How e-commerce can help small businesses and farmers thrive in the post-pandemic economy

How e-commerce can help small businesses and farmers thrive in the post-pandemic economy

Staff Writer
Staff Writer
Pinduoduo Content Team
June 6, 2020

E-commerce is helping small businesses hit by COVID-19 understand their operations better and putting them on a surer footing for life after the pandemic, even as they struggle to secure timely funding from banks and other financial institutions to tide over current difficulties.

SMEs find banks and their processes “slow and painful,” while banks find SMEs a “colossal struggle” to deal with, both sides often taking months over paper records and contracts, according to Matthew Gamser, CEO of SME Finance Forum, a part of International Finance Corp that works with the World Bank. Collaborating with digital companies may not necessarily help with funding, but it will better equip them for life after COVID-19, he said.

“The future is what the e-commerce companies are doing,” Gamser said in a recent Consumer Matters podcast. “They are helping you digitally, helping you understand your finances better, helping you work with your staff better … they offer one-stop shops to what we all need.”

LISTEN: Matthew Gamser speaks to PDD Podcasts on how SMEs can survive the pandemic

Small and medium enterprises have been particularly hit hard during the coronavirus pandemic. The lockdown measures exposed the lack of a digital strategy for many of these brick-and-mortar businesses that are struggling to survive after cities ordered all but essential services to be shut.

With digital platforms, the availability of real-time information can enable small companies to get detailed insights and make better decisions.

Image by mohamed Hassan from Pixabay

In the agricultural sector, the traditional supply chain faced severe stress after the pandemic disrupted the flow of labor and logistics, threatening the journey of food from farm to table. Companies like Pinduoduo (PDD), China’s largest agricultural e-commerce platform, stepped in to bridge the gap by connecting producers directly to consumers.

For example, the company used its team purchase model to aggregate demand from its more than 600 million consumers for agricultural produce, helping farmers sell their perishable crops. PDD also provides local governments and farmers with insights on consumer preferences so that they can better plan and market their products.

“Pinduoduo is a great example of this,” said Gamser, who has more than 40 years of experience in private enterprise and financial sector development, “because they, like PayPal in the West, are saying ‘Our primary clients are mom-and-pop shops and we need to help them because no one else is helping them’, and there’s a big opportunity there.”

For Parmesh Shah, the World Bank’s Global Lead for Rural Livelihoods and Agricultural Jobs, the urgent priority is to aggregate various farmers’ organizations and gradually integrate them into a digital ecosystem, as is being done in remote areas of China, India and Kenya for millions of farmers.

“We invite agribusiness companies and technology companies, and the startups, to come and really offer innovative solutions to work with these farmers,” said Shah, who has worked on projects to develop and apply digital technology to agriculture.

“We feel that farmer organizations, e-commerce companies, startups… these will become the new kind of participants in the supply chain going forward.”

LISTEN: Parmesh Shah speaks to PDD Podcasts about digital initiatives for farmers.