September 30, 2019 Chris Riddell

FUTURE FARMING REPORT | The 16 Billion Dollar Chinese Tech Influence

and how farmers are reinventing consumer trust

The last few years have been dominated by headlines of declining consumer trust in almost every industry and sector worldwide.  In 2018 after some of the worst years on record – global trust monitoring agency Edelman reported that things appeared to be getting better. Trust levels were rising again, and we coming through the fog. At least it appeared that way.

In early 2019 we were again back on the slippery slope down, and the record books were being rewritten. Trust inequality has now reached an all-time high, with only 1 in 5 people believing ‘the system’ works for them. Big brands and industry are again on notice.

So why does this really matter for the business of farming?

Ultimately this trust cycle that we’re going through means that humans are sceptical of a whole number of things. First and foremost we are more sceptical than ever when it comes to our trust in almost anything to do with brands, business and also government.

If we take a deeper look into the grocery business, when it comes to purchasing fresh produce in our supermarkets things are also quickly shifting. Consumers want to know where their produce they are purchasing comes from, and what’s actually inside it. This goes way beyond clever, marketing driven packaging just saying it’s purely organic or Non GMO. This is a new breed of consumer that more than ever wants to see humans behind the brands of our modern world.

Where is the new future of farming taking place?

Two years ago, Zhong Haihui, a 40-year-old farmer, was one of the first farmers in Hunan province to start selling his fruits through live streaming. Now he’s just one of many live streamers in rural China doing the same, reaching millions of customers from across the country on video app Kuaishou and ecommerce app Taobao.

There has without doubt been an enormous driver behind farmers becoming the new ‘personality’ live streamers in China. The country has been seeing continued growing concern over food safety, which has made more people tune in to see the places where the produce they consume comes from.

Other fruit farms in the region have now tapped into Zhong’s fast growing audience online, and he has now partnered with other farms to showcase their produce live to his subscribed audience of more than 100,000 people.

So what is the live-stream selling craze all about?

Live-stream ‘selling’ is actually nothing new at all – at least not in Asia. The trend began in late 2017 and has attracted hundreds of millions of users. Live-stream shopping has been compared to TV shopping on American QVC channels, but it is live, spontaneous, interactive, and sometimes gamified.

Hosts broadcast from their smartphones in real time, videoing themselves showing off clothes or other goods, and viewers can then immediately purchase that item from an embedded link.

Live-stream shopping channels and short videos are the perfect medium to engage those with a “see now, buy now” mentality. From a revenue-generating perspective, Alibaba reports a 32% conversion rate on its Taobao live-streaming platform alone.

The numbers are quite literally staggering. Viewers for major broadcasts can rise into the tens of millions. In March 2018, a fashion week shopping stream from Tmall and Labelhood attracted almost 90 million views.

When we look back at farming, shoppers watch to see where their fresh produce is from. However some viewers in the cities are infact watching to get a better understanding of what a rural lifestyle is all about. The online giant Alibaba has recently announced it will help 1000 farmers become livestream superstars by the end of this year, and help them earn more than $1,400 a month.

China is the global superpower when it comes to online broadcasts. According to a Deloitte report, live-streaming viewers in 2018 reached 456 million. That is more than the entire population of the United States alone. Live-streaming activity, from platform development to advertising and events, is destined to be worth almost US$16 billion by 2020.

Where else in the world is live-stream farming happening?

Live-stream farming has exploded in a big way for one farm business in the United States. Welker Farms, established in 1912 are based North Central Montana and have a 10,000 acre farm growing wheat, peas and lentils. The Welker Farms YouTube channel has a total of more than 41 Million views with almost 250,000 subscribers at the time of writing this article. The most popular videos on their channel has been viewed more than 2 million times.

Welker Farms YouTube success started almost by accident with a GoPro in 2018 when one of the sons, Nick Welker produced a video of their 100 year anniversary of being an iconic American farming brand. They have since been featured on National Geographic, online farming simulators and countless international print and traditional media publications.

The Welker Farming business is now arguably not just about farming crops, as their online business is the fastest growing agriculture channel on YouTube. Whilst their popularity grows, they’re battling to maintain their authenticity and stay loyal to their fans while also reckoning the tremendous potential they see: the opportunity to serve as agricultural ambassadors to a world disconnected from real food production. They see what theyre doing as chance to entertain and inspire a huge crowd; and, just maybe, a way grow trust with their consumers.

The Welker Farms online story has grown at such a rapid rate in the last couple of years. Perhaps not surprisingly their farm now has received so much attention from visitors, despite their location in a distant region of a vast state, they have to put signs at the end of their driveway during harvest that reads, “Visitors by appointment only.”

So why does live-stream selling work better in China?

Well, until the whole live-stream selling craze its worth noting that China were frequently called ‘copy cats’ when it came to tech and innovation. Now safe to say, the reverse is true. Amazon just this year launched “Amazon Live” in the United States, some number of years after the likes of Alibaba and numerous other Chinese e-commerce platforms.

When it comes to the business of selling, product discovery is absolutely critical. Without live-streaming features, people tend not to make impulse purchases online. They’ll browse for products they know they want to buy, and if an item description doesn’t provide enough info, they may call off the purchase altogether.

China and live-stream social selling started back in 2017 with more than 500 Million users now using the platforms

When combined with social media, however, e-commerce sites let consumers discover new products and develop trust in the quality of the products they are interested in. Both of these drive consumption. This effect is magnified when influencers are involved with people such as Zhong and Nick above.

China’s Taobao understands this very well and is changing the way products are sold on its platform. The CEO of Taobao Jiang Fan once said, “live-streaming is not just a feature. In the future, it will be the mainstream e-commerce model.”

For many consumers in lower-tier cities in China, this prediction has already come true. A recent article in the Chinese news outlet Jiemian found that live-streaming is a key information channel for young beauty consumers in lower-tier cities. One Taobao beauty influencer, Yang Xiao, shared that this demographic makes up a whopping 70% of her audience:

The next evolution of trust is hidden deep in live-streaming

At the opening of this article, I started on the topic of trust, and here we are again. Online platforms are with content, product, and community are the best ways to generate trust.

Women in their late 20s to mid-30s make up the majority of Taobao live-stream viewers and consumers. When watching, they care a great deal about the level of knowledge the host has about the subject. The more knowledge they have, the more trust they have in the host’s product recommendations.

There’s a lot that even the most traditional of businesses such as Farming can learn here.

Nick Welker in Montana, Yang Xiao in China, and other live-streaming influencers are seen as experts — people they can turn to for advice. Through their live-streams, influencers build relationships with their audience. They share expertise on the products and allow customers to understand it — what it’s made of, how it’s used, and where it comes from.

There is no doubt at all these stories are where the future of trust lies, and as always it’s undoubtably human.

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