1.

Overview
Agriculture contributes to ~18% of India’s GDP while employing ~41% of the workforce (130MM Farmers) making it the life
of the economy with secondary and tertiary producers dependent on its output. On the input side, India’s agri-inputs
industry comprising of four key sub-sectors - crop protection (Fungicides, Herbicides, etc.), crop nutrition (fertilizers,
stimulants, etc.), seeds (Staples, fruits & vegetables, etc.) and Farm machinery & accessories. According to FICCI, its value
stood at US$ 5 billion (2018), with domestic consumption at US$ 2.77 billion. The industry is set to grow at an 8.1% annually
and touch US$ 8.1 billion by 2025. Further, as per the report from Kantar ICUBE, June211 of the total population of 1433
million, 485 million individuals reside in urban India and rest (948 million) resides in rural India. 67% of the urban population
i.e., 323 million individuals in Urban India are active internet users while 31% of the rural population i.e., 299 million
individuals in Rural India are active internet users. While internet users grew by 4% in urban India reaching 323 million users
in 2020, digital adoption continues to be propelled by rural India –registering a 13% growth in internet users over the past
year.

2. Problems Identified
In Dec18, Amazon launched wholly-owned food retailing venture that started engaging with farmers and government bodies
to develop a sustainable farm-to-fork model by investing in technology2. During this time, with daily farmer engagements
team could identify that there are bigger problems to be solved on the crop input side of Indian agriculture to improve
quality, yield and farmer’s income. Indian agriculture has heavy dependency on monsoons and thus is seasonal with three
major cropping seasons – Kharif (Jun-Oct), Rabi (Nov- Apr) and Zaid (Mar-Jun). Due to this demand prediction for crop
inputs becomes extremely difficult and every year shortages/surpluses are observed leading to extreme price variations.
Further, as per FICCI report (refer graph in inset) India’s consumption of crop
protection is amongst lowest in the world primarily driven by low purchasing
power of farmers, lack of awareness among farmers and limited reach &
lower accessibility of products. Major brands invest heavily in R&D to bring
out better crop input products each year and operate at lean margins but
sale of their products is dependent on the retailers or distributors loyalty
rather than customer loyalty. Often it is observed that retailers push
products of inferior quality but high on margins to farmers leading to poor
efficiency and yield. Voice of customers/stakeholders: “…with multinational products, margins are small, and because
results are good, farmers don't come back for more chemicals quickly. Local companies offer higher margins, and the results
are not as good, and so farmers have to come back sooner for more purchases.” – Ganpat, Agriculture Service Center (Krishi
Seva Kendra) owner, Pimpalgaon
“My retailers explicitly bundles products by insisting that I buy certain products together, as a package. If I ask only for the
Yara fertilizer, he tells me it is out of stock” - SonaRam, Small landholding farmer in Khedgaon, near Pune.
To add to these COVID-19 has had significant impact on agriculture value chain; seed industry alone witnessed a 15-20%
drop in sales due to disruptions in supply chain and Atmanirbhar Bharat Abhiyan of GOI requires a comprehensive and
integrated approach to build sustainable and efficient agriculture supply chain for pan India especially for crop inputs. This
will ensure better yields, improve farmer’s income and place India higher on self-sufficient category. Lastly, India’s
sustainability initiative: In the traditional offline retail system, given the retailers benefit with larger sales, farmer often ends

1 https://images.assettype.com/afaqs/2021-06/b9a3220f-ae2f-43db-a0b4-36a372b243c4/KANTAR_ICUBE_2020_Report_C1.pdf

2https://economictimes.indiatimes.com/industry/services/retail/amazon-to-source-directly-from farmers/articleshow/72861804.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Privileged and Confidential document: The case study is for Amazon Customer Excellence (ACE) Challenge 2021 only and shall not be
shared/disseminated further with any third party.
up buying and spraying more chemicals than are actually required for the cultivation of his crops. Excess chemicals harm the
soil and release Green House Gases which are harmful to the environment.

3. Amazon: The Enabler

Amazon India is a market place with more than 60 FCs in 15 States, total storage capacity of over 32 million cubic feet,
covers more than 99% of the Indian pin codes for delivery of orders, website/app is available in six languages, have multiple
business verticals like Amazon Pay, Amazon Fresh, Amazon Easy stores and one of the biggest captive customer service. In
SMBhav 20213, Amazon shared it’s plan for the Agri-tech sector and touched upon making agri-inputs more accessible to
farmers. Amazon Category team has identified many categories such– Seeds, Plant Protection, Plant Nutrition and Farm
Machinery & accessories to initiate the ground works but agriculture is not restricted to farming on land rather evolving
with hydroponics and aquaponics. Further, animal husbandry also offers a bigger canvas to explore as it supplements
farmer’s income and India tops in cattle wealth in the world4 with 305.5 Million heads, accounting for 30% of world’s
inventory. While Amazon category team is gearing up and aligning focus to onboard farmers as customers and digitally
enable crop Input sellers across India to expand reach; you as a team is tasked with devising a holistic blue ocean strategy to
drive this initiative and transform the lives of Indian farming households.
Phase 1:
1 While case talks about broader nuances reflecting industry dynamics, What are the underlying deeper pain points
that impact Indian farmers at grass root level?
[Hint] Selection, Pricing, Transparency, Availability
2 Out of ~130 million farmers 80% of them are marginalized, and crop growing choices whether staple or cash crops
vary from region to region. Further Animal Husbandry and Dairying activities support agriculture, contributes to
health & nutrition of the household and offer supplementary incomes. Can you help Amazon estimate the right size
of prize (target customer size and business opportunity) that it can become by 2024?
3 What can be Amazon’s other key focus areas and why?
4 Agriculture is a highly regulated industry and sellers need licenses to store and sell? What are some of the
challenges and risks expected on this front? How can Amazon proactively resolve them?

** All Hints can be used as starting markers and solutions shouldn’t be restricted to them only.

3 https://www.amazon.in/b/?node=20391471031

4 https://beef2live.com/story-world-cattle-inventory-ranking-countries-0-106905

Privileged and Confidential document: The case study is for Amazon Customer Excellence (ACE) Challenge 2021 only and shall not be
shared/disseminated further with any third party.