Amazon Tries to Crack India’s Produce Market by Wooing Farmers
Amazon.com Inc. is taking the first steps toward cracking India’s outmoded agricultural sector.
(Bloomberg) -- Amazon.com Inc. is taking the first steps toward cracking India’s outmoded agricultural sector, hoping to secure the farm produce that yields two-thirds of the country’s $1 trillion in annual retail spending.
The Seattle-headquartered giant has begun offering real-time advice and information through a dedicated mobile app to help farmers make decisions on crops and even deploy machine learning technology. The program -- which Amazon dubs Reactive and Proactive Crop plans -- promises to provide growers with cutting-edge technology and insights.
Amazon is the latest corporate giant hoping to tap the world’s largest annual harvest of fruit and vegetables after China’s, joining Reliance Industries Ltd., Walmart Inc.’s Flipkart and the Tata Group, which recently acquired online grocer Bigbasket. They aim to boost their businesses by helping modernize an industry dominated by small farmers and struggling to acquire basic equipment from temperature-controlled warehouses and refrigerated trucks, which in turn generates enormous waste.
Securing a steady stream of fruit, vegetables and other groceries is considered key to dominating Indian online commerce.
“Unless Amazon, Walmart, Reliance and others crack the farm supply chain, they cannot unlock big growth in e-commerce,” said Arvind Singhal, chairman of retail consultancy, Technopak Advisors Pvt. “Gaining goodwill at the grassroots level by building a strong relationship with farmers will help them get predictable, quality produce all round the year at stable prices.”
Amazon’s mobile app is providing alerts and addresses soil, pests, weather, disease and other crop-related queries, it said in a statement without elaborating. It can also supply machine learning algorithms to detect defects in fruits and vegetables. And it will help farmers sort, grade, and pack produce for transport to Amazon Fresh fulfillment centers.
“Such effort is time-intensive and it could be years before Amazon and others see results,” Singhal said.
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