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Market Bazar Web ApplicationAnalysis on Current Venture Capital Market in China

ABSTRACT Crops Bazar is basically an electronic market that can be used to keep transperancy in the whole market system from farmer to the businessman. This system will help the farmers to know the actual price of the product in the markets so that the farmers can sell their product at the real price and gain profit. Moreover, in this system


The huge consumer market potential and booming economy in China attract enormous foreign direct investments to capitalize this unprecedented opportunity. Foreign venture capital is not exceptional from this trend. They, however, still have to face constant challenges from regulations, market practices and business cultures in China. To be successful in this marketplace totally different from their origin, foreign venture capitals need to adapt their previous strategies and experiences and test it through trial and error.

This report is to get overall picture about current venture capital market in China. Then it will focus on the market position of foreign venture capitals. The report is followed by the analyses and summary on investment and exit strategies used by foreign venture capitals. Finally, the report will discuss the potential trend in China venture capital market.

Key Objectives

  1. To get in-depth analysis on current venture capital market in China and foreign venture capital’s market position in China.
  2. To analyze and summarize the investment strategies and exit strategies used by foreign venture capital in China.
  3. To make prediction on future market trend, especially foreign venture capital.

Key Chapters

  1. General introduction on venture capital
  2. Historical development and current venture capital market in China
  3. Detail market position analysis on foreign venture capital in China
  4. Investment strategies of foreign venture capital in China
  5. Exit strategies of foreign venture capital in China
  6. Future trends in China venture capital market

Introduction on Venture Capital

Venture capital is source of funds to small firms that cannot establish credit relationships with bank or other financial institutions. As Gompers (2001) states: Companies that lack substantial tangible assets and have uncertain prospects are unlikely to receive significant bank loans. These firms face many years of negative earnings and are unable to make interest payments on debt obligations.

Start-up high tech firms are exactly the type of firms that banks are least likely to lend to because of poor information availability and lack of tangible assets or assets that can be readily evaluated. Firms developing software or new technology for the communications or biotech industries are largely investing in human capital. In a nutshell, the VC firm is a relative small financial services professional organization that functions primarily to: (a) assess business opportunities; (b) provide capital; and (c) monitor, advise and assist the firms in its portfolio.

By investing, the venture capitalists accept substantial tranche of illiquid equity that converts their status to something like partners to the entrepreneur. The goal of the venture capitalist is not only to increase the value of that equity but also to eventually monetize the investment through a liquidity event such as an initial public offering or sale to other investors. The other way of reaping the reward is liquidation due to the firm failure and bankruptcy. In all of these scenarios, the venture capitalist exits their investment to complete the VC process. The venture capital cycle is briefly visualized in below chart.

Chart 1 Fund flow of Venture Capital Cycle

Source: National Venture Capital Association Yearbook 2008

The National Venture Capital Association in the United States defines venture capital as money provided by professionals who invest alongside management in young, rapidly growing companies that have potential to develop into significant economic contributors. There are a number of key attributes associated with VC that distinguish it from other equity capital investments. Venture capital normally focuses on small firms that have great growth potential. These firms usually are not mature enough to be traded in public equity markets. Compared with public equity investment, venture capital investment has poorer liquidity with more severe information asymmetry and higher investment risks.

Venture capital investment is also different from angel capital. Managers of angel capital use their personal money to invest. In contrast, investments professionals who raise money from other investors manage venture capital. Angle capital invests more often in the seed stage of the start up firms than venture capital does. Finally, venture capital is different from non-venture private equity investments (such as buyouts, restructure, and mezzanine funds). Firms backed by venture capital usually have considerable growth potential.

For these firms, the cash flow generated from operations is usually insufficient to support finance growth and debt financing is usually not available. In contrast, private equity funds target more mature firms that have stable cash flows and limited growth potential. The Table 1 below summarizes the investment stages and types of funding for different investment styles.

Table 1. Types of Funding and Investment Stage

Source: A Guild To Venture Capital (3rd edition) by Irish Venture Capital Association

There are five stages (BVCA&PWC, 1998) in the development of venture-backed companies, which can be defined as: 1. Seed

2. Start-up

3. Other early stages (exploration)

4. Expansion

5. Maturity (exit).

The definition of the company stage is different with the definition of the financing round. The negotiation of a VC investment is a time-consuming and economically costly process for all parties. Neither the VCs nor the portfolio firms want to repeat the process very often. Therefore VCs have to balance the cost of negotiation and potential risks from one time investment. Typically, a VC will try to provide sufficient financing for a company to reach some natural milestone, such as the development of a prototype product, the acquisition of a major customer, or a cash flow breakeven.

Each financing event is known as a round. So the first time a company receives financing is known as the first round (or Series A), the next time the second round (or Series B), and so on and so forth. With each well-defined milestone, the parties can return to the negotiating table with some new information.

These milestones differ across industries and depend on market conditions. A company might receive several rounds of investment at any stage, or it might receive sufficient investment in one round to bypass multiple stages. One special situation is the ‘down round’. It is when the company does not meet milestones and the VC still needs to invest but at a lower valuation than prior round of financing.

Venture Capital in China

Why invest in China?

There are four major popular arguments behind for the investment rush to east.

Reason 1: High Rate of Economic Growth

China’s impressive economic growth for the past 30 years, averaging between 8% to 10% real growth per year, has been the envy of the developing world. The size of Chinese economy by the end of 2006 reached US$2.62 trillion, 13 times larger than that in 1978 when measured in constant RMB (MasterCard Worldwide Insight, 2007). According to Goldman Sachs China economic research (2003), per capita GDP expect to grow from less than $5,000 at that time to more than $30,000 in 2050 (refer to Chart 2). China will have a middle class of more than 500 million by 2025 – larger than the entire population of the United States.

It represents a huge emerging demand for everything from integrated circuits to cars. 500M mobile users, 130M Internet users, 104M broadband users and 4.5M college graduates every year could all transfer into huge business opportunity (represented in Chart 3). Based on the estimation (Chart 4) from Mckinsey, there will be sustainable market growth to 2025 in every business that related with people’s life and daily consumption.

Huge opportunities for venture capital are Internet (B2B, B2C, C2C, online gaming, website portal and web 2.0), semiconductors, technologies (clean energy, medical, biotech and traditional manufacturing), and consumer businesses (food, clothes, shopping and other entertainments).

Chart 2 China GDP Growth Forecast (2000-2050)

Source: Goldman Sachs 2003

Chart 3 China Energy/Material supply imbalance (2010)

Source: Goldman Sachs 2003

Chart 4 Urban Chinese Consumers Demand Forecast (2004-2025)

Source: National Bureau of Statistics of China; Mckinsey Global Institute Analysis
Reason 2: Inefficient Capital Market

In the United States and Europe, private and public capital markets compete as sources of capital. However, China does not yet have an equity culture despite the adoption of market-oriented policies. In China, the public equity market lists inefficient and unappealing state owned enterprises (SOE) most of the times. And government holds roughly 60-70% of share capital of most listed companies.

Few private firms are listed in the stock market due to legal and policy hurdle. China’s bond market is similarly underdeveloped. Chinese corporate bonds account for less than 2% of corporate financing.

Thin trading between banks and investors makes issuing bonds unattractive for fundraising or investing. Insurers and fund managers therefore have few fixed-income securities to hedge against mid- and long-term risks. The corporate bond market just started to function in late 2007 by allowing public listed firms to issue corporate debts. Around 95% of financing for Chinese companies now is still provided by bank loans.

The domestic banks, however, have tendency to provide loans to stated owned company rather than private firms, especially small and medium businesses (SMB). With the poor functioning financial markets and policy discrimination, venture capital and private equity become important sources of growth capital for private firms. It is one of the key reasons that venture capital is so popular among private firms in China across different industries even including traditional industries like food, hotel and travel etc.

Reason 3: Creative Solutions/Early Adopting Consumers

One of the most unexpected attributes of the emerging Chinese market economy is how consumer-savvy its entrepreneurs are. Even after decades of centralized economic planning, the Chinese remain consummate creators and marketers of interesting products. Definitely the creativity and innovations are only limited in certain business for talents availability and their professional capabilities.

