{"id":25773,"date":"2017-11-15T22:52:16","date_gmt":"2017-11-16T03:52:16","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/on-demand-drone-at-farm-friend-digitalization-in-agriculture-takes-off\/"},"modified":"2017-11-26T13:52:39","modified_gmt":"2017-11-26T18:52:39","slug":"on-demand-drone-at-farm-friend-digitalization-in-agriculture-takes-off","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/on-demand-drone-at-farm-friend-digitalization-in-agriculture-takes-off\/","title":{"rendered":"On-demand Drone at Farm Friend: Digitalization in Agriculture Takes Off"},"content":{"rendered":"<p>Agricultural drones aren\u2019t new technologies by any means. The Association for Unmanned Vehicle Systems International (AUVSI) projects that agriculture will account for 80% share of the commercial drone market globally. [1] \u201cThe work of 40 farmers spraying pesticide can be done by one single agricultural drone\u201d, said Yu Yang, founder of Farm Friend. [2]<\/p>\n<p><iframe loading=\"lazy\" title=\"DJI \u2013 Introducing the Agras MG-1\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/4gGMMPMm9MQ?start=3&#038;feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><strong>Industry Pain Point<\/strong><\/p>\n<p>Despite the fact that agricultural drones increase yield and lower cost, new problems emerged. Professional agricultural drone pilots are needed due to the complex nature of piloting drones. Information asymmetry leaves farmers extremely difficult to find drone pilots. Drone pilots, on the other hand, have long idle time and low labor utilization. [3]<\/p>\n<p><strong>Digitalization of Agricultural Drones<\/strong><\/p>\n<p>Farm Friend, founded in early 2016 in Beijing, serves as an information-sharing platform that bridges supply and demand. Similar to Uber, Farm Friend doesn\u2019t own agricultural drones, but rather connects agricultural drone pilots (supply) and farmers (demand). At present, Farm Friend deploys more than 5000 drones over 60000 hectares in 10 Chinese provinces. [4]<\/p>\n<p>Digital efforts are ongoing to revolutionize the supply chain:<\/p>\n<p><em>Short-term Practices<\/em><\/p>\n<ul>\n<li>Digitalize Supply Chain<\/li>\n<\/ul>\n<p>As seen from the process flow diagram in Chart 1, a complete cycle of drones spraying involves six steps. Farm Friend takes care of all the steps except the actual pesticide spraying work. [5]<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/farmfriend_1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-26472\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/farmfriend_1.png\" alt=\"\" width=\"727\" height=\"206\" \/><\/a><\/p>\n<p>For example, the screenshot in Chart 2 (English translation in red font) demonstrates the user interface of order placement for farmers (left-hand side) and order information for drone pilots (right-hand side). [6] Farmers can easily place an order by inputting their preferred date and time, crop name, hectare of farmland, and contact information. Drone pilots get the information once the order is dispatched. When the work is done, drone pilots click \u201cOrder Completed\u201d and can expect bank deposit once performance feedback is received. The dispatch algorithm prioritizes short distance between farmlands and drone pilots, minimizing the travel time and cost for drone pilots. [7]<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.28.42-PM.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-26488\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.28.42-PM.png\" alt=\"\" width=\"631\" height=\"568\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.28.42-PM.png 1218w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.28.42-PM-300x270.