Agriculture e-marketplaces are D4Ag market linkage solutions that require
little or no human intermediation, and that bring individual buyers and sellers together via virtual trading marketplaces.115
Agriculture e-marketplaces provide a
platform for various sellers and buyers of agricultural products to transact. For off-take e-marketplaces, sellers can include individual farmers, farmer groups, or cooperatives posting their offers. Buyers range from small agri- tens of millions of people in the urban areas
of most African countries with discretionary income, but few high-quality retail food stores per capita.
With these trends in mind, investment into food e-commerce businesses in Africa that link farmers directly to end-consumers is growing. How precisely these D4Ag players interact with the farmer varies by model, so the impact on farmers is not always clear, but a number of examples are emerging that show that such market linkage models can be viable and attractive to both farmers and e-commerce entrepreneurs.112 Examples of such
direct-to-consumer local produce e-commerce enterprises include IzyShop in Mozambique, FarmFresh in Gambia, HMart and Get It Rwanda in Rwanda, Jangolo in Cameroon, Premium Hortus and Jinukun in Benin, Farmart in Ghana, Village Market and Foodstock Farmers Market in Nigeria, Khula in South Africa and Herdy Fresh and Kitchen Soko in Kenya.113
On the input retail side, agriculture input e-commerce enterprises serving smallholder farmers also have substantial
constraints on market size, including poor rural connectivity, limited farmer digital literacy, and the high costs of rural transport and shipping logistics. In effect, these constraints lead to a parallel situation in which digital-only e-commerce sites are often limited to serving
technology-based innovations like the use of blockchains to build trust via transparent and immutable transaction records (e.g., Cellulant’s Agrikore).
When e-marketplace platforms succeed, whether on the input or off-take market linkage side, they can theoretically unlock substantial value through efficiency gains and other positive knock-on effects. These effects include the
ability to use transaction information at scale to deliver value-added advisory or market agri-intelligence services across smallholder value chains – or to convert those transaction data into records that value chain participants can use as a form of collateral for working capital or for smallholder farmer input loans.
The number of e-marketplace D4Ag solutions in Africa is growing – our database is now tracking more than 15 such players. The majority tend to
be at very small pilot scales today (<25,000 smallholder farmers registered); a handful, however, are starting to reach much greater scale and aspire to reach millions of farmers across Africa.
dealer buyers and aggregators to substantial agri-processors and wholesalers to last-mile food retailers. For the input e-marketplace variant, sellers include various types of input supply chain intermediaries while smallholder farmers typically are the buyers.
E-marketplaces can help solve the problem of inefficient and fragmented agricultural markets when and if they are able to crack the challenges of identifying and attracting enough buyers and sellers. To do so, e-marketplaces need
to invest into effective marketing and – more importantly – must embrace innovations that build trust that is often missing in smallholder farmer value chain relationships. The trust-building mechanism can simply be the reputation or brand of the e-marketplace backer (e.g., MasterCard Farmer’s Network), a reliable payments platform with which the marketplace is associated (e.g., Cellulant’s Agrikore), partnerships with credible government agencies or NGOs (e.g., Farm- to-Market Alliance), value-added services such as free advice, explicit insurance or guarantee mechanisms to mitigate the risk of non-performance by counterparties and, lastly,
A few marketplace players are focusing on both the input and off-take linkage
pathways – Lima Links in Zambia and
Farmerline serve both produce and input
marketplaces.120Cellulant’s new Agrikore
solution also focuses on both input and produce e-marketplaces via a blockchain-based smart-contracting, payments and marketplace system that seeks to ensure that everyone in agriculture (farmers, FMCGs, agriculture inputs providers, produce aggregators, insurance companies, financial institutions, governments, development partners) can do business with each other in a trusted environment.121
Across all of these solutions, the interaction
between the buyers and sellers can be simply memorialised as a record in the e-marketplace or can incorporate the processing of payments for the transaction on those e-marketplaces that have third-party payment partners or proprietary payment solutions such, for
example, MasterCard’s Farmers Network,
Cellulant’s Tingg payments mechanism
in the case of Cellulant’s Agrikore
e-marketplace, or the use of Agrocenta’s AgriPay for their Agrotrade e-marketplace.
Of the various examples of e-marketplaces that aim to link farmers to agricultural produce
buyers, MasterCard’s Farmers Network
(formerly known as 2Kuze) is likely the most
ambitious e-marketplace in Africa today. Incubated by MasterCard’s Lab for Financial Inclusion in Nairobi, and currently deployed in Kenya, Uganda, and Tanzania, this solution aims to systemically integrate smallholder farmers from loose value chains with quality buyers via a digital transaction marketplace for individual sellers and buyers. Participation in the network involves all actors adopting MasterCard-led payments digitalisation.116
Smaller start-up examples of e-marketplaces that link farmers to buyers include Usomi’s Rubi and Mifugotrade in Kenya, Farmster
in Tanzania, Annimart, Zowasel in Nigeria,
and eFarm in Cameroon.117TruTrade in
Kenya and AgroCenta’s AgroTrade in
Ghana also likely fall into this category, though they do feature village-level entrepreneur agents as part of their models, and so are not purely digital marketplaces.118 On the
input marketplace side, examples of active e-marketplace start-ups include FarmAll in
Kenya and Agro Market Day in Uganda.119
While the topic of barriers to mechanisation is a complex one with many policy and market failure dimensions, it is becoming clear to many sector experts that innovative
D4Ag solutions, in particular, hold the potential to address several of the major constraints to mechanisation uptake.126
Some of the key barriers that D4Ag solutions can address include high capital costs of mechanisation technologies relative to the income levels of most African smallholder farmers, the absence of affordable financing for mechanisation, challenges of supply-demand matching in fragmented value chains with poor information access, the scarcity or absence of distribution infrastructure, and issues of equipment quality assurance and ongoing maintenance in remote rural areas.127
Our review of D4Ag market trends and sector interviews suggest that the two most immediately promising D4Ag solution areas in this regard are shared economy for mechanisation and pay-as-you-go (PAYG) mechanisation solutions. While the number
of start-up enterprises focused on either opportunity is still relatively small – perhaps a dozen out of the nearly four hundred D4Ag solutions tracked – it is rising quickly with multiple new entrants in just the past two years, and growing inflows of venture financing.
The first of these opportunity areas is the use of ‘Uber-ised’ shared economy solutions to link farmers to mechanisation providers and services.
The most prominent examples of this model in Sub-Saharan Africa are the use of digital shared service solutions to link farmers to tractor services,128 though the model is also
readily extendable to other mechanisation services that require capital intensive yet mobile agricultural machinery such as high- cost field diagnostic equipment (e.g., soil and crop testing scanners from enterprises like AgroCares), land-levelling equipment
(e.g., precision laser land-levellers from companies like Trimble that are suited to
African smallholder settings),129 and portable