Online gaming, wireless instant messaging, and wireless value added services are just three markets that the Chinese more or less created out of thin air. Each of these businesses has growing customer bases (and have spawned successful public companies like Shanda, Netease, Tencent, and Linktone). But none of them has significant participants yet in the United States. Different consumer behaviors contribute to this phenomenon as well. In below case study on Tencent, it provides a great example on how to innovate the Internet product offerings to cater the needs of online generation.

Case study: QQ of Tencent (Adapted from

Tencent (listed in HK stock exchange) is the #1 Instant Messaging (IM) service provider in China. Tencent’s IM community counts over 270 million active accounts and is said to be covering 95% of Chinese Internet users and 70% of China’s IM market (MSN/Yahoo account for the rest market). QQ is the brand for its IM. Same as other IMs, QQ is a free tool to use. Tencent, however, came up the idea to generate revenue stream by allowing users to buy and exchange virtual items (clothes and background image) online to decorate his or her QQ head icon. Tencent even created its own cyber currency called Q Bi and 1 Q Bi = 1RMB (0.14 USD) to facilitate the transaction and reduce barrier of online purchasing. The estimated revenue generated from those Internet value added services in 2007 is around USD$360M.

Reason 4: Risk-taking, Innovative Culture

In the last fifteen years, the privatization reform is one of the critical forces in stimulating China economy growth. This privatization wave also generated tens of thousands entrepreneurs. The business culture is naturally comfortable with risks and with developing innovative ways to solve problems and create wealth both for individuals and for society at large.

The successful stories of VC backed entrepreneurs further promote the risk taking culture in China and the awareness and popularity of venture capital. The Focus Media case below illustrates the power of business model innovation by its unprecedented expansion speed ever in China’s business history. There is no doubt that foreign VCs played an important role in this story to make Focus Media successful.

Case study: Focus Media China (Adapted from

Founded in 2003, Focus Media is China’s largest Digital Media Group in China now. The founder, Mr. Jiang Nanchun, came up with an innovative approach in operating out-of-home advertising network using audiovisual digital displays. Basically, the idea was to display the LCD near or in the elevators in commercial centers (like office buildings and shopping malls). While waiting for or in the elevators, people would watch the contents advertised in those LCDs.

By selecting and contracting with high quality commercial buildings, Focus Media was able to quickly build up its network scale and attract many advertising contracts. Tow foreign VC firms, Soft Bank and UCI, invested in the first round. And another five VCs, CDH, TDF, DFJ, WI Harper and Milestone, invested in the second round. Two years after operation, Focus Media was listed on Nasdaq with USD$172M IPO and now it is part of Nasdaq 100 index.

Historical development

Infancy stage: 1984 – 1995

In 1984, the Research Center of Science and Technology Development of the State Science & Technology Commission (SSTC) (now the Ministry of Science & Technology or MOST) cooperated with British experts to study how to develop high-tech in China. The British experts proposed that venture capital should be developed if China wanted to foster high technology.

In 1985, the Central Commission of the Chinese Communist Party and the State Council pointed out in the Decision of Science-Technology System Reform that venture capital could be set up to support the work of developing high-tech with quick change and high risk. It was the first time that the concept of venture capital appeared in an official Chinese Government document.

With the government decision to develop high technology industries, the Central Government and some local governments financed and set-up series of investment institutions that intended to pursue the venture capital business from 1985 to 1995. Examples are China New Technology Venture Capital Company, Shenyang Science-Technology Venture Development Risk Center, Shanxi Head Office of Science-Technology Fund Development, Guangdong Science-Technology Venture Capital Company, Shanghai Science-Technology Venture Capital Company, and the Science-Technology Venture Capita Company of Zhejiang Province. Moreover, venture centers (i.e., high tech incubators) were set-up in the majority of national high-tech parks.

Simultaneously, some overseas investment banks, funds and venture capital institutions also started to expand their business into China. For example, the Pacific Technology Venture Capital Fund subordinate to IDG entered China in 1992. It cooperated with science-technology commissions in Beijing, Shanghai and Guangdong, and set-up a number of venture capital companies focused on investing in technology companies. Also, some foreign capital or joint stock investment institutions established venture capital businesses.

Asia Venture Capital Journal (AVCJ, 2001) shows that $16 million was raised for venture capital investments in 1991. In 1992, the total funds raised jumped to $583million, a thirty-fold increase compared with the $16 million in 1991. The first wave reached its peak in 1995, with $678 million in investment (AVCJ, 2001).The first wave of venture capital investments was brought by international venture capitalists. The international venture capital firms accounted for more than 95% of the total fund raised in the early and mid 1990s.

The absolute dominance of international venture capital funds in China in the early and mid 1990s was mainly due to China’s strict regulations against fund-raising and the general lack of awareness of venture capital in China. Private fund-raising by individuals or private firms without government approval was strictly prohibited in China. This strict regulation essentially removed the possibility for venture capitalists to raise funds within China.

It meant that only international venture capital funds and state owned enterprises (SOE) venture capital funds could operate. International venture capital funds could bypass the regulation because they were incorporated and they raised funds outside of China. SOE funds relied on government appropriation as funding sources and did not have this fund raising problem either.

Early Growth: 1996 – 2001

From the mid-1990s, the perception of venture capital shifted from being a type of government funding to being a commercial activity necessary to support the commercialization of new technology. As there were still no laws or regulations about setting up foreign venture capital institutions in China, many overseas investment institutions established their branches in Hong Kong, aiming to invest in the mainland. They had also located representative offices in some major cities, primarily Beijing and Shanghai. Most of the VCs active in China in the early 90s were American firms.

The VC industry in the U.S. had matured and attracted a significant amount of funds. Shortly after 1995 a sharp increase from US$5 billion to US$110 billion in funds raised created the phenomenon of money chases deals (Gompers & Lerner, 1999). A cadre of experienced American VCs started searching the world for investment opportunities, attempting to replicate the Silicon Valley model. Since 1998, there had been a discernible recognition of the critical success factors necessary to create an environment in which venture capital could operate smoothly and flourish.

Specifically, the Government’s official decision to support the development of venture capital was the key factor that had allowed China’s venture capital industry to come into being in a new and more positive environment. In Beijing, alone, there were about 30 independent venture capital institutions, whose capital amounted to an estimated $450 million. In Shenzhen, there were at least 20 independent venture capital institutions with capital amounted to over $500 million. After 2000, China also experienced hard landing in its young VC industry due to dotcom bubble burst and came with huge casualties. It took the VC community 3 years to recover.

Fast Growth: 2002 – present

Although initial government-backed investment operations generally failed, there has been resurgence in venture capital activity since China’s admission to the WTO (Kenny, Han and Tanaka 2002). Capital available for investment in Mainland China keeps a steady growth trend from 2002. The capital size was increased to US$21.32B by 2007 from US$10.50B in 2002. The average compound annual growth rate (CAGR) reaches 15.2%. Venture capital investment grew rapidly from $480 million in 2002 to more than $3,247 million in 2007, invested in 440 China mainland or mainland-related enterprises (Zero2IPO 2007).

According to Zero2IPO report, USD$4B VC funds were raised each year in 2005 and 2006 for China investment. But China’s annual consumption was no more than $2B. The money chasing deal phenomenon started to emerge in China. Many foreign VC funds, especially first-time funds raised after 2005, had the pressure to pour out investment quickly to avoid US dollar depreciation against RMB and to get better deals under fierce competition. While the funding supply multiplied, quality deal flows did not increase at the same pace.

Under the simple supply and demand mechanism, valuations of the China deal kept at relative high level. However, considering the fact that a big portion of funding was focusing on local value-add service segments (i.e. internet, web2.0 and broadband etc.), the issue of fund’s over-supply was sector specific. To get higher return under the competition, VC firms started to invest in traditional business models such as hotels, travels and fast food chains beyond their core activities such as TMT (Technology, Media and Telecom) or Internet related businesses. It was the special phenomenon happened in China now that VCs were more like PE.

