Benzinga | May 21, 2021 09:01AM EDT

Farmmi Reports Establishment Of Zhejiang Farmmi Ag Supply Chain Co.

Farmmi, Inc. ("Farmmi" or the "Company") (NASDAQ:FAMI), an agriculture products supplier in China, today announced the establishment of Zhejiang Farmmi Agricultural Supply Chain Co., Ltd. Leveraging more than two decades of experience in China's agriculture industry, Farmmi plans to build on its core business of high quality agricultural products to grow into a comprehensive service provider for the agricultural industry chain.



Ms. Yefang Zhang, Farmmi's Chairwoman and CEO, said, "As China's economy has grown, the country's agriculture industry has also continued to improve. Nevertheless, the industry still faces legacy inefficiencies such as transportation delays that lead to food waste, lagging information about customer needs that result in poor demand predictions and small profit margins in an industry that continues to rely heavily on labor."

The Company plans to invest in companies with storage facilities which could extend the Company's logistics network. At present, the penetration rate of the digital economy in agriculture in China is estimated to be only 8%, compared with 36% for industries in China as a whole. The number of rural internet users exceeded 300 million, while number of agricultural products sold via internet or supply chain is still small. Compared with other industries, the digitization of agriculture in China still lags behind.

Agricultural products require an extensive supply chain, including storage and cold chain facilities, due to the freshness and quality control required, which presents both challenges and opportunities for the agricultural supply chain. On the other hand, recent years have witnessed the rapid expansion of agriculture e-commerce. Community group buying, which allows a group of residents within the same housing area to buy together in bulk, has gradually gained popularity. With the expansion of supermarkets, fresh stores, agriculture e-commerce and O2O (online to offline) platforms, the integration of online and offline retail channels presents an irreversible trend. Therefore, the Company plans to expand its presence in smaller local and larger regional storage facilities, as part of its strategy to become a comprehensive service provider for the agricultural supply chain.