Back in August 2019, 3 startup founders were appointed by Mahathir and Syed Saddiq as youth leaders in their fields of expertise to work with the previous National Economic Action Council (NEAC) lineup.
TheLorry is a digital logistics company while Jirnexu is in the fintech industry, and Hi HOME is in proptech.
In the NEAC, they were working on several concept papers, one of which had to do with finding a way to lower the price of fish to end consumers.
They intended to have fishermen sell their catches directly to users, and had already talked to a major e-commerce platform to launch the idea early this year.
And then the government shifted, and their services in the NEAC suddenly weren’t needed anymore. According to a Facebook post by Nadhir, the idea that they had in motion was also suddenly dropped.
However, not all was lost, because Nadhir and Radzi’s efforts there eventually led to them co-founding Ourfarm, AirAsia’s new B2B agriculture e-commerce platform, with Lalitha Sivanaser, CEO of AirAsia’s duty-free e-commerce platform Ourshop.
(For those curious, we couldn’t get an answer from Hann on why he’s not part of it too, but it’s safe to assume that he’s focusing fully on Jirnexu once again.)
Lalitha, who’s CEO of Ourfarm, shared a little more about how this all came to be in an interview with Vulcan Post.
Making The Most Out Of An Unfortunate Situation
For those still unfamiliar with Ourshop, it was AirAsia’s first venture into e-commerce in 2018, and it enabled customers to purchase duty-free products online and collect them at the airport or in the airplane.
However, when the pandemic hit, suddenly no one was able to fly, planes were grounded, and borders were closed. It seemed like Ourshop no longer had a purpose.
Then Tony Fernandes stepped in and told the team that they couldn’t just sit around and do nothing. In the span of a week, they turned Ourshop into a home delivery business, leveraging on their logistics arm Teleport.
At the same time, they ran a campaign called Save Our Shops (S.O.S).
During that campaign, Lalitha shared, “Tony came up and said, ‘Hey, you know what, we need to also onboard fresh produce so that we can help farmers that are in trouble,’ because that’s the time when there were lots of articles that came out about Cameron Highlands farmers who had to dispose of their produce.”
Ourshop began working with middlemen to achieve this, but Lalitha soon realised that they were charging very high prices.
Though it was good sales for AirAsia, they quickly understood that it wasn’t the right thing to do for the consumers.
AirAsia’s own restaurant Santan was also finding it hard to get their fresh produce at the right price, with the prices getting hiked up.
To find a solution for this, Tony got Lalitha a contact from the Ministry of Agriculture (MOA) to see what could be done about the current situation.
“We learnt that we weren’t helping the farmers in any way because farmers don’t have the capability of selling items in small quantities, they sell in bulk,” Lalitha recalled.
“They also haven’t been educated in how to break up their produce for sale in smaller quantities, how to grade their produce or how to deliver it themselves.”
Therefore, middlemen were crucial because they were the ones to do the above before selling to larger grocery stores.
However, these middlemen weren’t the perfect solution because they also faced supply chain issues during the MCO, since they weren’t transportation companies and thus couldn’t transport the produce easily.
Not Letting Good Ideas Go To Waste
In light of this situation, MOA called for 3 companies to present their proposals on how to overcome the dilemma.
As one of these companies, AirAsia came up with Ourfarm’s B2B programme to connect farmers directly to businesses while educating the farmers at the same time.
Here’s how Nadhir and Radzi got involved.
Lalitha shared that Tony was friends with the two entrepreneurs, and as he was aware of their previous involvement and ideas in the NEAC, he invited them to work on AirAsia’s proposal together.
Their original B2C proposal was eventually refined into a B2B one, and in less than 8 weeks, Ourfarm was ready for launch.
Ourfarm cuts out the middlemen and lets farmers sell their fresh produce (vegetables and meat) directly to businesses with a minimum order of 50kg. Thanks to AirAsia’s comprehensive ecosystem, the prices can be reduced by up to 25%.
Additionally, farmers can receive training on digitalising their business with e-commerce courses from AirAsia’s RedBeat Academy.
With recent news of AirAsia’s lay-offs and their efforts in pushing out unlimited travel passes to bring in revenue, however, I curiously asked Lalitha where the capital to launch Ourfarm came from.
“There’s very little investment into Ourfarm at this point in time because it was only tech investments, and we have our own tech companies to build it,” she explained.
“The staff that we have are all internal staff whom we are repurposing to do this project as well, and we’re using our existing office space so we are very low-cost.”
Ourfarm will monetise by charging businesses a logistics fee, and in the future, they plan on having warehousing and import/export permits to drive revenue too.
Bringing Their Best To The Table
At the moment, TheLorry plays a role in aiding Ourfarm’s operations with its network of 7,000 lorries and pickup trucks that can be mobilised in 60 minutes for pickups and deliveries.
According to Lalitha, Radzi brings to the table his familiarity with farming environments, and when they go into phase 3 where they’ll begin building Ourfarm’s warehouses across Malaysia, his experience with property would come into play.
Ourfarm is currently still in phase 1 of its operations, and it has 45 farmers and poultry breeders on board.
At the moment, the farmers they’re sourcing are government related ones (those who are solely dependent on MOA to get their land and farming tools), but as they move into phase 2 and 3, they’ll be working with more semi-independent farmers and fully private farmers too.
Farmers within Klang Valley are also their current focus as it will make travel and the transportation of fresh produce easier.
“We’ll use the next few months to understand and refine the processes first before expanding outside of Klang Valley,” Lalitha concluded.
- You can read more on what we’ve written about AirAsia here.
Featured Image Credit: Nadhir, TheLorry