Mobile technologies are framed as the future of agricultural development and the solution to many of the current challenges, like access to market and fairer prices. But are they as good as they seem? Our expert group is on the quest to find this out.
A number of mobile and online marketing agri-solutions have been launched in Kenya over the past few years including platforms like M-Farm, Fresh ‘n Easy, Agrisolve, Mkulima Young, Shamba Digital and SheTrades. Mobile solutions have the potential to provide direct access to customers which could enable farmers to directly market their products.
Our expert group has been researching how digital services can lead to better business opportunities for women through collaborative purchasing and distribution. This concept entails customers making group orders of fresh farm produce with their friends, neighbours or people in their vicinity, enabling a direct connection between farmers and producers.
The study and the prototype
To test the potential for collaborative purchasing, the expert group developed a prototype of a mobile app illustrating how collaborative purchasing of farm produce directly from women farmers could work. Customers would be able to:
- Search for produce they would like to buy
- Find a farmer
- Place an order
- Invite their friends to order together with them
- Pay and receive multiple orders in one delivery.
During April 2018, the team set out in Nairobi to test the viability of both the concept and the prototype. Focus group discussions, interviews, and tests of the prototype were carried out with smallholder farmers, household consumers, larger customers such as exporters, restaurants and retailers, as well as with other digital solution providers.
The hypothesis was that, making it easier for customers to order fresh farm produce directly from farmers and to shop together would increase market access for farmers. You can find out more about the idea in this video here.
Most smallholder farmers from the study reported being open to trying a solution that enabled them to get more customers. However, there was concern that most digital solutions they have seen do not last long. They were not wrong; all the providers of digital solution in the study reported that finding a sustainable business model for agri-focused apps has been a challenge and many struggled to stay afloat. They also reported relatively low uptake and use of apps by farmers. One of the causes was the perceived value or lack thereof, of the value farmers got out of the apps.
Many household buyers who could be a target market reported that the quality of farm produce was usually inconsistent when they bought it. As a result, many preferred to see and touch the produce before buying. Many did not trust that they would get good quality produce if they bought it from farmers on a mobile phone. On the other hand, many do purchase farm produce and other wares through WhatsApp groups, a simpler messaging solution. The use of WhatsApp groups for marketing by farmers and other SMEs has developed organically, with the admission into groups being largely based on the existing wider network, which to a large degree addresses the concerns buyers have about trust since the people admitted into the groups were friends of friends. Household buyers also indicated they would be reluctant to make purchases and pay together with other people.
‘We are already making orders for produce via WhatsApp with people in my estate- Trust and quality are a big deal,’ says a 34- year old female consumer from Lang’ata, Nairobi.
Like individual consumers, large buyers of farm produce, such as restaurants, retail shops and exporters that could also use the app, preferred to see the produce from farmers before making purchasing decisions. This was due to previous experiences of poor quality deliveries or last minute no-shows of farmers who were often unable to meet larger deliveries consistently. During the testing, the majority reported feeling that some quality assurance of produce should be done by the business managing the app. What they were interested in was a quick solution that would enable them to find all the fresh produce they needed from farmers as efficiently as possible.
Digital solution providers from the study identified a few challenges that would likely affect an app developed for collaborative purchasing:
- Smartphone penetration is still somewhat low: Google’s Consumer Barometer estimated smartphone penetration in Kenya at 43% in 2017. While this is overall positive, it is still not high enough. There are a few other things to keep in mind before building an app that needs to be operated on smartphones in this market:
- Use of smartphones is heavily concentrated in cities, while most of the farmers live in rural areas. Solutions that work on feature phones such as with basic USSD code should be explored as a complement to apps.
- Many of the available brands of smartphones are less expensive than the average smartphone in say Europe, and they don’t always support the use of many content-heavy apps.
- The uptake of other agri-apps is low: According to the digital solution providers roughly 200,000 to 500,000 farmers use agri-solution apps regularly, and the same group tends to keep migrating whenever there’s a new app. This could in part be because new developers target the same pool of existing app users.
- Lack of trust by customers is a hurdle: Previous experiences of poor quality produce or inconsistent deliveries have given many customers doubts about whether they would get what they pay for. Compared to an app, the use of existing WhatsApp groups feels safer for many since there is some control over who has the access to the groups.
Value chain: While connecting farmers and buyers is a great start, the support is needed to solve the logistical delivery of produce, particularly from farmers in remote rural areas.
Collaborative purchasing is working in Sweden and that is where the model comes from. However, based on the field study in Kenya, collaborative purchasing may not be transferrable to a developing country setting or, at the very least, is not the most suitable solution to facilitate market access for female smallholder farmers in Kenya.
During the field study many farmers asked indicated they would be very interested in a simple solution which could help them work with other farmers to sell their produce collaboratively. Many of them struggle with limited farm capacity and have trouble meeting customer demand consistently, particularly when it comes to large buyers.
The expert group will explore what this could potentially look like, so stay tuned to catch our next blog!