Legal and Regulations

According to Megginson (2004), the differences in the design and the degree of development of the PE/VC industry are due to institutional factors, with the country’s legal system being paramount. Two major factors are paramount in evaluating legal system: contract law enforcement and protection of shareholder rights through effective corporate governance. Cumming and Macintosh (2002) observed that PE/VC managers in high enforcement countries had a greater tendency to invest in high-tech SMBs, exit through IPOs rather than buybacks and obtain higher returns.

Cumming et al. (2004) further examined legal system effects on governance structure. Under better legal systems: the faster the origination and screening of deals; the higher the probability of syndication; less frequently funds of the same organization used to invest in a given company; the easier the board representation of investors; the lower the probability that investors required periodic cash flows prior to exit; and the higher the probability of investment in high-tech companies.

Lerner and Schoar (2005) show that in a bad legal environment, PE/VC managers tend to buy controlling stakes, leaving the entrepreneurial team with weaker incentives. Interestingly, valuations tend be positively correlated with the quality of the legal environment. Kaplan et al. (2003) go deeper into the contractual aspects and found that rights over cash flows, liquidation and control, as well as board participation vary according to the quality of the legal system, the accounting standards and investor protection across countries.

However, more sophisticated PE/VC managers tend to operate in the U.S. style irrespective of local institutional concerns. The authors show that managers operating with convertible preferred stocks are less prone to failure (as measured by survivorship rate). The results suggest that the U.S. contractual style can be efficient in different institutional environments. Bottazzi et al. (2005) corroborate some of the previous results and obtain further evidence on the home-country effect (PE/VC managers operating abroad tend to maintain the investment style used at home). This is observed in managers based in both good and bad legal environments.

The Chinese regulations governing foreign venture capital investment are chaotic and rapidly changing. In 2005, Chinese authorities issued new guidelines (effective in 2006) intending to foster domestic venture capital firms. There is no specific regulation to monitor and stimulate the VC activities in China. The new guidelines recommended that local governments provide financing assistance, favorable tax treatment, and direct investment in Chinese venture capital firms. They also provide less stringent capitalization, investment amount, investor qualification and regulatory requirements than those applicable to FICVEs (Guerrera, Yee and Yeh, 2005). FIVCEs instead are governed by 2003 regulations that include high investment and qualification thresholds, government approval requirements, and strict foreign exchange limitations on the ability to remit profits and dividends back to the investor (Hoo, et al 2005a).

Substantial legal and de facto restraints on the ability of FIVCEs to access the stock markets in China and overseas for IPO listings make exit strategies extremely difficult. For these reasons, foreign venture capital firms investing in China usually do not use FIVCEs but rely on offshore holding companies created to receive their investments. Foreign venture capital firms (most of which are U.S. based) investing in China generally have done so through the restructuring of Chinese companies into offshore investment vehicles.

These enable an easier exit from investments either by selling shares on international stock markets or through a trade sale to another foreign buyer. In January of 2005, Chinese authorities brought these transactions to a virtual standstill, however, with the issuance of new regulations preventing any onshore resident from establishing, controlling or owning shares in an offshore company without the approval of the Government, either directly or indirectly. The regulations were intended to stop managers of SOEs receiving venture capital investments from stripping state assets and selling them cheaply to overseas companies, and to preclude domestic companies from using the overseas vehicles to gain foreign investor tax exemption status.

However, they choked off legitimate transactions as well. There were no government approvals of offshore investment transactions in 2005. With only limited exceptions for transactions in process, foreign venture capital financing through offshore investment vehicles screeched to a halt in 2005 (Borrell and Jerry, 2005).

Then, in November of 2005, the Chinese authorities issued superseding regulations. These require registration of offshore investment vehicles with the State Administration of Foreign Exchange (SAFE), but do not require the agency’s approval of the transaction. They also require repatriation of all distributions of income from the investment within a fixed time frame. Like the previous regulations, the new ones do not describe specifically the registration process, the procedures involved, the scope of review nor the time required for completion, creating substantial uncertainty for foreign venture capital investors (Hoo, et al 2005b).

Despite this changing regulatory landscape, many U.S. based venture capital firms have active plans for substantial investments in 2006 – spurred by China’s high growth potential, the success of recent venture-backed startups on the NASDAQ including and China Medical Technologies – and by pent up demand after the 2005 halt in new investments (Borrell, Jerry and Aragon 2005).

Hidden risk and solutions

Lagging legislation and inexplicit policies in China created many uncertainties and entry barriers for foreign VCs. Below are summary of the critical problems:

China’s lawmaking on VC investment remains stagnant

Existing laws such as Corporation Law, Joint Venture Law, Patent Law, etc., in many aspects even contradict VC investment.

Does VC investment count as foreign investment? What status and treatment should it enjoy? The concerned authorities cannot provide clear answers to these questions.

It’s not clear that the amount of shares that foreign venture capital is allowed to hold when partnering with Chinese enterprises, and the way foreigners to remit in/out of foreign exchange are poorly defined.

There are three available approaches for foreign venture capital firms to enter China venture capital market legally.

Establishing offshore venture capital fund focusing on China

Establishing a foreign invested VC firm in China (Joint VC with local player/Wholly Owned Foreign firm) as a legal person entity

Establishing a foreign invested VC firm in China (Joint VC with local player/Wholly Owned Foreign firm) as a non-legal person entity

To avoid the legal and regulation barriers, foreign venture capital funds usually takes the offshore investment route. Foreign VCs will use offshore USD fund to invest into China deals’ offshore holding entities with all equity activities happening outside of Chinese jurisdiction. The distinction of USD offshore holding investment and RMB local entity investment is a particular phenomenon in China.

Offshore holding arrangement is a preferred structure for Chinese entrepreneurs and VCs as it provides a feasible and practical route for funding, divestment and all equity events. Its advantage and attractiveness to Chinese entrepreneurs and VC communities:

Go away from laws and regulations in China. Many of them are not friendly to venture activities, such as lack of preferred shares, stock options limitation, double tax etc.

Bypassing capital account control on foreign exchange.

More flexible and usually profitable divestment options by overseas IPO, M&A or trade sales.

Offshore route investment involves the following steps:

The Chinese founders set up an offshore holding company in Cayman Island or BVI with the shareholding structure and management control mirroring those of their local company in China.

With kind of swap scheme, transferring the equity they hold in the Chinese local company to the offshore holding. This will typically convert the local company into a WFOE (Wholly Foreign Owned Enterprise).

The offshore holding company will then be the vehicle seeking VC investment, future funding as well as for listing or be merged. All equity events happen in offshore. Companies’ funding and IPO proceeds will be kept offshore, and remit into China as and when operation required. Chinese founders’ assets, rights and proceeds stay offshore. The whole exercise is carried out essentially with an IPO at an overseas stock exchange, such as NASTAQ or Hong Kong Stock Exchange in vision. (The concept and process is visualized in chart 5.)

Chart 5 Foreign VC Offshore Investment Process

Source: A legal perspective on China’s venture capital rush, Mar 2006

Restrictions in China’s corporate regulations and limitations at the domestic capital markets explain foreign VC’s preference in taking offshore route to organize their China investment. VC investors rely normally on preferred stocks or convertible preferred stock to secure a preferential return. Chinese corporate regulations allow only one class of common stock for a FIVCE with investment in a Chinese portfolio company.

Notably, local VC firms would have the possibility to arrange preferred stock scheme with their investee company according to a newly issued charter regulation applicable to domestic VC firms. This gives rise to concern on the principle of national treatment under WTO law.

Moreover, China domestic stock market does not provide a ready access for venture-backed companies. The conditions for listing at Shanghai or Shenzhen main-board market are too stringent for high-tech start-up companies. Even if listing conditions could be met, the queue in the pipeline waiting for a listing window is at the moment frustrating. In fact, the two domestic stock exchanges have halted the IPO since two years in the call for addressing the notorious overhang of nontransferable legal person shares.

The undergoing endeavor is focusing on floating all stock legal person shares. Since the value of stock legal person shares is roughly twice of those trading in the stock exchange, full floating of legal person shares at stock is imposing acute challenge on the market place.

