ITC E-Choupal

ITC E-Choupal

1. Submitted by: Geeta Hansdah (13PGP079) Sai Shilpa (13PGP124)

2. Corporate Background ITC was incorporated on August 24, 1910 under the name of 'Imperial Tobacco Company of India Limited'. The Company's ownership progressively Indianised , and the name of the Company was changed to I.T.C. Limited in 1974. In recognition of the Company's multi-business portfolio encompassing a wide range of businesses the full stops in the Company's name were removed effective September 18, 2001. The Company now stands rechristened 'ITC Limited'.

3. One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004 Only Indian FMCG Company to feature in Forbes 2000 List Ranks No. 5 among Indian listed Private Sector Companies by market cap . Rated as one of India’s Most Respected Companies (IMRB- Businessworld Survey 2006)

4. ITC E-Choupal

5. E- choupal concept E-Choupal is a Hindi word which means “ village meeting place ” Market is a meeting place where vendors and customers come together to do transactions. E-Choupal is a virtual market place where farmers can transact directly with a processor and can realize better price for their produce Bottom of pyramid model: It is referred to business model that deliberately target the poorest socio-economic group constituting large part of community, often using new technology .

6. Launched by the Agri Business Division of ITC in June 2000. Distinctive sourcing capability for ITC’s Foods business- Vertical Integration One of the largest initiatives among all Internet-based interventions in rural India . 'e-Choupal ' services today reach out to over 4 million farmers growing a range of crops - soyabean , coffee, wheat, rice, pulses, shrimp. over 40,000 villages through 6500 kiosks across ten states ( Madhya Pradesh, Haryana, Uttarakhand , Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerala and Tamil Nadu ).

7. Conventional Value Chain

8. Root Causes and Implications ROOT CAUSES Fragmentation Asymmetry Heterogeneity Weak Infrastructure IMPLICATIONS Weak Bargaining Power No access to real-time information Need for customized knowledge Dependence on middlemen

9. Process @ e- choupal Click & Mortar initiative ITC sets up a back-up physical service support at Choupal , through sanchalak ITC accumulates information and uploads all information on to e-Choupal web site(Customized ) weather, modern farming practices, and market prices from sources like Meteorological Department, Agri -universities, mandis (regional market) etc. Sanchalaks access this information and facilitate its dissemination to farmers . Power of information is working as the catalyst of transformation of the life of farmers by helping them to get improved yields from their farms and better price realization.

10. Win-Win situation for both Farmers better prices for their produce and improved the productivity of farms The company more profits and larger share of commodity exports were ensured

11. Enables transparent transactions with real time information flow. Participation of smaller as well as larger farmers. D oes not attempt total elimination of intermediaries. Eliminates the need for hierarchy of brokers. Connecting large producers/small producers and small users/large users Manage bureaucracy

12. Sanchalak Sanchalak is identified from within the e- Choupal village. Sanchalak is selected on the basis of education, age, family size, caste, political lineage and other affiliation. Sanchalak is made to take a public oath in which he swears to perform his job without any bias with full honesty and commitment. Sanchalak encourages farmers to become the member of e- choupal by explaining to the farmers various benefits, e- choupal can provide.

13. Sanchalak-Qualities Median wealth and status Able to read and write Part of an extended family Risk taking ability Willingness to try something new Ambitious Aspiration of earning additional income

14. Recruiting a local farmer from the community serves various purposes Trust No need for building physical infrastructure Acts as approachable and familiar interface for villagers

15. Motivation for Sanchalak A mean to help their community A profitable business for themselves Getting access to functional computer Increased social status

16. Returns for Sanchalak Sanchalak has a transaction-based income stream. Some of the Sanchalaks are making close to Rs. 100,000 as income from solely their e- choupal operations. The best Sanchalaks are also given awards in the meeting of Sanchalaks .

17. Samyojak T raditional middle-men who now take care of the warehouse hub. F ulfill critical jobs like cash disbursement, quantity aggregation and transportation. No exploitative power due to information symmetry and organization.

18. Why Samyojaks agree to work with ITC? Company has made it clear that they will continue to buy through them. Company offers significant commission to samyojak for services. Agents are fragmented and fear other agents might gain the promised e-choupal revenues.

19. eChoupal facilititates It transmits Information (weather, prices, news ) It transfers Knowledge (farm management, risk management ) It facilitates sales of Farm Inputs (screened for quality) It offers the choice of an alternative Output-marketing channel (convenience, lower transaction costs) to the farmer right at his doorstep It is an interlocking network of partnerships ( ITC + Met Dept + Universities + Input COs + Sanyojaks , the erstwhile Commission Agents) bringing the “best- inclass ” in information, knowledge and inputs.

20. THE SOCIAL IMPACT OF e choupal Children are using computers for schoolwork and games. Children are using computers for schoolwork and games. Villagers access global resources to learn about agriculture. Youngsters in the village use computers to research the latest movies, cell-phone models, and cricket News.

