Agricultural products the next big move in e-commerce

Lazada, Sendo, and other e-commerce sites have all started trading agricultural products

Both Lazada and Sendo have carried out several programmes to support the northern province of Hai Duong’s farmers to sell litchi products on their e-commerce platforms. According to Dang Dang Truong, PR lead at Sendo, just between May 24 and 27, a total of 12 tonnes of litchi were sold through the platform.

Similarly, at a recent conference promoting the export of agricultural products from Hai Duong held by the Vietnam Trade Promotion Agency (Vietrade), newly-established online shopping sites such as Voso (Viettel Post) and Postmart (Vietnam Post) also announced to start focusing on agricultural items instead of fast-moving consumer goods, clothes, and cosmetics like other platforms.

The new segment also lured in the involvement of startups such as Vietnam-based FoodMap and Indonesia-based TaniFund. So far, TaniFund has successfully mobilised $65.5 million Series B funding, led by MDI Ventures, while harbouring plans to enter Vietnam at the soonest.

In a previous talk with VIR, Sendo founder and CEO Tran Hai Linh said that agricultural goods have solid trade potential on e-commerce sites in Vietnam because they have been one of the most consumed commodities in Vietnam. However, to date, due to obstacles related to logistics and transportation, agricultural items, especially fresh food, have yet to reach popularity on online shopping sites.

He explained the hardest part of entering the segment is ensuring the best quality of fresh food products during transportation. There need to be suitable packaging and transporting processes to keep produce fresh and undamaged on short and longer trips.

Pham Ngoc Anh Tung, founder of FoodMap has also highlighted the high investment costs that come with entering this retail segment.

According to Development Reimagined, a China-headquartered organisation specialised in diplomacy, environment, and public relations, selling agricultural products online cost a long time and large investments before reaching success. For example, in China, e-commerce giant Alibaba in 2015 carried out the “Taobao villages” programme to help farmers sell their products on its Taobao platform. However, until 2020, purchasing agricultural goods online reached common in the country.