This would mean that the suspension on IPO of new shares would be expected for a rather extended term. By leveraging on an offshore holding structure, foreign VCs could take advantage of the corporate governance in a jurisdiction where they feel most comfortable and bypass the restrictions under Chinese corporate law. VCs could take the

price. Also the farmer’s does not need to travel long distances to sell their products. Moreover in fraud cases the user can block the user and can report a complain for the fraud user. There is no bargaining in this system so there is no matter of arguments in this system, each and every task is performed peacefully without any fights and arguments.The businessman performs auction in order to buy the crop. Among the top five bidders the farmer can choose the best one to whom he want to sell the crop. This auction will be for a fixed time limit. Within the given time limit the businessman will get chance to bid for the crops.  Thus this system is feasible and provides an innovativeness compared to the existing system. Table of Contents Chapter 1:- INTRODUCTION 1.1 PROJECT SUMMARY 1.2 PURPOSE 1.3 SCOPE 1.4 REPORT OUTLINE Chapter 2:- LITERATURE REVIEW Chapter 3:- PROJECT MANAGEMENT 3.1 PROJECT PLANNING AND SCHEDULING 3.1.1 Project Development Approach 3.1.2 Project Plan 3.1.3 Schedule Representation Chapter 4:- SYSTEM REQUIREMENT SPECIFICATION 4.1 USER CHARACTERISTICS 4.1.1 Admin 4.1.2 Farmer 4.1.3 Businessman 4.2 HARDWARE & SOFTWARE REQUIREMENTS Chapter 5:- SYSTEM ANALYSIS 5.1 FEASIBILITY STUDY 5.1.1 Technical Feasibility 5.1.2 Economical Feasibility 5.1.3 Operationl Feasibility 5.2 FUNCTIONS OF SYSTEM 5.2.1 Use Case Diagram 5.3 DATA MODELLING 5.3.1 Class Diagram 5.3.2 E-R Diagram 5.3.3 Activity Diagram Activity diagram for Verification Activity diagram for Crop Management Activity diagram for Bidding Activity diagram for report 5.3.4 Sequence Diagram Sequence diagram for Farmer Sequence diagram for Businessman Sequence diagram for admin 5.4 FUNCTIONAL AND BEHAVIOURAL MODELLING 5.4.1 Data Flow Diagram 5.5 DATABASE SCHEMA DESIGN 5.5.1 Database for Registration: 5.5.2 Database for Admin: 5.5.3 Database for crop_detail: 5.5.4 Database for Crop_auction_detail: 5.5.5 Database for Complain: 5.5.6 Database for Confirm_auction: 5.6 CANVAS 5.6.1 AEIOU Summary 5.6.2 Ideation canvas 5.6.3 Empathy Summary 5.6.4 Product Development canvas 5.6.5 Business Model canvas Chapter 6:- IMPLEMENTATION 6.1 TESTING 6.2 TEST CASE 6.3 IMPORTANT SCREENSHOTS 6.4 SAMPLE CODE Chapter 7:- CONCLUSION AND FUTURE WORK REFERENCES List of Figures Figure 3.1: Iterative Waterfall Model Figure 3.2: Gantt Chart Figure 5.1: Use Case Diagram for Crops Bazar Figure 5.2: Class Diagram for Crops Bazar Figure 5.3: E-R Diagram for Crops Bazar Figure 5.4: Activity diagram for Verification Figure 5.5: Activity diagram for Crop Management Figure 5. 6: Activity diagram for Bidding Figure 5.7: Activity diagram for Report Figure 5.8: Sequence diagram for Farmer Figure 5.9: Sequence diagram for Businessman Figure 5.10: Sequence diagram for Admin Figure 5.11: DFD Level-0 for Crops Bazar Figure 5.12: DFD Level-1 for Registration Figure 5.13: DFD Level-1 for Login Figure 5.14: DFD Level-1 for Crops Figure 5.15: DFD Level-1 for Auction Figure 5.16: DFD Level-1 for Complain Figure 5.17: DFD Level-1 for Report Figure 5.18: DFD Level-2 for Registration Figure 5.19: DFD Level-2 for Crops Figure 5.20: DFD Level-2 for Auction Figure 5.21: DFD Level-2 for Complain Figure 5.22: AEIOU Summary Figure 5.23: Ideation canvas Figure 5. 24: Emapthy summary canvas Figure 5.25: Product Development canvas Figure 5.26: Business Model canvas Figure 6.1: Home page Figure 6.2: About us page Figure 6.3: Registration page Figure 6.4: Login page Figure 6.5: Contact us page Figure 6.6: Verify User Detail page Figure 6.7: Verify Crop Detail page Figure 6.8: Reports Figure 6.9: Crop Details page Figure 6.10: Uploaded Crop Detail page Figure 6.11: Crop Wise Auction Detail page Figure 6.12: Crop Detail page Figure 6.13: Crop Bidding Result page Figure 6.14: Compain form Figure 6.15: View Complain page Figure 6.16: Home Page of application Figure 6.17: Welcome page of farmer Figure 6.18: Upload crop detail page Figure 6.19: View crop detail page Figure 6.20: Welcome page of businessman Figure 6.21: View bidding detail page Figure 6.22: Auction winner detail page List of Tables Table 5.1: Registration table Table 5.2: Admin table Table 5.3: Crop_detail table Table 5.4: Crop_auction table Table 5.5: Complain table Table 5.7: Confirm_auction table


Now-a-days, the use of mobile applications and websites have become very popular. Web applications and mobile applications are in great use and represents the best example for managing online information in its best way. It offers faster process to broadcast data and reduces the cost. By using the mobile application, there is flexibility in managing the data.


Crops Bazar is a web application as well as an android application that helps the farmer and businessman to interact with each other without any mediator. This system will help the farmer to get the actual price for his inputs (crops). With the help of this system, the farmer will be able to know the best value for his product (crops) and will not be fooled by the marketers. In fraudster’s cases the user will be able to block the fraud user.

1.2     PURPOSE

The main objective of this system is to help the farmer’s, businessman’s and the customer’s to get the best price from his inputs. In this system the farmer will upload crops and the businessman will then bid for the crop and then among the best five bidders one will be chosen. This system is also having a special feature of blocking the fraud user’s. In the existing system, the farmers were unable to get best price as were also fooled by the mediators or retailer. In this system the farmer will get to know the actual price of the particular product and thus there will be no possibilities of getting fooled. The major benefit of this system will be that, it is time saving and feasible. The farmer’s does not need to travel long distance to sell their products (crops). Everything can be easily done using a smart phone and an internet connection.

1.3     SCOPE

This system is going to be developed in order to have better communication between the farmer’s and the businessman’s. The user will be able to login into the system and perform the appropriate tasks that are the farmer will be able to upload the crops with the minimum price and on that basis the businessman will be able to perform the auction. The admin will be able to keep the track of all the activities of farmer’s and businessman’s and also keep the track of reports. In the existing system there was no facility of online payment as well as the admin was not able to track the actual amount of the product but in our system these features are adopted.


Chapter 1: In this chapter we have given the overview of the project, purpose of the project and  scope of the project. Chapter 2: This chapter describes the detailed study of the proposed system and the technologies used in it. Chapter 3: This chapter gives information about project planning and scheduling. It describes the approaches for project development. Chapter 4: It gives information about the software and hardware requirements of the project. It also include the functional ad non-functional requirements. Chapter 5: This chapter gives the information about the analysis of the system. It describes the study of feasibility-technical feasibility, economical feasibility and operational feasibility. It also describes the major functions of the project and contains the diagrams like ER diagram, class diagram, sequence diagram, activity diagram and data flow diagram to study the behavioral and functional aspects of the system. Chapter 6: This chapter includes the schema designing and database that is used to store the data. Chapter 7: This part includes the implementation of the project. Chapter 8: This chapter contains conclusion of the project and the remaining project work of the project.          


