The Need For A Digital Marketplace

April 1, 2021    

The global shrimp market is huge: in 2020, the major importing markets alone were responsible for $12.8 billion of warmwater shrimp. However, opportunities for further growth – such as trading shrimp on an online marketplace – have been limited due to several factors. Buying and selling parties aren’t eager to provide data – an absolute must for digital platforms to work successfully – and shrimp trading also differs greatly per company and country.

A common factor in trading, however, is trust. Mutual trust between buyers and farmers, to produce high-quality shrimp on the one hand, and to pay a fair price for the crop on the other. In a digital marketplace, data reliability and consistency are crucial for building trust between farmers and buyers. Many start-ups and companies are trying to facilitate such online connections, but it isn’t an easy task. They also try to help farmers access financing and insurances, giving them the means to invest. The shrimp sector, however, still has some catching up to do in terms of digitalization and data transparency. Which digital trading solutions are already in place? What are their aspirations and challenges? Let’s take a look at several digital platforms initiated in major sourcing countries. Indonesia: JALA’s SmartFarm and marketplace In Indonesia, start-up JALA helps farmers optimize their production by collecting and analysing data to reduce the risk of shrimp diseases. JALA has also launched an app which includes a trading feature that farmers can use to sell their shrimp directly to local markets, retailers, and even end users. “The goal of the trading solution we developed is to connect farmers and buyers to provide a faster payment transaction. The majority of shrimp traded by our shrimp farmers go to processing companies, and we try to sell 5-10% of it locally,” Liris Maduningtyas, CEO of JALA said.

In a digital marketplace, data reliability and consistency are crucial for building trust between farmers and buyers. Many start-ups and companies are trying to facilitate such online connections, but it isn’t an easy task. 

“The shrimp we sell locally gets a barcode for traceability. This way, end users know where their shrimp comes from and can read the story behind it. As such digital trade has not been done before, we are in the course of getting processing companies onboard on this mission of increasing traceability through digitalization.”

In February, JALA launched its SmartFarm system that supports its digital marketplace. SmartFarm aims to optimize shrimp production by applying digital technology and Internet of Things (IoT), by way of sensors that monitor and measure the water quality in the ponds. The data gathered supports farmers in adhering to good aquaculture practices and optimizing their production. “We’re currently building the know-how to use the data we’ve gathered for risk assessment to optimize productivity. We become the co-manager of the farms by helping farmers through our technology, providing them with access to funds and insurance, so they can improve their cultivation and output,” Maduningtyas said. JALA currently targets 20 ponds to be part of the SmartFarm system, and aims to reach 100 by the end of 2021. “All shrimp coming from these SmartFarms that are a product of JALA are rebranded by us. In a way, we produce shrimp without actually owning a farm. This is a new and innovative way of doing things,” the CEO of JALA added.
India: Aquaconnect’s AquaBazaar Like JALA in Indonesia, Aquaconnect in India, by way of its app, digitizes farm data to improve productivity and to facilitate connections between farmers and input suppliers, banks, and insurance companies. Aquaconnect Chief Growth Officer Arpan Bhalerao is working on a post-harvest marketplace for Indian farmers: AquaBazaar. This online platform will enable farmers to sell directly to buyers. The marketplace aims to reduce risks in transactions by providing transparency between buyers and sellers and to help farmers gain access to credit to continue their production. Buyers, on the other hand, are not only able to source products according to their needs, they can also forecast region-specific supply. Buyers and sellers that want to use AquaBazaar first have to be verified before they can join the platform. Farmers can upload the details of their produce, such as species, sizes, availability, and harvest date, after which buyers can place their order. Products sold via AquaBazaar are fully traceable and include farm certifications. While this project is quite ambitious and will likely have great impact, AquaBazaar isn’t yet available commercially, but is set to launch in Q2 of 2021. “We’re currently testing a pilot programme. Talks have already been initiated to establish partnerships with processors and seafood buyers to source seafood directly from farmers,” Bhalerao said.

The marketplace aims to reduce risks in transactions by providing transparency between buyers and sellers and to help farmers gain access to credit to continue their production. 

