The 2000’s kicked off the cloud computing revolution in technology companies by introducing a pay-as-you-go model for web services, which significantly lowered the entry barrier and increased the scalability for new technology companies – and so the “startup” era began. Soon after, a flood of e-commerce platforms and marketplaces began to disrupt supply chains everywhere, fuelling globalisation and forcing dominant incumbent players to adapt.
“Looking at the trade of fresh produce, you wouldn’t be blamed for wondering where the innovation is. Alongside all of the innovation in vertical farming, yield optimisation, sensors and connected devices, genetic modification, climate adaptation and regenerative and sustainable practices, it is perhaps not obvious from the outside that the actual way fresh produce is traded has changed little in the past 20 years,” comments Harvex CEO Alex Guilleux.
Recent research into the export process of major fresh produce exporters revealed an average of 40 touch points – both external and internal – to negotiate and execute a trade. These touchpoints comprised of private messaging groups to check prices, calls to find a buyer, emails to negotiate a deal and further emails to document and execute the trade. Exporters need dedicated teams to manage this labour-intensive process. Furthermore, the research revealed that exporters struggle with price discovery, with little reliable, real-time reference prices available. For international trade, government data tends to lag by months or even years and surveyed data is often unreliable. Inefficiency and information disaggregation are two problems that can be solved with a digital trading solution. So why doesn’t it already exist?
“Speaking to both buyers and sellers of fresh produce, it became clear that neither side wished to trade with an unknown counterparty,” explains Guilleux.
“This trust barrier is the product of high single-transaction amounts, coupled with the counter-party payment risk posed by the standard payment terms and incoterms. Both parties preferred long-lasting trading relationships built up slowly, as opposed to a transactional approach. It is apparent that several platforms have attempted to build a digital trading platform to improve the trading process, only to suffer from a lack of liquidity and traction due to a failure to overcome the ‘trust barrier’.”
This is where Harvex came in: A New Zealand-headquartered online marketplace for the trading of onions.
Harvex is backed by New Zealand’s largest vegetable grower-exporter and developed in collaboration with New Zealand Trade Enterprise.
“Harvex takes a trust-first approach (as opposed to technology-first) by curating its exporters and buyers, to build a trusted network. Exporters are selected based on their quality, location, volume and proven trade history. Buyers are referred onto the platform and are thoroughly vetted for their reliability as trading partners. Harvex has a human touch – a network of on-the-ground agents in key markets who support buyers as they transition into a new world of trading.”
Harvex’s platform enables sellers to manage their entire trade workflow in one place; from offering product through to negotiating the trade and managing deliveries. They claim that this has reduced the trade process from 40 touchpoints down to only 20, resulting in a significant saving in labour hours for sales and documentation. The platform provides up-to-date price data based on live trading and is fast becoming a reference price for buyers and sellers.
“Due to the improvement in trade experience, exporters have been moving their existing trading relationships onto the platform and have in turn enjoyed access to the large pool of vetted buyers. Buyers enjoy a one-stop-shop for year-round onion supply, buying directly off renowned exporters from New Zealand, Egypt, India and the Netherlands.
“This model has seen Harvex enjoy exponential month-on-month growth in volumes and registered buyers. On the back of this success, Harvex has been able to further expand its in-market presence to more countries, and to introduce new global sellers to its year-round supply. At the moment we are mainly dealing with the onion trade, but hope to expand on this. By leading with trust, leveraging existing deep global relationships and coupling an in-market presence with digital, Harvex is addressing the hidden cost of fresh produce exporting and importing.”
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