in funding from investors such as Accel, Bertelsmann India Investments, Rabo Frontier Ventures, and others.

Agrofy is an online agribusiness platform that has developed a digital marketplace for farmers. Registered buyers can view listings from registered sellers and conduct transactions on the platform. The company is currently launching the beta version of the software platform. Agrofy has secured a funding of USD 66 million from investors such as Yara Growth Ventures, Capria, SP Ventures, and others.

Gramophone provides farm input products and information to farmers, enabling them to purchase crop protection, crop nutrition, seeds, implements, and agricultural hardware products. Additionally, the company offers agronomic information such as weather information, latest market prices, a sophisticated expense calculator, cropping practices, and other advice. The company has secured $23 million in funding from investors such as Z3Partners, Asha Impact, Siana, and others.

BigHaat offers a web-based marketplace for farm inputs, with a product catalog that includes seeds, pesticides, fertilizers, pumps, tractors, and growth promoters. The company caters to farmers, NGOs, nurseries, and institutional growers. A mobile application is available for Android platforms. BigHaat has secured a funding of USD 20 million from investors such as BlackSoil, JM Financial Private Equity, Beyond Next Ventures, and others.

Agrim provides retail services for agriculture products and offers a wide range of agri-inputs to retailers at a reasonable price and flexible payment options. The company allows them to get goods delivered at their shops. The Agrim mobile application is available on Android platforms, and the company has secured a funding of USD 15 million from investors such as Axis Bank, Kalaari Capital, Omnivore, and others.

Tarfin provides an online platform to buy farm inputs and has developed the application using the agricultural risk scoring model based on machine learning. The company allows farmers to buy all agricultural inputs such as fertilizer, seed, and feed at affordable prices and harvest payment opportunities. Tarfin also enables farmers to compare prices of up-to-date fertilizers, feed, and other agricultural inputs in the regions where farmers are located. The Tarfin mobile application is available for Android platforms, and the company has secured a funding of USD 14 million from investors such as Yara Growth Ventures, Quona, Elevator Ventures, and others.

How major players can dethrone the newcomers

Established companies such as OCP, Nutrien, Wesfarmers, CF Industries, and Mosaic have advantages over startups in the crowded farm input e-commerce market. These advantages include large existing customer bases and distribution networks, as well as better resourced R&D capabilities. Moreover, incumbents typically have established relationships with farmers, dealers, and retailers, and robust distribution channels and logistics networks.

With their head start in terms of resources and experience, established companies can invest in consolidating their position in the face of disruptive upstarts.

How U+ can help major input producers seize this opportunity

U+ is a Silicon Valley-based venture builder that can help major input producers build and launch their e-commerce business using our proven methodology. With 120+ products brought to market, our methodology includes five key phases that are designed to ensure success: Concept Creation, Market Validation, Market Testing, Tech Build and Launch, and Scaling.

In the Concept Creation phase, we work with farm input producers to identify opportunities for their e-commerce business by analyzing market trends, customer needs, and competitive landscapes. We then develop a unique and compelling value proposition for their e-commerce platform.

In the Market Validation phase, we validate the e-commerce concept by conducting in-depth market research and gathering feedback from potential customers. We ensure that the value proposition aligns with customer needs and pain points.

In the Market Testing phase, we test the e-commerce platform with a small group of customers to identify areas for improvement and gather feedback on the user experience. During this phase we conduct hundreds of tests, ensuring a complete product-market fit and completely de-risking the rest of the process.

In the Tech build and Launch phase, we leverage our expertise in technology and digital marketing to build a robust and scalable e-commerce platform. We focus on optimizing the user experience and creating a seamless buying process. Finally, in the Scaling phase, we work with input producers to develop a growth strategy that helps them expand their e-commerce business and reach new customers. We leverage our network of industry experts, digital marketing channels, and data-driven insights to help them scale their business quickly and efficiently.

By partnering with U+, major farm input producers can leverage our proven methodology to build and launch their e-commerce business. Our five-step process allows these companies to save the hassle of building a new business line from scratch. With our methodology, the input producers can focus on their core business while we handle the details of launching their e-commerce platform. Once launched, the e-commerce business can grow on auto-pilot, through our scaling services, until the input producers are ready to take over and further expand it. This way, major input producers can have a new business line without distracting from their existing operations.

Conclusion

The rise of farm inputs e-commerce companies has been beneficial for farmers as it provides them with a hassle-free, transparent, and cost-effective method to purchase agricultural inputs. These companies offer a wide range of products, expert advice, agronomy knowledge, and weather forecasts, which are crucial for farmers to make informed decisions. The funding secured by these companies shows that the market for farm inputs e-commerce is promising, and there is a growing demand for their services. As the relevant technology continues to evolve, we can expect that these companies will further improve their services and continue to benefit farmers across the globe.