How AgroStar Is Leading the Way to Simplify India’s Distribution
India has some 120 million growers and a predominantly generic agrichemical market. A strong and efficient distribution network is essential for crop protection.
Yet, the country’s industry has been plagued by problems arising out of supply chain inefficiencies, a lack of transparency, spurious products, and inadequate infrastructure, which result in post-harvest losses estimated at INR 45,000 crore ($7 billion) every year, according to a Tata Strategic Management Group/FICCI report.
This also makes it difficult for agrichemical companies to reach the farmers to promote their products and educate them about their usage and benefits. Indian farmers deal with layers upon layers of agents, dealers, and distributors to get to the farm inputs they want to buy.
Enter a Rising Start-Up Called AgroStar
The Pune-headquartered firm, founded in 2012, skips all the layers and goes straight to the farmer via their cellphone.
As the motto splashed on its homepage goes: “Our mission is to simplify the agribusiness experience for farmers in rural India.”
The Accel-backed start-up raised $10 million in Series B funding earlier in 2017 and currently operates in the three states of Maharashtra, Gujarat, and Rajasthan with a staff of over 200 people.
Commenting on the investment, Prashanth Prakash, Partner, Accel India, said: “There is a huge scope to implement technology to solve the inherent problems faced by farmers in India. In a mobile first country like India, AgroStar has clearly demonstrated that farmers in India are ready to adapt the latest in technology that can make their lives simpler and improve their productivity.”
Co-founder and CEO Shardul Sheth and co-founder and Director Sitanshu Sheth break down the process:
- A farmer expresses his interest to transact with AgroStar either through a missed call on a toll-free number or through the company’s Android app.
- AgroStar’s intelligent, predictive dialer connects qualified customer relations executive with the farmer. The executive understands his query and provides him with personalized agronomy and product solutions based on his crop cycle and places an order on behalf of the customer with the aid of a smart CRM.
- The products are dispatched from the central warehouse through one of the delivery channels viz. India Post, local entrepreneurial logistics partners or through field sales executives and are delivered at farmer’s doorstep.
The focus is on four consumer-centric pillars: genuine and quality products, fair pricing, advisory solutions, and quality service, say the Sheth brothers, and the model is catching on: “Farmer interest has been growing multi-factor every year. The business has been growing 2x to 2.5x in the last three years through continuous innovations in farmer engagement, product range, and last-mile delivery. More than 1.4 million farmers have been serviced with over 4 lakh farmers transacting on platform,” they tell AgriBusiness Global.
The key challenges, the Sheths say, include convincing less literate farmers to trust an alternate channel of commerce and ensuring timely last-mile delivery. The current platform, too, is not yet perfected. Delivery speed can still be improved, and logistics challenges still stand in the way of speedy deliveries of bulk products, according to the Sheths.
Precision ag plays no small part in the founders’ vision.
“AgroStar has also been at the forefront in acquiring a huge amount of data pertaining to millions of calls, lakhs of farmers and transactions, and thousands of products across the geographies. The farmer-specific data is used to provide more customized services, loyalty programs and recommend more relevant products. The operational data is used for building efficiency in the system.
“While the intent to be able to provide site-specific crop management services is very much there, and steps toward crop image-based recommendations are being taken, the challenges the Indian landscape provides with regard to small and fragmented holdings still makes it a difficult proposition to have precision agriculture done at scale,” the Sheths point out.
The company aims to spread throughout India within the next two years. Partners include more than 160 brands, including multinationals such as Monsanto, Dow, and BASF to provide raw materials, seeds, fertilizers, and other inputs.
“There is a continuous effort to on-board more relevant brands and expand the portfolio to cover more crops and agri-products across the states,” the Sheths say.