Aug. 30, 2017
Usted puede encontrar la versión en español de este artículo aquí. 'Agroads: Cambio de Juego en los Canales de Distribución en Línea de Argentina'
Robert Rodríguez, director of Agroads, told AgroPages that he had been working for a couple of Internet companies, and after analyzing the market, he found that there are no good solutions available in the agricultural sector for solving the problem of connecting supply with demand.
Could you please briefly introduce to us about Agroads’ history of development, main business, business model, main products and the major business regions?
We are a marketplace exclusively for the agricultural sector, currently with presence in Argentina and soon we will officialize the launch in Brazil.
Director of Agroads
Agroads began in 2005, inspired by the great internet players like Ebay, Amazon and MercadoLibre in Latin America. It was a sector where I had been working for a couple of companies and analyzing the market did not find anything really good that solves the problem of connecting supply with demand from the agricultural sector.
Our business model evolves as the producer and suppliers adopt the Internet as a means to do business. Today our revenue model is based on Advertising via Subscriptions for the integration of supplier offerings and advertising campaigns for large clients.
We are currently integrating payments for spare parts and agricultural equipment, with which we will begin to intermediate in operations. Additionally we are working two other business units, but this will only be presenting in 2018.
Please introduce the current development situation of agribusiness e-commerce industry in Argentina. What are the advantages of e-commerce comparing with the tradition distribution channels?
This is the third consecutive year that Agroads will be growing at a rate of 50% in traffic and doubling its revenues, is clearly a time of great Internet penetration, coupled with the generational change that is taking place and the maturation of the channel as a tool of business.
Currently in Argentina, 75% of people connect with the Internet and make purchases online. The agricultural sector is slower than other sectors, it is still not a pure e-commerce space, it’s only a matter of time, and without doubt that will happen and generates huge opportunities that we seek to capitalize on the region thanks to our experience.
Internet gives a lot of power to the producer, thanks to platforms like Agroads, which can help them access 70,000 plus offers in one place, compare products and prices and find the best opportunities. A few years ago, if someone had to buy a tractor, they were limited to only the suppliers located closed by, and that is vastly changing the whole industry.
On the other hand, for suppliers, we are a strategic ally since we allow them to reach 400,000 people linked to agricultural activity at a minimal cost, helping them expand their client portfolio, automate their business management and solve the issue of their digital presence, the rules of game are changing and already everyone is aware that this is going to expand.
Why Agroads could succeed? What are the competitive advantages of Agroads?
It is very difficult to enumerate some points that define the success of the company, normally they have to do a lot of things very well for a long time, but if we have to reduce it to a list of 3 factors, we would say:
1. Team: It is common to hear this, but it is not common to have a team so aligned and committed to generate a great impact in the agricultural industry.
2. Focus: it is very common to want to do everything a little, we want to be the best in the world in one thing.
3. Experience: it comes down to that. Today we are working with bigdata to predict what the producer will need in his next campaign, without a doubt this is going to change everything.
I think these factors of success are our competitive advantages from an abstract point of view. Other specific factors could be our 12 years of experience, our technology is 100% internally developed which gives us a lot of flexibility to adapt and customize the system to different markets and producer profiles. In Argentina, we have undoubtedly created a very strong brand, achieving 1.5 million visits has more than 400,000 users operating, with a total of 75% of recurring traffic.
In China, many agrochemical companies tried to sell their products online these two years, but in my view, there is no success story occurred by now. How do you think the main problems and development obstacles of agri e-commerce industry? What’s the scenario in Argentina? Did some agrochemical companies succeed in e-commerce?
I sincerely do not know the attempts to venture into ecommerce by Chinese companies, so I will make an opinion trying to understand the context of the sector with the Internet.
First, we would have to evaluate what are the parameters that define something is a success or not, for example in Agroads a year ago we did an online event, where a manufacturer of Fertilizers made a 100% online sale of a high-end equipment, which cost about $ 80,000 dollars with a very aggressive discount of 22%. During that event, a strong marketing campaign was carried out both inside and outside Agroads. Taking the traffic and contacts as metrics to define the success of the event, we would have to say that it had been a failure, however they ended up selling 3 teams online. Analyzing the case, it was a very punctual product, in a fertilizer market that is very small. This manufacturer sells between 5 to 10 of these machines per year, and here he sold 3 in a week. It was clearly a success we saw firsthand.
Going back to the motives, I think we have to go a long way, with all that implies, for us it is clear that something is going to happen, but it is essential to understand the stages of the process. We are only at a stage of confidence generation, of developing solutions, beginning to understand the benefits that the internet can bring to business in agriculture, as all this matures the volume of business carried out by the channel, understanding that not everything has to be online, it is often an information channel and the business ends offline.
From Agroads a few weeks ago we carried out the first ecommerce event for seeds and agrochemicals with 2 very important groups. The result was very good with specific sales, companies know that they have to be in the digital channel not only advertising but integrating their offer and distribution each, because your client today uses a lot of Internet. It is a road that we are beginning.
How about your company’s sales performance over the recent years? What’s your plan for the future development of your company?
Our performance has been fantastic in the last 3 years, doubling our income year after year, we currently have 1,500 active clients in Argentina.
I can not give details of the plans that we have for the next few years, but to revolutionize the way we do business in the sector we have to be very dynamic, proactive, highly focused and give a world class service in the markets that we are.
Expectations are the best, we are seeing a great advance in the digitization of the field and that will enhance ecommerce not only in Latin America but also throughout the world. No doubt the best is yet to come.