"We originally started a digital market place in Australia for fruit and vegetable growers and companies who add value to the products and also some processors," explains Antonio Palanca, CEO of the company.
Gary Dickenson and Antonio Palanca at Asia Fruit Logistica last week.
"After reaching an important milestone in our business, which was having over 100 registered sellers in our Australian marketplace, we decided it was time to try and connect our digital market in Australian to Asia. Three months ago we opened an office in Hong Kong and began the process of selecting buyers, we are very selective about who comes into our marketplace, it is not an open market but a privately facilitated digital market."
HiveXchange recruit and qualify buyers, and seek to understand their interests and terms and buying record, as well as credit worthiness, before they are allowed into the market. "At the moment we have three really good buyers in Hong Kong trialling with us and we have interest in buyers in Singapore, Taiwan, Korea, Japan, India and Sri Lanka. Our idea is to just get a few buyers in each one of those locations and begin to introduce them to our suppliers in Australia."
The idea of the digital platform is to take the risk away from both the exporters and the importers. Antonio believes that traditional digital marketplaces like Alibaba which are great for manufactured products, it is much easier to trust a manufactured product, but in fresh produce everybody relies on relationships. In his view it is only possible to trust the digital environment if you have really good quality organisations inside that digital environment.
"Once that market is populated with companies who are trained in how to use it, we automate a lot of the contracting and the things that reduce risk into the market. This means that one person can trade with many more players in a digital market than they can via emails and phone calls and face to face etc."
HiveXchange only deal in commercial volumes, in Australia it is a minimum order of one pallet and for international orders it would be a minimum of one airfreight or shipping container. The company are targeting only large commercial volumes.There are currently 60-70 categories of fruit and vegetable products from suppliers and farms around the Australia, which means they can extend the supply seasons. The fruit and vegetables come from Queensland, Victoria and Western Australia, which all come into the market at different times so a buyer has the opportunity to set up relationships to support his business through a longer season.
"We also facilitate shipping by providing access for the growers to service providers. In Australia we have a couple of excellent service providers in Melbourne, Brisbane and one in Sydney, these service providers have locations at the central markets and consolidation points with coldrooms and ripening facilities, they are licensed exporters. They can basically manage the export trade on behalf of the growers, because we collect information about carton size, weight etc. we can also use our software to calculate the cost of the export process based on the prices of the service providers in the market. Its a bit like buying on Ebay and using paypal and selecting shipping method.
Antonio says the response from the Australian exporters has been good. The company has been very focused on working with a few exporters to go into Hong Kong and they are really excited about it. The advantages for the exports are that it gets them off the phones and away from unstructured emails, it also makes it much easier to make quotations and communication is easier. If the supplier speaks English, while the buyer speaks Chinese, there a real-time translation function built in.
"This really helps communication and operations, buyers in Hong Kong really like it, not only can they communicate in a structured way, they can get digital information which they can use to communicate to their buyers via Wechat."
Anthony goes on to say that the really interesting thing is that in a few years one in every eight dollars will be transacted through a digital platform. Fresh produce is probably one of the last industries to embrace E-commerce.
"We think the reason for that is because no one has really understood that you have to create a lot more trust based protocols to help people trade. Trust based E commerce is a new spin on e commerce, when organisations begin to see that they can scale trust with digital technology then a light will go on and opportunities will open up for everybody."
For more information:
Antonio Palanca
HiveXchange
Tel: +61 412 886 652
Email:tony@HiveXchange.com.au
www.HiveXchange.com.au