Ecuador: XpertSea’s data-driven marketplace Meanwhile in Ecuador, Canada-based company XpertSea aims to optimize shrimp trade by combining a data-driven market place with a same-day payment scheme to allow both sellers and buyers to expand their business. “We offer farmers timely access to cash flow instead of waiting days or weeks to get paid. When farmers trade with us, we ensure they are paid 80% of the crop’s value on the same day. This gives them rapid access to fresh capital for buying feed and restocking their ponds,” Mikael Lefebvre, Chief Revenue Officer of XpertSea said. “Meanwhile, buyers can access precise and objective data about the crop, so they feel secure they’re receiving the same product they paid for.” For producers like Carlos Santos, owner of Oro del Mar in Ecuador, the option to secure a cash flow allows him to buy feed and continue growing additional crops. “It has helped me run my operation more smoothly and generate additional cycles more effectively, while retaining existing buyer relationships since I can still select which processor I want to work with,” Santos said. To increase transparency and trust in transactions, XpertSea’s platform allows users to assess crop data before closing the deal. The marketplace also includes a smartphone app with AI features, which allows producers to capture accurate shrimp health and quality data simply by taking a photo. This enables them to adjust feeding regimes, identify anomalies in animal growth, and make better decisions on how to grow their crops and transact business.
The initial launch of the marketplace in 2020 was limited to Ecuador, with India gaining access in 2021. The pilot project started in the second half of 2020. In its first few months of operation, over 5.4 million kg of shrimp was traded, providing essential cash flow to farmers.

China: Local trading platforms and e-commerce

Some markets, like China, are already familiar with e-commerce. Well-known web shops such as, or enable buyers and even consumers to source directly from producers. Besides aiming to facilitate faster and easier transactions for buyers and sellers, these platforms also promote the local economy. China’s thriving digital consumerism has also steered buyers and sellers of local shrimp to conducting their business on the internet – shortening transaction time by cutting out the middleman. “Most of the local shrimp traded on the online platforms and web shops is fresh shrimp. Producers usually use the freshness as an advantage over frozen imported shrimp. Especially now that China enters the off-peak period of shrimp consumption, producers are working extra hard to promote their shrimp on these platforms,” an industry source in China said. Apart from promoting domestic shrimp, the Chinese government is also actively establishing connections with other Asian economies through the member-based web platform China ASEAN Marine Product Exchange, which enables the sale of shrimp and other seafood produced by ASEAN countries. The Exchange is defined as a “fair, just and open” platform for “online trading, offline settlement, and cross-border settlement” of bulk seafood spot products. After completing the online transaction, products are then traded at the Fujian Pilot Free-Trade Zone. However, the website doesn’t clearly indicate whether these products are traceable or certified as sustainable. As the platform itself is in Mandarin, international transactions will be challenging.
Roadblocks to going fully digital Many of the companies discussed above aim to transform the shrimp sector into a data-driven industry, and in order for that vision to be achieved, transparency is a must. Most platforms work with a membership system, and getting parties involved is the first hurdle to overcome. In countries where the shrimp sector hasn’t yet fully matured or modernized, information campaigns on digitalization and providing farmers and producers with internet access are the keys to convincing them to trust and invest in these digital marketplaces. Take for example JALA and Aquaconnect. Both companies work with a lot of small-scale farmers in Indonesia and India who are not easily convinced that a digital marketplace is a reliable platform for selling their products. “Traditional supply chains generally pose resistance to such digital platforms as they disrupt existing trading channels,” Bhalerao of Aquaconnect said. “As we are challenging the familiar face-to-face transactions, we have to support the small-scale farmers in transitioning from physical to online transactions.” In order to be a reliable marketplace, platforms must first be recognized as dependable and safe, not only in terms of data quality but also in terms of security of financial payment schemes. How can transactions be as safe and reliable as possible? How can the quality of products be ensured and guaranteed? What about data security? These are questions that digital platforms must be able to answer. Financing the platforms is another challenge, which prevents some digital marketplaces from succeeding or fully taking off. Ensuring the quality, reliability and consistency of data is also of great concern. “Farmers won’t share their data unless they realize the benefits. To bring farmers into a data-driven ecosystem, we put a lot of effort into making them understand why consistent gathering and capturing of data is important. We do this with the help of our awareness programmes and continuous training,” Bhalerao added.
A market-driven marketplace? Most of the platforms available today are mainly based on what producers are supplying, but not so much on the overall demand from buyers or needs from the market. The imbalance between supply and demand could put a lot of pressure on prices. If these digital marketplaces can strike the right balance between the two, they may be able to take off rapidly. Furthermore, by showing what happens on the production and trade side by way of transparent data and information, these marketplaces also have the potential to pave the way for investments and other incentives that stimulate efficient and sustainable practices. “If we want to encourage producers to be more sustainable, the best way is probably to give financial incentives. We want to come to a point that we can tell a farmer: ‘Since you produce sustainably, using hard-driven and reliable data, buyers are likely more willing to pay a few cents more as an incentive,’” Lefebvre said. At this time of great insecurity in the seafood market in terms of demand, price and production, digital data-driven marketplaces could help the shrimp industry become even more profitable and sustainable. And that’s something all parties could benefit from.