• “Help the Farmers” was launched on February 9 on Pinduoduo, giving multiple access points for consumers to buy fresh produce directly from farmers in poverty-stricken areas.
• The online channel helps farmers affected by the closure of usual offline sales channels amid the coronavirus outbreak.
• Over 280,000 agricultural products are available through the dedicated channel.
• Pinduoduo committed 500 million yuan to subsidize purchases of agricultural products from farmers.
• Pinduoduo is providing logistics subsidies of up to 3 yuan per order for farmers selling on Pinduoduo.
Uncle Wang, a farmer in China’s Hainan province, was very close to suffering catastrophic losses for his sweet potato harvest this year. Sales of the antioxidant-rich root vegetable are usually brisk around spring time, but have all but stopped this year due to the COVID-19 coronavirus epidemic that broke out late last year.
Over in the foothills of Changbai Mountains in northeast China, a worried farmer is sitting on some 500 tons of chestnuts, waiting for buyers.
Across the country, farming communities are wondering what to do with their crops after large agricultural wholesale markets were closed as part of measures to contain the spread of the coronavirus.
These centers traditionally acted as the main conduit for sales of vegetables and fruits, buying up harvests from farming communities in rural areas and selling them on to towns and cities. Restrictions on travel and road closures have contributed to the bottleneck.
“Excess supply in agricultural products has always been a problem and the coronavirus outbreak has made it extra difficult for farmers to sell, given the closure of the wholesale markets”, said Lake Di, deputy director of Pinduoduo’s Agricultural Research Institute. “At this special time, we are helping farmers to mitigate the impact from the coronavirus outbreak.”
To alleviate the supply chain woes, Pinduoduo created a special “Help the Farmers” channel on February 10 to match the demand from its more than half a billion users and supply from over 12 million agricultural producers.
By using its recommendation model and logistics data to identify potential consumers, Pinduoduo can deliver the fresh produce directly to consumers. This is crucial because unlike other goods, agricultural products have a limited shelf life and many farmers face immense hardship if they lose their harvests.
The initiative now covers almost 400 agricultural areas in China, including 230 poverty-stricken counties.
In the cities, the measures put in place to combat the spread of the COVID-19 coronavirus outbreak have upended the rhythms of daily life for most people. This has cast a spotlight on the increasing importance of online businesses in delivering goods and services to communities facing restrictions in movement and access to bricks-and-mortar outlets.
Consumers have taken to buying protective equipment like surgical masks and hand sanitizer through e-commerce sites. Students are learning through online channels with the closure of schools. Employees at many companies are telecommuting in what has been described as the world’s biggest work-from-home experiment.
“We are positive on long-term trends in online consumption, empowerment of technology to digitize offline and improvement in merchants’ efficiencies,” Jefferies analysts including Thomas Chong wrote in a note last month. “We reaffirm our long-term thesis on online shopping amid the consumption upgrade story and rising penetration in local services, in particular food delivery.”
In Yunnan’s Jianshui county, Li Hongwei and more than a dozen farmers were happily packing onions for delivery into the night. Just a few days before, Li was wondering what to do with fields and warehouses full of onions, which will soon rot if he could not sell the crop.
Help came after a distributor of Yunnan vegetables and fruits on Pinduoduo alerted the platform about the farmers’ woes. The distributor was able to join the “Help the Farmer” channel. They managed to sell five tons of onions in two hours after some 300,000 users watched their live-stream and placed orders. That evening, the farmers helped pack the produce to be shipped to consumers in Shanghai, Nanjing and Guangzhou.
To further help the farmers, Pinduoduo is also providing over 500 million yuan in subsidies through discount coupons to encourage users to buy more agricultural products. The company is partnering with China Post, SF Express and other logistics partners to speed up the delivery of agricultural products to consumers.
Pinduoduo is China’s largest e-commerce platform for agricultural products with over 586,000 merchants supporting more than 12 million farmers countrywide. Last year, the company recorded gross merchandise value of 136.4 billion yuan for agricultural products, representing a 109 per cent increase from a year earlier.
A prolonged outbreak would undoubtedly hurt consumer sentiment and even online spending, particularly on discretionary items, according to S&P Global Ratings credit analyst Ava Chang. But for now, online retailers stand to gain.
“China’s blistering rate of online retail sales has decelerated somewhat but remains in double digits,” Chang wrote in a report released last week. “We believe that this year’s health crisis will further the long-term structural shift to e-commerce shopping.”