In the existing system, the agricultural marketing still continues to be in a bad shape in rural India. In the absence of modern marketing facilities, the farmers have to depend upon local traders and middlemen for the disposal of their farm produce which is sold at throw-away price. Additionally, the farmers have to travel long distance to sell their product (crops). In most cases, these farmers are forced, under socio-economic conditions, to carry on distress sale of their produce. In most of small villages, the farmers sell their produce to the money lender from whom they usually borrow money. According to an estimate 85 per cent of wheat and 75 per cent of oil seeds in Uttar Pradesh, 90 per cent of Jute in West Bengal, 70 per cent of oilseeds and 35 per cent of cotton in Punjab is sold by farmers in the village itself. Such a situation arises due to the inability of the poor farmers to wait for long after harvesting their crops. In order to meet his commitments and pay his debt, the poor farmer is forced to sell the produce at whatever price is offered to him. The Rural Credit Survey Report rightly remarked that the producers in general sell their produce at an unfavourable place and at an unfavourable time and usually they get unfavourable terms. In the absence of an organised marketing structure, private traders and middlemen dominate the marketing and trading of agricultural produce. The remuneration of the services provided by the middlemen increases the load on the consumer, although the producer does not derive similar benefit. In order to save the farmers from such problems, we have taken an initiative to develop an online electronic markets. This system will help the users to a great extend to overcome their problems. This system will help the farmers to know the actual price of the product in the markets so that the farmers can sell their product at the real price and gain profit. Moreover, in this system there is no middleman so the farmer’s does not need to sell their product at unprofitable price. Also the farmer’s does not need to travel long distances to sell their products. Moreover in fraud cases the user can block the user and can report a complain for the fraud user. There is no bargaining in this system so there is no matter of arguments in this system, each and every task is performed peacefully without any fights and arguments. The businessman performs auction in order to buy the crop. Among the top five bidders the farmer can choose the best one to whom he want to sell the crop. This auction will be for a fixed time limit. Within the given time limit the businessman will get chance to bid for the crops.  Thus this system is feasible and provides an innovativeness compared to the existing system.



3.1.1     Project Development Approach

Our project is developed using specific software development lifecycle. A software development process or life cycle is a structure imposed on the development of a software product. There are several processes, each describing approaches to a variety of task or activities that take place during the process. A process model is a development strategy that is used to achieve a goal that satisfies the requirements abiding by the constraints. Iterative Water Fall Model The waterfall model is the first process model to be introduced. It is also referred to as a linear sequential life cycle model. It is very simple to understand and use. In a waterfall model, each phase must be completed fully before the next phase can begin. This type of model is basically used for the project which is small and there are no uncertain requirements. At the end of each phase, a review takes place to determine if the project is on the right path and whether or not to continue or discard the project. In this model the testing starts only after the development is complete. In waterfall model phases do not overlap. The software development starts with requirements gathering phase. Then progresses through analysis, design, coding, testing and maintenance. Following figure illustrates waterfall model. F:\monica project\WATERFALL MODEL.PNG Figure 3.1: Iterative Waterfall Model System Engineering: Analysis: The aim of the requirement analysis is to understand the exact requirements of the students and to document them properly. 1. Requirement gathering and analysis:In this phase, the basic requirements of the system is understood. The information domain, function, behavioural requirements of the system are understood. All these requirements are then well documented ad discussed further with the customer, for reviewing. 2. Requirement Specification: The student requirement identified during requirement gathering and analysis activity are organized into a software requirements specification(SRS). Design:The design is an intermediate step between requirements analysis and coding. Design focuses on the program attributes such as- Data structure, Software architecture, Interface representation, Algorithmic details. The requirements are translated in some easy to represent form using which coding can be done effectively and efficiently. The design needs to be documented for further use. Coding:Coding is a step in which design is translated into machine-readable form. If design is done in sufficient detail then coding can be done effectively. Programs are created in this phase. Testing:Testing begins when coding is done. While performing testing the major focus is on logical internals of the software. The testing ensures execution of all the paths, functions behaviours. The purpose of testing is to uncover errors, fix the bugs and meet the customer requirements. Maintenance:Maintenance is the longest life cycle phase. When system is installed and put in practical use the error may get introduced, correcting such errors and putting it in use is the major purpose of maintenance activity. Similarly, enhancing system’s services as new requirements are discovered is again maintenance of the system. Advantages of iterative waterfall model: In iterative model we can only create a high-level design of the application before we actually begin to build the product and define the design solution for the entire product. Later on we can design and built a skeleton version of that, and then evolved the design based on what had been built. In iterative model we are building and improving the product step by step. Hence we can track the defects at early stages. This avoids the downward flow of the defects. In iterative model we can get the reliable user feedback. When presenting sketches and blueprints of the product to users for their feedback, we are effectively asking them to imagine how the product will work. In iterative model less time is spent on documenting and more time is given for designing.

3.1.2     Project Plan

In this part, we have done the planning of our project. We have four modules in our project: Verification module:In this module, verification of the user is done that is the user is verified whether he/she is a farmer or businessmen. This is done on the basis of the license of the particular user. This verification is done during the registration process. So after the completion of verification login can be done. Crop Management module:In this module, the crop updation management is done. Crop are properly managed for further auction process. Bidding module:This module manages the auction process. Here the bidding details are managed and the winner detailes are viewed. Online Payment module:After the generation of the winner details, this module is carried out. In this module, the online payment process is done.

3.1.3     Schedule Representation

 Figure 3.2: Gantt Chart



4.1.1     Admin

Login to access the website and allow user to login in. Allows the user to register in the system. Will verify the type of user. Keep track of auction. Block the fraud user if any.

4.1.2     Farmer

Register for a new account. Login to the account. Upload crops. View auction. Choose among the best bidder. Report a complain, if any

4.1.3     Businessman

Register for new account. Login to the account. View the uploaded crops. Perform auction. View bidding details and winner details. Report a complain, if any.


Software Requirement: Front end:  PHP and Android Studio 1.2.2 and above. Back end: MySQL Server Operating system: Microsoft Windows XP and greater, Android jellybean(4.0) and greater.   Hardware Requirement: RAM: 1GB and above. Hard Disk: Minimum 4GB and above. Processor: Intel core i3 and above  



Feasibilty study is used to determine the viability of an idea. The objective of such a study is to ensure a project is legally and technically feasible and economically justifiable. It tells whether the project is worth the investment. The proposed study  is to determine whether the proposed system is feasible. The feasibility study involves following main criteria:

  • Whether the user’s are satisfied using the currently running system.
  • The study will decide if the new system to be developed will benefit the user’s or not.
  • The study should be cheap and quick.
  • The result should inform the decision of whether to go ahead with a more detailed analysis.

The three tests of feasibility have to be carried out:

  • Technical Feasibility
  • Economical Feasibility
  • Operational Feasibility

5.1.1     Technical Feasibility

In technical feasibility study, one have to test whether the proposed system can be developed using the existing technology or not. It is planned to implement the proposed system Php and android studio. It is evident that the necessary software and hardware are available for the development and implementation of the proposed system. Hence, the solution is technically feasible.

5.1.2     Economical Feasibility

As a part of this, the costs and benefits associated with the proposed system compared and the project is economically feasible only tangible and intangible benefits outweigh costs. The system development costs will be significant. So the proposed system is economically feasible.

5.1.3     Operationl Feasibility

It is a standard the ensures interoperability without stifling competition and innovation among user’s to the benefit of the public both in terms of cost and service quality. The proposed system is acceptable to user’s. so the proposed system is operationally feasible.


5.2.1     Use Case Diagram

Use case diagram models the functionality of a system using actors and use cases.  Figure 5.1: Use Case Diagram for Crops Bazar


5.3.1     Class Diagram

Class diagrams are used to capture the static view of the system. Basically class diagram represents how to put various objects together. The class diagram gives  an overview of a system, in which various classes and relationship among these class is represented.  Figure 5.2: Class Diagram for Crops Bazar

5.3.2     E-R Diagram

C:\wamp\www\Crop_bazar\images\er.png Figure 5.3: E-R Diagram for Crops Bazar

5.3.3     Activity Diagram

The activity diagram is a graphical representation for representing the flow of interaction within specific scenerios. It is similar to a flow chart in which various activities that can be performed in the system are represented. This diagram must be read from top to bottom. It shows the sequence of activity and state. Activity: Represents the performance of task or duty in the work flow.