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.28.42-PM-768x691.png 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.28.42-PM-1024x921.png 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.28.42-PM-600x540.png 600w\" sizes=\"auto, (max-width: 631px) 100vw, 631px\" \/><\/a><\/p>\n<ul>\n<li>Offline Engagement and Digitalization<\/li>\n<\/ul>\n<p>In many online-to-offline business models, success boils down to the company\u2019s offline capabilities. Farm Friend partners with offline players in the industry to engage users. They empowered local agricultural product retailers with SaaS to digitalize their operating system. [8] At the same time they leveraged retailers\u2019 close relationship with farmers to conduct user acquisitions and engagement. [9] For example, farmers who don\u2019t know how to use Farm Friend\u2019s app would go to the offline spots to get help from local retailers.<\/p>\n<p><em>Medium-term Solutions<\/em><\/p>\n<ul>\n<li>Data Informed Crop Health Plan<\/li>\n<\/ul>\n<p>Agricultural drones currently collect data to monitor spraying performance. Drones equipped with specialized cameras, GPS and mapping tools can survey fields from above to track flying trajectory, spraying efficiency, pesticide coverage, etc. [10] Moving forward, Farm Friend would offer integrated solutions of crop health. By utilizing big data and more advanced sensors, Farm Friend could collect multispectral data that identifies crop\u2019s disease and weeds, measure irrigation, analyze soil health, and detect biotic stress early on. [11] Chart 3 produced by a drone from PrecisionHawk, depicts vegetation in near infrared light to show chlorophyll levels. [12]<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.30.40-PM.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-26500\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Screen-Shot-2017-11-15-at-10.30.40-PM.png\" alt=\"\" width=\"468\" height=\"493\" \/><\/a><\/p>\n<ul>\n<li>Standardization of Pesticide Usage<\/li>\n<\/ul>\n<p>Currently there\u2019s no industry standard of pesticide usage in China. Improper use of pesticide not only decreases yield, but also posts significant challenges to environment and food safety. To address the long-standing environmental issues and food safety concern, Farm Friend is cooperating with governmental agencies and research institutes to formulate industry standards on how to properly apply pesticide by drones. [13]<\/p>\n<p><strong>Other Recommendations<\/strong><\/p>\n<p>Besides doubling down the investment in big data, Farm Friend could also consider the following areas.<\/p>\n<p><em>Short term<\/em><\/p>\n<ul>\n<li>Improve market liquidity \u2013 aggressively acquire users on both supply side and demand side, to further improve dispatch efficiency through network effect.<\/li>\n<li>Build brand loyalty \u2013 establish farmer community and provide farmers with information such as irrigation know-hows, industry news, and technology tutorials.<\/li>\n<\/ul>\n<p><em>Medium term<\/em><\/p>\n<ul>\n<li>Enhance offline presence \u2013 strengthen relationships with local players in the upstream and downstream of the industry. This helps build competitive advantage to defend themselves from new industry joiners.<\/li>\n<li>Maintain good relationship with government agencies.<\/li>\n<\/ul>\n<p>Looking outside the window of Farm Friend&#8217;s office in Wangjing, China\u2019s new \u201cSilicon Valley\u201d, Yang was proud of what his team has accomplished in less than two years. He was also excited about the ~$1 trillion agricultural market that\u2019s not yet penetrated by Internet. [14] However there are still lots of uncertainties. Though the first mover, how could they maintain competitive advantage against industry leaders like DJI who might forward integrate to enter this market? How will they achieve profitability? What\u2019s the pricing strategy towards their price sensitive users? How to balance the complicated stakeholders\u2019 interest in a traditional industry of thousand years of history? No one knows the answers. Perhaps only the vast farmland can tell.<\/p>\n<p>(Word Count: 786)<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/farmfriend_4.