Our Challenges
Supporting Improvements to Agricultural Productivity and the Development of Chinese Agriculture through a Unique Business Model
We proposed a unique business model that contributes to the development of Chinese agriculture.
China is a country with a very long history and a vast land mass. Agriculture is said to be the foundation of the nation, and as a national policy, China has developed on two pillars: industry and agriculture. In China, rice farming flourishes in the Yangtze River basin, and double- and triple-cropping is practiced in the warmer southern regions. The northern part of China is a vast dry-field farming region with wheat and corn as the main crops. However, production has not been able to keep up with the country’s rapid population growth. As a result, China has become increasingly reliant on food imports. In order to ensure a stable supply of food for the world, it is essential for China to improve its food self-sufficiency rate. In addition, there is also an outflow of young people to urban areas taking place in China, resulting in a shortage of workers and a rapidly aging population in rural areas. The introduction of additional agricultural machinery is an effective way to solve these problems. Efforts to introduce agricultural machinery, in fact, began in China back in the 1950s, but there were many problems. For instance, even though rice farming was common, combine harvesters for dry-field farming were mainly available, and much of this agricultural machinery was outdated.
Kubota began its expansion into China in 1994, but local manufacturers were strong at that time, and we were faced with the challenge of how to convey the advantages of our products, build a sales network, and promote brand recognition. However, in 1996, we were presented with an opportunity to change things. At a certain exposition, a competition was held in which manufacturers demonstrated their combine harvesters being used for rice harvesting. While most of the local manufacturers’ combine harvesters were for field crops, Kubota’s was for rice crops. Fortunately, Kubota came out top overall and attracted a lot of attention. This was the start of our efforts to build our own sales network. In addition, we proposed a unique business model called “harvesting contractors.” Under this model, harvesting contractors purchase combine harvesters and are contracted by farmers to undertake harvesting work during the harvest season, traveling across China from one farming village to another. Kubota’s combine harvesters were appreciated by both harvesting contractors and farmers on account of their speed and low harvest loss.
Kubota’s combine harvesters were highly appreciated by harvesting contractors on account of their high durability and the fact that Kubota provided after-sales services in line with the harvesting contractor business model.
The operating hours of combine harvesters in China are around ten times longer than in Japan, and they are used for more than 1,000 hours a year, so high durability and performance are a must. In addition, services such as the replacement of consumable parts are also important. In order to meet this challenge, we put in place an unprecedented system in which a service truck always accompanies harvesting contractors as they make their way around the country. The accumulation of these efforts helped us build trust and acceptance among Chinese farmers. What with this and the fact that the name “Kubota” has an auspicious meaning in China, we were able to gain recognition as a brand. Kubota subsequently introduced rice transplanters and tractors, and built new production sites to promote local production, thus firmly establishing its roots in China and continuing to move forward together with farmers.
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