Building a Tech Platform for Aggregating Farm Purchases in India
Krishi Janani’s business model is based on aggregating farmer purchases. There is an enormous amount of purchasing power buried in rural areas. However, agricultural input purchases or consumption expenses in farm households are relatively small and numerous. And, the ‘customers’ are dispersed over a large, sparsely connected area. All this makes aggregation a huge challenge.
The original premise of group buying service such as Groupon is that the aggregator sends an electronic notification of a sale (email in most cases) to customers who will use their saved credit card to make purchases that some other vendor will deliver. Not surprisingly, that model does not work in rural India. No email addresses, no credit cards, no delivery service… and those are just to begin with.
So, how have we built out Krishi Janani’s aggregation platform so far?
- Krishi Janani sends out notification text messages in Tamil. These Unicode messages that have to be delivered to a range of smart and button phones have their own challenges. If you thought Twitter’s 140 characters was such a drag, try saying something useful in Unicode text messaging’s 70-character limit.
- We have compensated for the absence of electronic payment mechanisms by establishing ag tech centers in rural areas where farmers can pay in advance for their purchases.
- Our first ag tech centers are just two and half months old as of today. There is a hesitation in buying ag inputs and machinery through an unknown entity like Krishi Janani. We make up for it by forming partnerships with a range of vendors, some well-known and some not-so-well-known. As a result, Krishi Janani’s August discount sale brochure contains 16 products from six different vendors.
- Farmers would like to see what they are buying. They would like demos of farm machinery. They want to touch (crush rather :)) the cattle feed to test the pellets for quality and consistency. This creates a practical difficulty for our local centers. They cannot store, display, or demonstrate the sixteen products we have in our catalogue now, let alone the 100+ products we eventually want to list. To get around this, Krishi Janani organizes ag tech expos in small towns where our vendor partners are invited to demo their products and services. Our most recent expo focused on cattle.
- There is no courier service that will deliver to the last mile in rural areas. What this means is that Krishi Janani is stringing together a fleet of rental vans to create an in-house delivery service. In this situation, our local ag tech centers are also serving as the distribution hub from which farmers can pick up their products.
Network effect is a gorgeous place to be once there is a critical mass of farmer-members. Until that time though it feels more like an uninhabited planet where we are searching for a water source. Any sign of life therefore feels like a shot in the arm. So, we are quite proud of our member registration drive (400+ members in 66 days) and our first set of transactions — an order for a fodder cutting machine and a handful of cattle feed purchases.
Aggregation is a hard and complex nut to crack, even without the additional complexities mentioned above. This is the reason why when we accomplish this at scale, Krishi Janani will be a hugely rewarding social impact business. However, until we get there, we will continue to look for water sources and signs of life. ;-)