Start state: Shows the beginning of the workflow. End state: Finds the final or terminal state.       Activity diagram for Verification

 Figure 5.4: Activity diagram for Verification   Activity diagram for Crop Management

 Figure 5.5: Activity diagram for Crop Management       Activity diagram for Bidding

Figure 5. 6: Activity diagram for Bidding       Activity diagram for report

 Figure 5.7: Activity diagram for Report

5.3.4     Sequence Diagram       Sequence diagram for Farmer

 Figure 5.8: Sequence diagram for Farmer       Sequence diagram for Businessman

 Figure 5.9: Sequence diagram for Businessman       Sequence diagram for admin

 Figure 5.10: Sequence diagram for Admin


5.4.1     Data Flow Diagram

DFD LEVEL-0:  Figure 5.11: DFD Level-0 for Crops Bazar   DFD LEVEL-1: Registration: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 1 FOR REGIS.PNG Figure 5.12: DFD Level-1 for Registration Login: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 1 FOR LOGIN.PNG Figure 5.13: DFD Level-1 for Login   Crops: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 1 FOR CROPS.PNG Figure 5.14: DFD Level-1 for Crops Auction: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 1 FOR AUCTION.PNG Figure 5.15: DFD Level-1 for Auction Complain: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 1 FOR COMPLAIN.PNG Figure 5.16: DFD Level-1 for Complain Report: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 1 FOR REPORT.PNG Figure 5.17: DFD Level-1 for Report DFD LEVEL-2: Registration: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 2 FOR REGIS.PNG Figure 5.18: DFD Level-2 for Registration Crops: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 2 FOR CROP.PNG Figure 5.19: DFD Level-2 for Crops Auction: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 2 FOR AUCTION.PNG Figure 5.20: DFD Level-2 for Auction Complain: C:\Users\NEEL PATEL\Desktop\DFD DIAGRAMS\LEVEL 2 FOR COMPLAIN.PNG Figure 5.21: DFD Level-2 for Complain


5.5.1 Database for Registration:

Table 5.1: Registration table


5.5.2 Database for Admin:

Table 5.2: Admin table


5.5.3     Database for crop_detail:

Table 5.3: Crop_detail table


5.5.4     Database for Crop_auction_detail:

Table 5.4: Crop_auction table


5.5.5     Database for Complain:

Table 5.5: Complain table


5.5.6     Database for Confirm_auction:

Table 5.7: Confirm_auction table


5.6      CANVAS

5.6.1     AEIOU Summary

C:\Users\NEEL PATEL\Documents\Bluetooth Folder\IMG_20161002_205707.jpg Figure 5.22: AEIOU Summary   Description: Environment: Environment describes the weather and atmospheric condition of a particular place at a given point of time. The environment in which this application will be used can be dusty, warm, crowded or noisy place. The place can also be AC rooms, offices, godowns. Depending upon these weather condition there can occur certain issues while using the application like connectivity problem, application failure, etc. Interaction: User will be interaction with this system to sell or buy the crops. The farmer will interact to upload his crops for selling while the businessman will interact to buy the crops by bidding for the crop. The admin will also interact to keep the track of all the activities of the user. Objects: The objects that will be used while using this system are mobile, laptop, computer, crops and internet connectivity. The problems that may occur while using these objects are bad internet connection, improper working of mobiles or laptops or computers. Activities: The various activities that are performed while running the application are user registration, user login, user verification, uploading crops, one time bidding for crops, view winner details, block fraud users, complaining and report generation. Users: The users using this system can be admin, farmer and businessman. The admin will keep track of all the activities of farmer and businessman. The farmer will upload his crops for sell, select the appropriate winner and the businessma will buy crops by performing one time bidding for the crops.

5.6.2     Ideation canvas

C:\Users\NEEL PATEL\Documents\Bluetooth Folder\IMG_20161002_205054.jpg Figure 5.23: Ideation canvas     Description: People: This system is useful and will solve the many problems of the people like farmer and businessman. The users involved in this system are admin, farmer ad businessman. Activities: The various activities that are performed while running the application are user registration, user login, user verification, uploading crops, one time bidding for crops, view winner details, block fraud users, complaining and report generation. Situation/Context/Location: The situation can be different for different places. For example, at market places the situation can be crowded, cool, dirty, noisy, etc. It can also be offices or godowns. Props/Possible Situation: The different props that will be used while creating and using the system are mobile, laptop, computer, printer and internet connection.

5.6.3     Empathy Summary

F:\monica project\EMPATHY SUMMARY.jpg Figure 5. 24: Emapthy summary canvas Description: Input through AEIOU framework: The AEIOU framework gives us the summary of  activities, environment, interaction, objects, and users involved in the system. The activities performed are uploading crops for selling and one time bidding for buying the crops. The environment while using the system can be crowdy, noisy, warm or cool. The interaction involved in the system can among farmer and businessmen or farmer and admin or businessman and admin. The objects used in the system are mobile, laptop, computer, and internet connection. The users involved are admin, farmer and businessman. Scouted Challenges: The challenges faced while using the system are time consuming, non-profitable business, no commitment, there is no fixed price to sell the crops, sell the crops at unfavourable place, price or terms. Among these problems the exact problem is no offline system is available to overcome these problems.

5.6.4     Product Development canvas

C:\Users\NEEL PATEL\Documents\Bluetooth Folder\IMG_20161002_204225.jpg Figure 5.25: Product Development canvas Description: Purpose: Our system targets at removing the problems of farmers in selling their crops as in offline system the farmers do not get the actual price for their product and they are fooled the the mediators. This system will eliminate this problem and avoid fraud users. Product Experience: This system is also created on android platform so the users can easily download it in their mobile and can use the system. This system will avoid the farmers from being fooled by the businessman and it is also profitable. Components: As we are also making the android application, it can be easily downloaded in the mobile phones and used through internet connection. Internet connection is necessary for using this system. People: The people using this system can be admin, farmer and businessman. The admin will keep track of all the activities of farmer and businessman. The farmer will upload his crops for sell, select the appropriate winner and the businessman will buy crops by performing one time bidding for the crops. Product Functions: Product function delivers the product experience. The main function of this system is online crops buying and selling between the farmer and the businessman. Product Features: The features that we have included in our system are uploading crops, one time bidding for crops, view winner details, block fraud users, choose best bidders, complaining and report generation.

5.6.5     Business Model canvas

C:\Users\NEEL PATEL\Documents\Bluetooth Folder\BMC Canvas.jpg Figure 5.26: Business Model canvas Business model canvas is used to validate the market significance of products and services which will be of technology nature in this case. Technology projects are often solutions or processes that solve a technical problem. However the market implementation of such solutions also require that the problem solution is designed to overcome not just the technical barriers but also market and business related barriers of costs, customer reach and collaborations and those that pertain to the practical nature of limited initial capacities within the team. Thus business model canvas can be used to visualize such market problems and customer expectations. This exercise will increase the market potential and penetration of technology goods and services. This will make them more effective in market. Customer Segment Customer  Segment  block  is  to  present  the  list  of  Personas,  organized  by Customer Segment. If you have more than one segments. It is always recommended to prioritize them. Examples:

  • Farmer
  • Businessman

Value Propositions The collection of products and services a business offers to meet the needs of its customers. The value proposition provides value through various elements such as newness, performance, customization, “getting the job done”, design, brand/status, price, cost reduction, risk reduction, accessibility, and convenience/usability. Examples:

  • Feasibility
  • Upload Crops
  • Perform Auction
  • Complain

Channels This business block comprises of a list of important Channels, linked to Personas or Segments if they differ substantially. Effective channels will distribute the system’s value proposition in ways that are fast, efficient and cost effective. An organization can reach its clients either through its own channels, partner’s channels or a combination of both. Example:

  • Internet
  • Web application
  • Play store
  • Website

Customer Relationships The customer relationship business block answers the following questions:

  • What type of relationship does each of our Customer Segments expect us to establish and maintain with them?
  • Which ones have we established?
  • How are they integrated with the rest of our business model?
  • How costly are they?


