DEPARTMENT OF AGRIBUSINESS MANAGEMENT

AND ENTREPRENEURSHIP
COLLEGE OF ECONOMICS AND MANAGEMENT
UNIVERSITY OF THE PHILIPPINES LOS BAÑOS

NAME: ANGELA KIRSTEN T. VILLALUZ

DATE OF SUBMISSION: SEPTEMBER 6, 2019

Assignment Number 1
Searching for a Research Topic

I. Broad Research Area: (Indicate the research area chosen from the broad areas presented)
Online Marketing of Agricultural Produce in the Philippines

II. Brief Literature Review

Agriculture produce is essential to human life because humans are highly dependent on it. It
is a source of life. Food is one of the major commercialized products that can be obtained from
an agriculture produce. As population increases, demand for food also increases. Agriculture
produce is done by farming and cultivating harvests by farmers.

Agriculture is the life fountain of the Philippines; however, it is not prioritized by the Philippine
government. It is declining in an alarming rate since the year 1980. There are several factors
which affect the declination of the agriculture sector namely continuous land conversions, climate
disturbances, and low output growth.

According to Philippine Statistics Authority (PSA), the agriculture sector ranked second on
employment among the three major sectors namely agriculture, industry, and services (Teves,
2018). Most of the agricultural lands are cultivated by small hold farmers. Most of them belongs
to the marginalized sector with lack of support and assistance from the government. Farmers may
encounter certain problems that requires immediate solution but unfortunately, there are times
that they are left to deal with it themselves. Respective government bodies such as the
Department of Agriculture offers monetary compensation but not enough to compensate the
farmer’s loss.
 In the year 2017 up until present, there has been numerous cases of oversupply of
produce from local small-hold farmers. Oversupply affects the prices of the produce. Local
farmers are forced to sell their products at a relatively low price which results to low income and
a possibility of unemployment. There is also massive importation of agriculture produce which
also badly affects the farmers. Also, it forces some local farmers to dispose the excess of the
produce since it has not reached the standard of the market.

The issues concerning agriculture produce were disseminated quickly through social
media platforms and other forms of media and it caught the attention of people who wanted to
support local small hold farmers and growers in the country.

Fresh produce from farmers are usually delivered to physical grocery stores, wet and dry
markets, and hypermarkets. An alternative market was made to be able to extend help to the local
farmers and as well to the benefit of consumers. With the advancement of technology and network
resources, online grocery stores had been the best substitute for physical grocery stores.

Online grocery stores act as an online service that share an advocacy of local farming. It
exists to support local farmers and uplift the agriculture sector in the country. Most importantly, to
showcase the hard work of farmers.

It directly sources its products from local farmers especially to those who were affected by
calamities. The prices of the fruits and vegetables are relatively cheaper because the products
are directly priced by the farmers. However, it is advisable to purchase in bulk to obtain lower
prices. Also, it can be an additional source of income to local farmers because their income is no
longer dependent on the size of their farm land. It can also address the problem of oversupply
and help prevent it.

Direct marketing attracts consumers because the products are guaranteed fresh from the
hands of local farmers. Some of the online grocery stores hand-picked their products from farms
to maintain quality and freshness.

Consumers can have access to fresh and high-quality harvests of fruits and vegetables
since internet access is made easy these days. Online grocery services promote convenience of
transaction. It offers door-to-door delivery service and pick-up of orders. In this way, consumer’s
time is valued.

It also eliminates the function of middlemen because it shortens the link between the farmers
and consumers. Time is conserved. The shipping expenses is covered by the consumers.
 Online grocery stores are not only limited to fresh produce and convenience. It also
advocates eco-friendly packaging and zero-waste. The online grocery services have become
more environmentally sensitive which is a good marketing attraction to consumers. Environment-
friendly packaging is a consumer demand.

This study will only focus on online grocery stores that caters fruit and vegetable farmers or
growers in the country. Fruits and vegetables are the type of agriculture produce prone to
oversupply, price changes, and fluctuation of demand and supply.

There are existing online grocery stores that supports local farmers. These are the following
online grocery stores in the country that shares the same advocacy namely Session groceries,
The Superfood Grocer, Real Food, Homegrown Organics, Green Earth Heritage Foundation,
Sierreza, Hi Fred, etc.

Online grocery stores have their physical offices, like Session Groceries is based in Baguio
City and Hi Fred is based in San Juan City, Manila. On the other hand, Sierreza operates both
online and physical. Sierreza has already two branches, Los Baños, Laguna and Diliman, Quezon
City. Fortunately, the owners and operators of the online grocery stores are very accommodating.
They are willing to share the values and goals of the business to further expand the knowledge
of people about agriculture and business.

This study will give voice to people who wants change in the way agriculture is practiced in
the Philippines. It will give voice to the local farmers whose potential were caged in capitalism and
to consumers who wants to help towards sustainable agriculture.

Online grocery stores already helped a number of local farmers especially in Baguio City
through Session Groceries (Quadra-Balibay, 2019). It can be concluded that it really helps them
to gain additional profit and maximize their skills and abilities as farmers.

Online grocery services still lack market acceptance in the Philippines compared to other
countries. It is still considered a niche in the country because of barrier of culture. Filipino
consumers are used to purchase their needs thru sari-sari stores and wet and dry markets (Go,
2017). Filipino consumers are meticulous in nature. They want to see the product first before
buying to ensure quality and value of their money (Castillo, 2018). The reason why some of
Filipino consumers are hesitant to do online shopping especially if the product is food.

The main challenge of online grocery stores is to convince Filipino consumers that it is a
great substitute for physical shopping of food. Without the consumers, the beneficiary of the online
grocery stores, which are the farmers, will not be sustained.
 However, the trend is changing especially at this moment. Social influencers are promoting
online groceries because of its numerous advantages. It has advantages to the farmers,
consumers and other constituents that may benefit in the business. It may also help to boost the
economy and agriculture sector of the country.

This study aims to find more efficient and innovative ways to improve the online grocery
business. It will also help to strengthen the e-commerce industry in the country. It will help the
farmers in a way to prevent price manipulation and inefficiency of markets.

This study will be a benefit to those who are already involved in the online grocery business
industry and as well as to those who plan to start their own online grocery business.

III. Research Topic:

Online Grocery Stores as an Alternative Market for Fresh Fruits and Vegetable Produce

IV. References

Castillo, F.G., Jr. (2018). Consumer Buying Behavior: The Multicultural Influence in the
Philippines. The International Journal of Business Management and Technology, 2(2), 71-75.
ISSN: 2581-3889

Go, J. (2017). Will online grocery store and cashless payments finally gain traction in PH?.
Retrieved August 29, 2019, from https://business.inquirer.net/223527/will-online-grocery-stores-
cashless-payments-finally-gain-traction-ph

Quadra-Balibay, A. (2019). Baguio City Farm Fresh Produce Now Sells Online Via Session
Groceries. Retrieved August 29, 2019, from https://www.goodnewspilipinas.com/baguio-city-
farm-fresh-produce-now-sells-online-via-session-groceries/

Teves, C. (2018). Agriculture’s share in PH employment increases in January. Retrieved

August 22, 2019, from https://www.pna.gov.ph/articles/1038439