E-trading platform Bijak is helping small and medium-size agri traders expand their business

The Indian agriculture industry reached a value of Rs 63,506 billion in 2020. As of 2021, it employs 58 per cent of the Indian population. The National Statistical Office (NSO) reported that the Gross Value Added (GVA) by agriculture and allied sectors to the economy in 2020-21 was 20.2 per cent. In fact, it was one of the few sectors that grew during the pandemic. Despite these lofty achievements, there is room for improvement. Poor infrastructure, lack of transparency, credit issues, supply chain and logistics challenges affect agri traders of this unorganized sector every day.

Agritech is coming to be seen as a solution to most of these challenges. This is evident in the growing popularity of the Agriculture Infrastructure Fund, which has already crossed the Rs 8000-crore mark. Even though agritech has been gaining popularity over the last few years, agri traders were on the fence regarding embracing tech solutions openly. The Covid pandemic, however, has pushed them to consider digital platforms seriously. Phased lockdowns and restrictions have disrupted the traditional format of agri trade. Moving to e-trading platforms is the logical next step for small and medium-size agri traders. In this piece we look at Bijak, an agri-trading platform that has seen high levels of engagement over the past two years, to see why they have been able to achieve their level of success.

Bijak, India’s No.1 agri-trading app, is a one-stop e-marketplace for agri traders like commodity suppliers, mandi aadathis and other institutional players. It is used by traders in more than 1200 locations across 28 Indian states and territories. The platform allows trade in over 100 agri commodities, and hit half a billion dollars in annualized gross merchandise value (GMV) in 2021. They achieved this by solving real-life business challenges faced by agri traders, namely real-life supply chain and credit issues. Let’s look at some of the key aspects and features of the Bijak platform below.

Counterparty discovery

Bijak has created a unique trading platform populated with verified aadathis and suppliers. In the case of buyers or mandi aadathis, the verification process is based on various criteria like their daily volumes, timeliness in making payments, deductions made in payments on their orders, their reputation in the mandis, the number of different regional suppliers they regularly deal with, their performance at a stock-keeping unit (SKU) level, past payment history, etc. Similarly, suppliers are onboarded after cross-checking the supply volume, their list of counterparties, their performance in terms of delivery history and commodity quality, etc.

The Bijak algorithm tracks the performance of users over various metrics and provides ratings accordingly. Higher ratings improve a trader’s visibility on the app and their chances for successful new trade deals.

Mandi Rates and Bijak Marketplace features

The Mandi Rates feature on Bijak fetches rates in real time for 100-plus commodities from more than 750 mandis across India. This allows traders to fix their rates before making an order.

Bijak Marketplace allows Buyers to post commodity requirements and Suppliers to post commodities for sale. This feature runs on a recommendation engine algorithm that fetches the best matches to speed up the deal process.

Accessible and responsive design and localization

Bijak platform has been designed to engage agri traders, many of whom have not used apps other than WhatsApp on their smartphones. The Bijak app design mirrors real-life agritrade deals and transactions.

Various features like bookkeeping and e-invoicing have been added to create a digital workspace for the agri trader. WhatsApp and SMS integration keeps the users on track while interacting with the app.

Localization, or use of regional languages and terminologies on the app, customer support and tutorials in regional languages, etc. too have helped users feel at home on the platform. It has also helped Bijak facilitate pan-India trade by removing the language barrier issue.

Digital bookkeeping

Bijak provides agritraders with an alternative to traditional bookkeeping or bahi-khata. The traditional method is reliable to an extent but it doesn’t allow agri traders to record business and payment transactions on the go. With Bijak, users can record all counterparty details, orders, and payment details in a digital format in one place. Similarly, E-Bijaks help suppliers create e-invoices on the move. This helps them maintain digital records of all their orders, invoices, payments etc. In other words, Bijak primes users to conduct business efficiently and scale up easily.

Working capital with Bijak Credit

More than 70 per cent of agribusiness runs on credit and out of these, most agri traders don’t have access to formal credit. The lack of transparency and high perishability of fresh produce prevents NBFCs (Non-Banking Financial Companies) from lending to them. This situation forces agri traders to take loans from informal lenders at high capital costs of 24 per cent to 48 per cent. Thanks to the end-to-end traceability provisions set in place by Bijak, the NBFCs have no qualms about giving credit to Bijak-verified users. The Bijak Credit feature provided on the app allows verified buyers to apply for credit and receive it in a matter of hours. Plus, the capital cost to Bijak Credit users is less than 20 per cent.

Timely payments

Bijak-verified buyers who perform well on the platform are given a Payment Guarantee tag along with ratings. This allows them to easily apply for Bijak Credit and also makes them more attractive to counterparties. Bijak user data shows that up to 80 per cent of users can easily do online transactions thanks to the intuitive design of the platform. The remaining users require a bit of handholding on their first try and this is provided by the customer care team. Simple features like Payment Reminders help suppliers remind buyers or aadathis to make payments on time, while simultaneously helping buyers maintain short payment cycles. These, in turn, affect their ratings positively.

Logistics feature

Most agri traders will attest to the fact that it’s difficult to find timely, reliable transportation at competitive rates. Coordinating transportation for agri commodities with dozens of transporters is time-consuming. For agri commodities, delay in transportation leads to depreciation in value. This translates into losses worth lakhs of rupees for suppliers and low-quality commodities delivered to buyers.

Bijak’s latest foray into logistics has been in direct response to its user requirements. Bijak users can now book trucks for their orders through the app. A single request from a supplier or buyer is all that is required to initiate the simple truck booking process. Bulk booking allows Bijak to arrange transportation at 5 per cent to 10 per cent lower rates than the market value. Stringent onboarding processes ensure that only the most reliable transporters are brought on board.

The pilot programme rolled out in UP, Maharashtra, Rajasthan and Madhya Pradesh have been successful. More than 10 per cent of orders made on Bijak now include logistics booking via the app. Out of these, more than 90 per cent see successful conversions. Bijak users can now make orders with confidence, knowing that their commodities will be delivered on time.

The way ahead

Bijak believes that its success lies in understanding the users, clever planning and strategic execution by a highly accomplished tech team. The Bijak team is made up of 100-plus experienced individuals from various backgrounds who have been shortlisted on stringent standards. The skill sets of selected members are consistently upgraded with regular training and feedback as it is the only way to maintain their competitive advantage in a fast-evolving market.

In the next five years, Bijak intends to expand to more regions and create a formidable database that can be used to deploy Artificial Intelligence (AI) solutions to create a more responsive platform. Agritech may have entered the scene at a time of great uncertainty, but it has altered the way agri traders conduct business. Agritech is solving age-old problems and allowing users to scale up quickly. Bijak users see business growth in a matter of months, and this pace of change is now becoming the new norm.

(Nikhil Tripathi is co-founder, Bijak.)