  • Contact Number
  • Email
  • Feedback

Revenue Streams The way a company makes income from each customer segment. Several ways to generate a revenue stream through our system are:

  • Advertisement
  • Auctioning
  • Commission

Key Activities It specifies the most important activities in executing a system’s value proposition. Example:

  • Website Development
  • Application Development

Key Resources This segment of the business model canvas answers the following questions:

  • What Key Resources do our Value Propositions require?
  • Our Distribution Channels?
  • Customer Relationships?
  • Revenue Streams?


  • Android Studio
  • Wamp Server
  • Internet

Key Partners This section comprise of the core parts of project. Like key partner, key supplier and key resources. Example:

  • Developer
  • Government Admin
  • Farmer
  • Businessman

  Cost Structure Cost Structure business block provides a list of Cost Structure elements with notes on their relationship to Key Activities. Examples:

  • Server
  • Android Studio
  • Computer
  • Laptop


6.1      TESTING

Software testing is an investigation conducted to provide stakeholders with information about the quality of the product or service under test.Software testing can also provide an objective, independent view of the software to allow the business to appreciate and understand the risks of software implementation. Test techniques include the process of executing a program or application with the intent of finding software bugs (errors or other defects), and verifying that the software product is fit for use. Software testing can provide objective, independent information about the quality of software and risk of its failure to users or sponsors. There are many approaches available in software testing. Reviewswalkthroughs, or inspections are referred to as static testing, whereas actually executing programmed code with a given set of test cases is referred to as dynamic testing. Static testing is often implicit, as proofreading, plus when programming tools/text editors check source code structure or compilers (pre-compilers) check syntax and data flow as static program analysis. Dynamic testing takes place when the program itself is run. Dynamic testing may begin before the program is 100% complete in order to test particular sections of code and are applied to discrete functions or modules. Static testing involves verification, whereas dynamic testing involves validation. Together they help improve software quality. Software testing is used in association with verification and validation:

  • Verification: Have we built the software right? (i.e., does it implement the requirements).
  • Validation: Have we built the right software? (i.e., do the deliverables satisfy the customer).

Verification is the process of evaluating a system or component to determine whether the products of a given development phase satisfy the conditions imposed at the start of that phase. Validation is the process of evaluating a system or component during or at the end of the development process to determine whether it satisfies specified requirements.

6.2      TEST CASE

Test case id Test case name Input Expected Output Actual Output Observation
1 User login Email id   and Password Homepage opens Homepage opens Pass
2 User login Email id  and Password Homepage open Error message “Incorrect Email id or password”. Fail
3. User Status 1.Active 2.Inactive Access to homepage When verified through Database Pass
4. User Status 1.Active 2.Inactive Access to homepage When not verified through Database Fail
5 Upload crop Crop details Upload successful Upload successful Pass
6 Upload crop Crop details Upload unsuccessful Upload unsuccessful Fail
7 View crop uploadeddetails View uploaded crop details Fetch the uploaded crop details Fetch the uploaded crop details Pass
8 View crop uploadeddetails View uploaded crop details Unsuccessful to fetch details Unsuccessful to fetch details Fail
9 Bidding for crops Bidding amount Bid done successfully Bid done successfully Pass
10 Bidding for crops Bidding amount Bid done unsuccessfully Error message “enter amount more than minimum amount” Fail


Home page F:\monica project\home.png Figure 6.1: Home page Home page describes the introduction of our system.   About us F:\monica project\ABOUT US.png Figure 6.2: About us page This page gives the introduction of our system. Registration F:\monica project\REGIS.png Figure 6.3: Registration page Registration page is used by the farmer and businessman for registering into the system. After this process they can login into the system easily. Login page F:\monica project\LOGIN.png Figure 6.4: Login page Here the user can easily login to their respective accounts by entering their valid email id and password. Contact us page F:\monica project\CONTACT.png Figure 6.5: Contact us page This pages shows the contact details.             For admin F:\monica project\f_verify_user.png Figure 6.6: Verify User Detail page F:\monica project\admin_verify_crop.png  Figure 6.7: Verify Crop Detail page F:\monica project\admin_reportlist.png Figure 6.8: Reports For farmer F:\monica project\farmer_crop_detail.png Figure 6.9: Crop Details page F:\monica project\F_view_uploaded_crop_detail.png Figure 6.10: Uploaded Crop Detail page F:\monica project\F_view_cropwise_auctiondetail.png Figure 6.11: Crop Wise Auction Detail page For businessman F:\monica project\Business_bidding.png Figure 6.12: Crop Detail page F:\monica project\b_cropsbidding detail.png Figure 6.13: Crop Bidding Result page Complain F:\monica project\Farmer_complain.png Figure 6.14: Compain form F:\monica project\f_view_complain.png Figure 6.15: View Complain page   ANDROID APPLICATION C:\Users\NEEL PATEL\Documents\Bluetooth Folder\Screenshot_2017-04-02-17-13-36.png  Figure 6.16: Home Page of application For Farmer: C:\Users\NEEL PATEL\Documents\Bluetooth Folder\Screenshot_2017-04-17-21-47-06.png Figure 6.17: Welcome page of farmer  Figure 6.18: Upload crop detail page C:\Users\NEEL PATEL\Documents\Bluetooth Folder\Screenshot_2017-04-17-21-48-20.png Figure 6.19: View crop detail page For Businessman: C:\Users\NEEL PATEL\Documents\Bluetooth Folder\Screenshot_2017-04-17-21-48-51.png Figure 6.20: Welcome page of businessman C:\Users\NEEL PATEL\Documents\Bluetooth Folder\Screenshot_2017-04-17-21-49-10.png Figure 6.21: View bidding detail page C:\Users\NEEL PATEL\Documents\Bluetooth Folder\Screenshot_2017-04-17-21-49-18.png Figure 6.22: Auction winner detail page