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-26732\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/farmfriend_4.png\" alt=\"\" width=\"658\" height=\"412\" \/><\/a><\/p>\n<p><strong>Bibliography<\/strong><\/p>\n<p>[1] Darryl Jenkins and Dr. Bijan Vasigh. \u201cThe Economic Impact of Unmanned Aircraft Systems Integration in the United States\u201d, Association for Unmanned Vehicle Systems International, <a href=\"http:\/\/www.auvsi.org\/our-impact\/economic-report\">http:\/\/www.auvsi.org\/our-impact\/economic-report<\/a>, accessed November 2017.<\/p>\n<p>[2] [3] Yu Yang. Interviewed by Li Chen, July 28, 2017.<\/p>\n<p>[4] Farm Friend. \u201cAbout Us.\u201d <a href=\"http:\/\/www.farmfriend.cn\/aboutus\">http:\/\/www.farmfriend.cn\/aboutus<\/a>, accessed November 2017.<\/p>\n<p>[5] Wang, Xianwei. \u201cBusiness Model of Sharing Economy in Agriculture.\u201d AgriGoods Herald, Sep 14, 2017. [http:\/\/paper.nzdb.com.cn], accessed November 2017.<\/p>\n<p>[6] Farm Friend. \u201cSoftware Download.\u201d <a href=\"http:\/\/www.farmfriend.cn\/new_file.html\">http:\/\/www.farmfriend.cn\/new_file.html<\/a>, accessed November 2017.<\/p>\n<p>[7] [8] [9] Hao, Jie and Xue, Jingdong. \u201cFarm Friend: Redefining Agriculture.\u201d China Economic Information Journal, Oct 31, 2017. <a href=\"http:\/\/www.zgjjxx.net.cn\/2017_21\/a29.html\">http:\/\/www.zgjjxx.net.cn\/2017_21\/a29.html<\/a>, accessed November 2017.<\/p>\n<p>[10] Shunwei Capital. \u201cFarm Friend Announced the Completion of RMB50 Million Series-A Financing with Gobi Ventures as the Leading Investor.\u201d Medium, Jun 7, 2017. <a href=\"mailto:%5Bhttps:\/\/medium.com\/@ShunweiCapital\/farm-friend-announced-the-completion-of-rmb50-million-series-a-financing-with-gobi-ventures-as-the-e4cef423e271%5D\">[https:\/\/medium.com\/@ShunweiCapital\/farm-friend-announced-the-completion-of-rmb50-million-series-a-financing-with-gobi-ventures-as-the-e4cef423e271]<\/a>, accessed November 2017.<\/p>\n<p>[11] Fintan Corrigan. \u201cMultispectral Imaging Camera Drones In Farming Yield Big Benefits.\u201d DroneZon, October 10, 2017. [https:\/\/www.dronezon.com\/learn-about-drones-quadcopters\/multispectral-sensor-drones-in-farming-yield-big-benefits], accessed November 2017.<\/p>\n<p>[12] Anderson, Chris. \u201cAgricultural Drones \u2013 Relatively cheap drones with advanced sensors and imaging capabilities are giving farmers new ways to increase yields and reduce crop damage.\u201d MIT Technology Review. [https:\/\/www.technologyreview.com\/s\/526491\/agricultural-drones], accessed November 2017.<\/p>\n<p>[13] Wang, Xianwei. \u201cBusiness Model of Sharing Economy in Agriculture.\u201d AgriGoods Herald, Sep 14, 2017. [http:\/\/paper.nzdb.com.cn], accessed November 2017.<\/p>\n<p>[14] National Bureau of Statistics of People\u2019s Republic of China. \u201cAgriculture Product.\u201d Statistical Yearbook 2016. [<a href=\"http:\/\/www.stats.gov.cn\/tjsj\/ndsj\/2016\/indexch.htm\">http:\/\/www.stats.gov.cn\/tjsj\/ndsj\/2016\/indexch.htm<\/a>], accessed November 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Uberization is taking place in the agricultural space. A Chinese startup Farm Friend is bringing on the revolution.<\/p>\n","protected":false},"author":9607,"featured_media":25808,"comment_status":"open","ping_status":"closed","template":"","categories":[28,1911,154,2191,2123,2465,318,94,212],"class_list":["post-25773","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-agriculture","category-agriculture-technology","category-china","category-chinatech","category-digitalization","category-drone","category-sharing-economy","category-startup","category-tech","hck-taxonomy-organization-farm-friend","hck-taxonomy-industry-technology","hck-taxonomy-country-china"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>On-demand Drone at Farm Friend: Digitalization in Agriculture Takes Off - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/on-demand-drone-at-farm-friend-digitalization-in-agriculture-takes-off\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"On-demand Drone at Farm Friend: Digitalization in Agriculture Takes Off - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Uberization is taking place in the agricultural space. 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