MimosaTEK has always been a company concentrated on the needs of their farming customers. When they first launched their Internet of Things (IoT) solution in 2014, they focused on making a usable system that could help farmers manage their irrigation plans and use less water. Over the years, as their customer base grew, MimosaTEK also piloted a new business strategy to increase revenue and outsource their existing vegetable-farming customers’ crops to processing and exporting companies. When COVID-19 struck, they needed to rely on that customer focus and ability to pivot to adapt to the new normal.
2020 – A Year of Changes
The impact of COVID-19 had been universally felt. Communities, upended. Supply chains, disrupted. Business plans, no longer relevant. For MimosaTEK, the lockdowns in Ho Chi Minh City, Vietnam, meant an uncertain future.
Throughout 2020 and early 2021, the revenue from the IoT system and vegetable outsourcing business decreased. To protect public health and reduce infection rates, all non-essential businesses were closed. Hotels and restaurants no longer needed produce so MimosaTEK’s smallholder farming customers in the Central Highlands of Vietnam could not sell their crops. Some companies declared bankruptcy, while exporting businesses stopped operating. As the effects of the lockdown and COVID-19 spread, farmers stopped investing in agricultural inputs like MimosaTEK’s IoT solution.
A New Path Forward
In order to survive these changes and protect their farming customers, MimosaTEK needed to quickly pivot their operations.
With processing and exporting companies no longer a viable solution, MimosaTEK looked to the local Vietnamese markets to cope with the COVID-19 impacts. By connecting farmers to wholesalers, essential markets, and supermarkets, MimosaTEK was able to once again bring revenue into their business and to farmers. ￼The company also leveraged a new digital account, From Farms To Families (FaFa Fresh) – Powered by MimosaTEK, on Facebook and Lazada VN, which now enables them to sell directly to wholesales buyers.
￼On the farmer-side of operations, MimosaTEK negotiated with the farmers to share the difficulties by accepting later payment than before. This helped MimosaTEK maintain a good cash flow.
However, this new opportunity is not without challenges. “It’s definitely been a learning experience,” shared Le Lan Anh, Chief Financial Officer of MimosaTEK. “We didn’t have the investment or logistics originally, so we needed to work with vendors for transportation.”
For transportation, a vendor was particularly useful because, during lockdown, they had permission to transport vegetables as well as staff that were able to work during the lockdown period. As other organizations look to pivot business strategies and enter a new market, Le Lan Anh offers this advice, “…anyone looking to pivot their business – make sure you find good partners to work with. You need to be able to communicate with them and trust they’ll follow operational expectations.”
Improving Resiliency with WE4F
In order to continue implementing their new business strategy, MimosaTEK received a COVID-19 resiliency grant and technical assistance support from the South and Southeast Asia Regional Innovation Hub (S/SEA RIH). The grant helps MimosaTEK support field and marketing staff salaries, repair their warehouse and processing workshop, and purchase safety equipment for workers. Technical assistance, in the form of business model analysis, advised MimosaTEK on how to improve its profitability.
“[S]upport at that time was very valuable, it was not only better for our cash flow, but also the valuable advice from TA program,” shared Le Lan Anh. “The pivot without resources behind it [would] never have happened and this support was a very important part of that resources.”
Positive Results for the New Strategy
As a result of MimosaTEK’s pivot, 181 farming households have been reached – 47 of which are women. There was also about 500 tons of vegetables brought from farmers to wholesales buyers during the COVID-19 lockdown, which was four times more than their normal operations. And, MimosaTEK created 2.5 times the number of jobs during this time, with over 80% of them being filled by women.
As MimosaTEK plans for 2022, it becomes clear that the organization has recovered from the effects of COVID-19. They’re now looking to scale their vegetable outsourcing by targeting both local and export markets, and by developing tailored products that meet local market demands, like ready-to-cook vegetable packets, and vegetable safety certification from VietGap.
For their IoT solution, the innovator signed a contract with farmers for a stable price, which will encourage farmers to produce more and integrate MimosaTEK’s farming practices, reducing the cost of each kilogram of food produced, offering a better price to wholesalers, and still increasing farmers’ profits.
To continue improving their scalability, MimosaTEK is in the discussion stage for a second round of technical assistance from S/SEA RIH. The support will focus on identifying preservation techniques and processing technologies, strengthening MimosaTEK’s overall scalability.