In order to highlight the benefits of going international, we are pleased to present you our first showcase and a great success story from the SMARTRURAL Spanish company, which successfully entered the Chilean market.
Learn more about their experience in this article!
What is SMARTRURAL?
SmartRural aims to develop the digitization of the agricultural sector, focusing on two target sectors which are viticulture and olive-oil production.
The SME is currently focusing on various topics such as sustainability (improving resource optimization through data analysis), innovation and the mathematical treatment of information within production processes.
Its international experience is centered on the agrifood sector, dealing with precision agriculture industry, digitalizing data and providing services such as satellite imagery and SAS.
Its objective and priority market is the Spanish market but the markets of Portugal, France, Morocco, Italy, Argentina, Chile, Peru and Mexico will be addressed as a priority, although not exclusively.
The main output of the SME effort will be to position SmartRural as a benchmark company in the digitization of the agricultural sector in the Mediterranean basin, Latin America and other reference markets.
Why choosing Chile for internationalisation activities?
Chile is one of the largest agricultural producers in Latin America and an important player in world agri-food markets. The intensification of agriculture has brought with its significant increases in yield, placing this sector among the most productive in the region.
From 2006 to 2016, exports from the Chilean agricultural sector increased from 8,899 million dollars to 15,095, an increase of almost 70%. Specifically, Chilean fresh fruit is known internationally for its quality and has positioned itself as a highly demanded by the most demanding consumers in the world.
Chile requires higher productivity at the primary level and focus its development strategy on creation of value, offering to the market foods of a high degree of differentiation due to its quality.
In short, there is a growing demand in all kinds of elements that automate the field, suppose less wear for the worker and adapt to the needs and characteristics of the Chilean fields. Access to technology in agriculture is essential and offers opportunities for Spanish companies in areas such as precision agriculture systems, systems that improve workforce efficiency, climate control and monitoring systems, traceability and pest control systems.
What strategy did the SMARTRURAL team use for this internationalisation?
SmartRural knew the importance of opening to a globalized market and creating new alliances in the agrifood sector. In 2019, after an extensive investigation of the Chilean market, the team made a partnership with a local oenologist so he could present their products to different vineyards to start different projects in 2020. After that in less than a year they were participating in specialized fairs and doing a commercial tour.
They were able to launch the SmartRural proposal in Chile commercially in a few months because there are platforms to link clients with technological solutions for agriculture and promote these proposals. They had more than 100 contacts and stakeholders, of which more than 30 meetings for presentation, implementation, follow-up, etc. were held. SmartRural started negotiations with their first client in Chile on our first commercial tour and we started working with a Chilean vineyard in October 2019.
What are the key outputs and benefits obtained from the internationalisation?
There were many advantages on internationalizing their products and services to Chile. SmartRural gathers new knowledge and data regarding a different country and its agricultural politics and techniques, expanding that way its data base and technical expertise. Also, the adaptation of SmartRural products helped them see what could be more intuitive and useful for the final client helping the SME to adapt its product to every client preference.
It is also an enriching experience by being able to work with a different culture and different ways of achieving the same objectives. Furthermore, one key output is the risk reduction due to market diversification, since Chile is in a different hemisphere, their work calendar for agricultural operations is the opposite of what we find in Spain helping them to have work all year around.
Ultimately SmartRurals’ brand increased its value due to this international presence in Chile.
What are the main challenges the SME had to face?
Mainly access to data (data is the raw material for SmartRural). In a fierce worldwide competition, open access to data without any barriers is a short-term competitive advantage, enabling rapid construction of data analysis visualizations. However Chilean farmers do not digitalize all their data and do not have organized databases, which is a challenge to companies such as SmartRural.
Public acceptance – There are still some concerns regarding this type of technology such as high acquisition values, high maintenance, difficulty in managing data, etc. Also, the impact on jobs: People still fear that automation of tasks takes positions from individuals.
Training – Precision agriculture is growing, and more and more Chilean machinery sellers are adapting their offer. However, there is still some reluctance to face this trend, since many producers prefer simple and functional versions, with a low risk of electronic failure. That is why in many cases importers do not dare to introduce more technical equipment in the country because they are not sure that the market has the training to demand them.
Also, Chilean PIB is lower than the Spanish one which creates the necessity to adjust prices. Since SmartRural offers low-cost products and services, the margin for profit is smaller in Chilean market since prices must be adapted to the country’s economic reality.