6.4      SAMPLE CODE

Login.php: <?php session_start(); include(“header.php”); include(“connect.php”); if(isset($_POST[‘btnlogin’])) { $email=$_POST[‘txtemail’]; $pwd=$_POST[‘txtpwd’]; $res1=mysql_query(“select * from admin_login where username=’$email’ and pwd=’$pwd'”); if(mysql_num_rows($res1)>0) { $_SESSION[‘user’]=$email; echo “<script type=’text/javascript’>”; echo “alert(‘Admin Login Succesfull’);”; echo “window.location.href=’admin_verify_user.php’;”; echo “</script>”; }else{ $res=mysql_query(“select * from registration where email_id=’$email’ and pwd=’$pwd'”); if(mysql_num_rows($res)>0) { $r=mysql_fetch_row($res); if($r[9]==”0″) { echo “<script type=’text/javascript’>”; echo “alert(‘Yet To verify’);”; echo “</script>”; } elseif($r[9]==”1″) { if($r[11]==”1″) { $_SESSION[“femail”]=$email; echo “<script type=’text/javascript’>”; echo “alert(‘Login Succesfull’);”; echo “window.location.href=’farmer_crop_detail.php’;”; echo “</script>”; }else if($r[11]==”2″) { $_SESSION[“bemail”]=$email; echo “<script type=’text/javascript’>”; echo “alert(‘Login Succesfull’);”; echo “window.location.href=’business_view_crop.php’;”; echo “</script>”; } }else if($r[9]==”2″){ echo “<script type=’text/javascript’>”; echo “alert(‘You Are Not Verified User’);”; echo “</script>”; }else if($r[9]==”3″){ echo “<script type=’text/javascript’>”; echo “alert(‘You Are Blocked By Admin Please Contact to Admin’);”; echo “</script>”; } }else{ echo “<script type=’text/javascript’>”; echo “alert(‘Check Email Id and password’);”; echo “</script>”; } } } ?> <!–//baner–> <!–about–> <div class=”about”> <div class=”container”> <h3 class=”title”>Login</h3> <div class=”about-text”> <div class=”col-md-6 about-text-left”> <form name=”form1″ method=”post”> <input type=”text” name=”txtemail” placeholder=”Enter Email ID”><br/> <input type=”password” name=”txtpwd” placeholder=”Enter Password”> <input type=”submit” name=”btnlogin” value=”LOGIN”><br/><br/> </form> </div> <div class=”col-md-6 about-text-right”> <img src=”” class=”img-responsive” alt=”” width=”350px” height=”350px”/> </div> <div class=”clearfix”> </div> </div> </div> </div> <?php include(“footer.php”); ?> Registration.php: <script type=”text/javascript”> function validation() { var re = /^[a-z,A-Z ]+$/i; if(form1.txtname.value==””) { alert(“Please Enter Your Name”); form1.txtname.focus(); return false; } else { if(!re.test(form1.txtname.value)) { alert(“Dont Use Special Character or Number in Name”); form1.txtname.focus(); return false; } } if(form1.txtadd.value==””) { alert(“Please Enter Your Address”); form1.txtadd.focus(); return false; } var re = /^[a-z,A-Z ]+$/i; if(form1.txtcity.value==””) { alert(“Please Enter Your City”); form1.txtcity.focus(); return false; } else { if(!re.test(form1.txtcity.value)) { alert(“Dont Use Special Character or Number in City”); form1.txtcity.focus(); return false; } } var re = /^[a-z,A-Z ]+$/i; if(form1.txtstate.value==””) { alert(“Please Enter Your State”); form1.txtstate.focus(); return false; } else { if(!re.test(form1.txtstate.value)) { alert(“Dont Use Special Character or Number in State”); form1.txtstate.focus(); return false; } } var a=form1.txtmobno.value; if(form1.txtmobno.value==””) { alert(“Please Enter Your Mobile No”); form1.txtmobno.focus(); return false; } else if(a.length!=10) { alert(“Please Enter Mobile No 10 Digit Long”); form1.txtmobno.focus(); return false; } else { for(i=0;i<=a.length-1;i++) { if(isNaN(a.charAt(i))) { alert(“Dont Use Character in Mobile Number”); return false; break; } } } a=form1.txtamobno.value; if(a.length>0) { for(i=0;i<=a.length-1;i++) { if(isNaN(a.charAt(i))) { alert(“Dont Use Character in Alternate Mobile Number”); form1.txtamobno.focus(); return false; break; } } } a=form1.txtemail.value; var re=/^[a-zA-Z0-9.-_]+@[a-zA-Z0-9.-_]+\.([a-zA-Z]{2,4})$/; if(form1.txtemail.value==””) { alert(“Please Enter Email ID”); form1.txtemail.focus(); return false; } else { if(!re.test(form1.txtemail.value)) { alert(“Please Enter Valid Email ID”); form1.txtemail.focus(); return false; } } var b=form1.txtpwd.value; if(form1.txtpwd.value==””) { alert(“Please Enter Password”); form1.txtpwd.focus(); return false; } else if(b.length<6) { alert(“Please Enter More than 6 Characters in Password”); form1.txtpwd.focus(); return false; } else if(b.length>10) { alert(“Please Enter Less than 10 Characters in Password”); form1.txtpwd.focus(); return false; } if(form1.seluser.value==”0″) { alert(“Please Select User Type”); form1.seluser.focus(); return false; } } </script> <?php include(“header.php”); include(“connect.php”); if(isset($_POST[‘btnregister’])) { $name=$_POST[‘txtname’]; $add=$_POST[‘txtadd’]; $city=$_POST[‘txtcity’]; $state=$_POST[‘txtstate’]; $mno=$_POST[‘txtmobno’]; $amno=$_POST[‘txtamobno’]; $email=$_POST[‘txtemail’]; $pwd=$_POST[‘txtpwd’]; $user=$_POST[‘seluser’]; if($_FILES[‘txtfile’][‘size’]>0) { $res=mysql_query(“select * from registration where email_id=’$email'”); if(mysql_num_rows($res)>0) { echo “<script type=’text/javascript’>”; echo “alert(‘Email ID is Already Exists’)”; echo “</script>”; } else { if($_FILES[‘txtfile’][‘type’]==”image/jpeg” || $_FILES[‘txtfile’][‘type’]==”image/jpg” || $_FILES[‘txtfile’][‘type’]==”image/png”) { $tmpname=$_FILES[‘txtfile’][‘tmp_name’]; $res1=mysql_query(“select max(regis_id) from registration”); $rid=0; while($r1=mysql_fetch_row($res1)) { $rid=$r1[0]; } $rid++; $img1 = “”.$rid.”.jpg”; move_uploaded_file($tmpname,$img1); mysql_query(“insert into registration values(‘$rid’,’$name’,’$add’,’$city’,’$state’,’$mno’,’$amno’,’$email’,’$pwd’,’0′,’$img1′,’$user’)”); echo “<script type=’text/javascript’>”; echo “alert(‘Registration Done’);”; echo “window.location.href=’login.php’;”; echo “</script>”; } else { echo “<script type=’text/javascript’>”; echo “alert(‘Please Select Image format in jpeg jpg or png’)”; echo “</script>”; } } } else { echo “<script type=’text/javascript’>”; echo “alert(‘Please Select License’)”; echo “</script>”; } } ?> <!–//baner–> <!–about–> <div class=”about”> <div class=”container”> <h3 class=”title”>Registration</h3> <div class=”about-text”> <div class=”col-md-5 about-text-left”> <img src=”” class=”img-responsive” alt=””/> </div> <div class=”col-md-6 about-text-right”> <form id=”form1″ name=”form1″ method=”post” width=”450px” enctype=”multipart/form-data”> <input type=”text” name=”txtname” placeholder=”Enter Name”> <textarea name=”txtadd” placeholder=”Enter Address”></textarea><br/> <input type=”text” name=”txtcity” placeholder=”Enter City”> <input type=”text” name=”txtstate” placeholder=”Enter State”> <input type=”text” name=”txtmobno” placeholder=”Enter Mobile No.”> <input type=”text” name=”txtamobno” placeholder=”Enter Alternate Mobile No.”> <input type=”text” name=”txtemail” placeholder=”Enter Email ID”> <input type=”password” name=”txtpwd” placeholder=”******”> <select name=”seluser”> <option value=”0″>–Select User Type–</option> <option value=”1″>FARMER</option> <option value=”2″>BUSINESSMAN</option> </select> <input type=”file” name=”txtfile” > <input type=”submit” name=”btnregister” value=”REGISTER” onclick=”return validation();”><br/> </form> </div> <div class=”clearfix”> </div> </div> </div> </div> <?php include(“footer.php”); ?>


Conclusion: The main aim of this project to make it easier for the farmers to sell their crops. This system helps to farmer to get the actual profit from their product. It is beneficial for both the farmer and the businessman. With the help of this the farmer will get to know the exact value of their product. In this semester, we have created the website for crops selling and buying online to overcome the problems of the farmer. Thus this system is very much beneficial for the users presently as well as in the future. Future work: In future work we are going to add online payment feature. Also, we will take advance deposit from the user so that in fraud cases it will help the victim. We can also keep the feature of tracking crops that will track the location of crops the farmer has uploaded.


Websites : [a]: [b]: [c]: [d]: [e]: Books :   For making UML diagrams: [1]      Oriented Modeling and Design with UML by Michael blaha and James Rambaugh. [2]      Software Engineering by Roger S. Pressman. Research paper:   [1] Ian Chaston, Terry Mangles, (2003) “Relationship marketing in online business‐to‐business markets: A pilot investigation of small UK manufacturing firms”, European Journal of Marketing, Vol. 37 Issue: 5/6, pp.753-773, doi: 10.1108/03090560310465134 [2]  Mr. Sanjay S. Nevase,Dr. Rajendra A. Rasal, “Online Selling of Vegetables and Fruits an Effectual Marketing Stuff “, International journal of multifaceted and multilingual studies, VOLUME-III, ISSUE-IX, 1st September 2016    

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