Application of internet information technology has become a new force driving agricultural development. Harnessing digitalisation can enhance agricultural quality and efficiency and help farmers increase their incomes by updating traditional production technology, changing trading locations, expanding transaction times, enriching trading categories, accelerating transaction speeds and reducing intermediate links. A vital strategy for comprehensive rural vitalisation, digital commerce has become the inevitable trend of future development, forcing all parties involved to make adaptive adjustments.

Product Innovation

Technology and demand are essential driving forces behind product innovation. E-commerce powerhouse Alibaba, in collaboration with domestic and international enterprises and universities that specialise in advanced agricultural research and development technologies, has overcome agricultural technology barriers and research and development dilemmas by utilising new technologies, processes, and equipment to improve total factor productivity.

An intelligent farming platform created by Alibaba and the Chinese Academy of Agricultural Sciences that leverages Alibaba's expertise in big data processing, storage, and analysis as well as resources such as China's National Key Facility for Crop Gene Resources and Genetic Improvement – a landmark site that came into use in November 2003 and represents a turning point in the country's agricultural science research – and was designed to facilitate whole-process digital management of crop cultivation serves as a good example. Capable of significantly reducing the time it takes to develop new plant cultivars by simulating various conditions and integrating various data, the platform is expected to reduce the length of the entire development cycle from 10 years to 5 or even less.

Technological Innovation

Internet of Things (IoT) technology and agricultural big data can drive innovation in production chains. Agricultural digitalisation features appreciable intelligent production and visual industrial organisation. Plant and animal growth data and surrounding environmental data can be recorded throughout the production cycle using wireless sensing technology. The structure and quantity of agricultural inputs and surrounding environmental parameters can be accurately adjusted to optimise the growth of plants and animals by applying big data analysis and calculations, which can help mitigate natural agricultural risks and ensure that product quality requirements are met.

Alibaba has been exploring agricultural digitisation in two main ways. Firstly, it forges digital agricultural bases that export new standards, technologies, and varieties; has established traceability systems, agricultural management systems, and an IoT cloud platform; and helps farmers increase their incomes through direct purchase and distribution arrangements. Alibaba is building digital agricultural bases that have incubated more than 136 Freshippo Villages, which are villages that provide fresh, high-quality, order-based agricultural products for Alibaba's Freshippo supermarkets – China's first data-and-technology-driven new retail platform – promoting rural transformation and development as well as "refinement, standardisation, and digital transformation of agricultural products" throughout the country as of April 2022 and has established stable and mutually trustworthy long-term partnerships with core organisations such as agribusinesses and farmers' cooperatives. Central production, supply, and sales platforms constructed by Alibaba have helped upgrade the village from a decentralised and isolated production unit to a part of modern agriculture's digital industrial chain.

Secondly, Alibaba has been building smart farms that utilise Alibaba Cloud services in order to help farmers realise intelligent crop cultivation and animal husbandry through comprehensive use of digital technologies such as AI and IoT technologies and has  established them in 12 of China's provincial-level administrative areas as of November 2021. The intelligent systems use technologies such as Artificial Intelligence of Things (AIoT), blockchain, and remote-sensing AI to automatically complete tasks such as watering and fertilisation, thus improving production efficiency and enhancing the quality of agricultural products.

Market Innovation

New business models that utilise the internet and are designed to create customer value have been emerging and a shift from a small number of mainstream products and markets to a large number of narrow markets has been occurring as digital technology has developed. In the agriculture sector, consumers are increasingly seeking personalised, customised, and high-end agricultural and ecological products. Agricultural e-commerce models must allow consumers to participate in production and value creation in order to meet the needs of consumers in the internet era, which requires connecting farmers and consumers in order to create and share value and can be achieved by replacing traditional logistics with digital logistics.

Alibaba has established a digital agricultural origin warehouse system that features more than 100 origin warehouses in core agricultural production areas throughout China, including in its main fruit producing areas, and some of them employ ecological partnerships involving collaborative co-management. The company has also integrated online and offline retail distribution channels in order to facilitate digital warehouse and sales network management. It launched a rural express logistics intelligent co-distribution project with the goal of improving distribution efficiency by combining express delivery with online sales of agricultural products in order to balance production and sales and established tens of thousands of village-level express delivery service stations in collaboration with other companies, which has reduced the cost of rural express delivery in the areas they serve and improved distribution efficiency. Another collaborative warehouse, China’s first county-level origin warehouse has become one of the largest county-level transit warehouses in northwest China as well.

Platform Innovation

Facilitating connection with customers and potential customers, sales and marketing platforms play a crucial role in various contemporary business models and are imperative for success in today's marketplace. Offering opportunities for interaction between suppliers and consumers, the platforms improve information flow, reduce search costs, break down barriers that used to exist due to information asymmetry, function as spaces that facilitate value exchange and creation, and create conditions for cross-border innovation. Sales and marketing platforms also help prevent opportunistic behaviour and protect the interests of consumers and suppliers via platform management, thus enhancing cohesion.

Towns and villages in China have been supplying agricultural products on Alibaba's main platforms for more than a decade as of 2022, which has helped support 10 million jobs. In 2020, more than RMB300 billion of agricultural product sales were logged on its leading e-commerce platforms and various subsidiary platforms. The company has also launched digital commerce education facilities designed for farmers living in various counties known as Digital Rural Training Centres.

A communication and collaboration platform developed by the Alibaba Group also created a new vocational education platform in conjunction with China's Ministry of Human Resources and Social Security, and free online agricultural management training courses became available in September 2021.

Alibaba plans to fully leverage its status as owner of the largest online agricultural commodity e-commerce platforms in China, its digital technology resource capacity, and its offline county-level teams that serve various rural areas in order to create agricultural social service platforms that provide agricultural services, agrotechnical services, and agricultural production solutions.

Source:

AliResearch

Administration and Management Institute (AMI) of China's Ministry of Agriculture and Rural Affairs (MARA)