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B2B e-commerce company mjunction services ltd, a joint venture by SAIL and Tata Steel, is looking to bring in “more efficiency” in tea trade to ensure better price discovery for sellers and convenience and ease of operations for small and medium buyers across the country.
The company is looking to bring in a host of features including arranging dedicated auctions for specialty teas, organising auctions on more number of days to focus on different categories of teas, setting up small state-of-art warehouses in tea growing centres for preserving quality of teas and providing seller finance support in partnership with banks to ensure availability of liquidity for meeting working capital requirements.
The Jorhat Tea Auction Centre in Assam managed by mjunction services was launched amid the pandemic in May 2020 in collaboration with the Tea Board of India. It was primarily aimed at bringing a change in the trade, especially for small buyers.
According to Vinaya Varma, MD, mjunction, the existing e-auction platforms available for sale of tea only carries out simple digitisation of the physical auction system wherein sellers have to typically appoint brokers to conduct auction on their behalf. However, on the Jorhat Tea Auction centre, the sellers can get on to the portal and sell directly. “It is seen that the tea is of good quality and there is good demand but they (sellers) are bleeding because they are not getting prices. Our aim was to see if our platform can make it a fairplay and provide an even playing field. Lot of sellers are coming into our platform and most of the buyers are first-time buyers,” Varma told businessline.
Total quantity offered for sale through e-auction on the platform is close to 33 lakh kg. Few high-grown CTC tea marks which are being offered for sale through the platform are Hookhmol, Aideobarie Premium, Deha, Rungliting Tea Estate, Muktabari, Kamarbund and Lankashi.
There are nearly 200 sellers on the platform including big estates, bought leaf factories, agency houses and Small Tea Growers (STGs). Teas from Nagaland and Arunachal Pradesh are also being offered through the platform.
Best of Assam CTC, orthodox, specialty and green teas from STGs and organic growers are also sold through the platform. “These are still early days; the system needs to be adopted by more sellers. We are looking at the possibility of dedicated auction for specialty teas and also looking to organise auctions for more than one day in a week to focus on different categories of tea,” he said.
Modernising the auction system
mjunction has come up with a machine learning system that can estimate the e-auction prices, based on quality parameters as well as trends. The algorithm considers a host of factors like quality parameters, the gradation of the tea garden and also of the particular lot, the prices obtained at the other auction centres, the previous prices obtained and a host of other factors to arrive at the price prediction for the upcoming auctions. It has also deployed a sophisticated recommender system to tag the correct lot of tea to the appropriate buyer and vice versa.
The algorithm identifies the set of buyers who have been displaying similar behaviour and based on the same, right grade of tea is suggested to the right buyer by the algorithm.
mjunction claims to have been able to bring down the sales cycle time to close to 26 days as compared to 45 days in the normal e-auction platform. “We have done digitisation and are able to bring down the sales cycle time significantly so the seller gets the money faster and consumers can get fresh teas,” he said.
It has also facilitated finance by tying up with banks to provide support to sellers. “We recognise that so far we haven’t disrupted but we are committed to it because we believe that tea trade can be made more efficient,” he said.