21. Other Services through eChoupal Distribution of Products and Services to Rural Markets Choupal Sagar Through Sanchalaks Micro marketing Product/Services Demos Marketing and Brand Building activities Pilots Bhoomi , e-governance project eHealth with Private Health Service Providers eEducation Rural BPO

22. Evaluation of E- choupal

23. Problems encountered Infrastructure inadequacies Power supply Telecom connectivity and bandwidth Impart skills to the first time internet users in remote and inaccessible areas of rural India.

24. Innovation… key to overcome problems Power back-up through batteries charged by Solar panels. Upgrading BSNL exchanges with RNS kits, installation of VSAT equipment . Mobile Choupals . Training of Sanchalaks . 24x7 helpdesk etc.

25. Implementing Technology@rural Power Connectivity Website

26. Local Language portal Content creation major element of the model Involvement of farmers in content creation Layout of website, language of information, contents all are decided on the advise of the farmers. This goal was supported by creating a B2B site Integration of transactions directly to the backend ERP Key challenge at this stage was personalization of content for the fragmented and heterogeneous farmer groups

27. Access to Price Information – Anytime In the Village

28. Transparency and Accuracy in Weighment

29. Modern Methods for Quality Assessment

30. ITC E-Choupal 7 P’s

31. Product Portal for information dissemination for benefit of farmers. Place e-Choupal within 5km radius serving 10 villages. A processing center within 25 - 30 km radius. People Sanchalak Samyojak Farmers ITC staff Price NIL

32. Process

33. Physical Distribution Sanchalak’s place Choupal Sagar Promotion Carries out CSR activities as part of promotions Provided livelihood to 5 million people (work, education) Social and Farm Forestry Water shade development Agriculture development Choupal Pradarshan Khet

34. SWOT Analysis ITC E-Choupal

35. Strengths Delivery of real –time information Preference over mandis Easy access to any e- Choupal Sanchalak is educated & trained in computer operations. Low Transactional costs Use of Technology

36. Weaknesses Power unavailability in Rural India. Poor Telecommunication Infrastructure. Lack of proper roads, limiting vehicle access. Aggressive influence of Mandi traders.

37. Opportunities Access to the underserved rural markets. New business opportunities (similar to choupal sagar ). Farmers wish to negotiate prices at mandi but face the issue of lack of unity. Business partnerships with other companies.

38. Threats Demand for Unwarranted additional payments by the Sanchalaks . Competitors attempt to divert produce from farmers . Political influence in villages.

39. Stakeholders

40. e- choupal : Strategic Thrust Procurement: cost & quality optimisation sourcing support to the Foods business cost-effective sourcing for exports/domestic external business Rural Distribution ‘last mile connectivity’ diverse range of goods/services to the rural consumers Financial Services insurance (focus: weather) credit (focus: Kisan credit card scheme) Rural retail 23 Choupal Saagars operational Rapid expansion planned in identified rural markets and Tier 2, 3 & 4 towns

41. Critical Success Factors Comprehensive knowledge of rural markets. Designing a Win-Win transaction model. Selection of Sanchalak . Evolving an appropriate user interface(IT). Bottom-up model for entrepreneurship.

42. Choupal Saagar

43. Culmination of all farming activities in one place. Malls that double up as shopping and facilitation centers for farmers. Positioned within tractorable distance of 30 e-Choupal centers and their user communities. Services offered Training Investment advice Agricultural expertise B anking

44. Products In choupal saagar cosmetics, garments soaps, detergents and toothpaste electronics, appliances TVs, DVD players pressure cookers room heaters watches sewing machines and grinders cigarettes Motorbikes or even tractors are also available

45. Brands Sonata watches , Maxima and Usha Prestige and Hawkins Marico Italio , Cosmo (Solar products), Eveready, Philips and LG John Players, Springwood TVS, Eicher , Mahindra

46. One Stop destination for farmers The farmer, with his family, drives into Choupal Saagar in a tractor trolley laden with the produce from his field, he proposes to sell. His grain weighed on the digital weighing machine, he drives on to the godown where the produce is unloaded. Meanwhile, his kids can enjoy the swings and video games and his wife may like to move around and select the items she needs for the household. As soon as the farmer gets his cash, they make the required purchases and drive back by evening. They can, for a change, have their lunch in the cafeteria. If he intends to, he can even carry fertilizers and pesticides and get a diesel fill for his tractor. It also has a BPCL outlet selling diesel and petrol, and an average farmer buys fuel for Rs 3,000 or above.

47. Each mall has a turnover of over Rs 3 crore per annum. 24 choupal saagars 11 MP 5 Maharashtra 8 UP

48. ITC CSR Initiatives Mission Sunehra Kal

49. CSR Initiatives through e Choupal : “ Sunehra Kal ” Sunerha Kal (CSR) Initiatives focuses upon Improving f armer livelihood Long term community i mpact programs Livestock Management programs Water Management Self Help Groups focusing on women Leveraging capability of ITC ‘s management skills The knowledge & experience of NGO’s

50. ITC is focusing on strengthening primary education , health & s anitation in rural India. Focus on women’s e mpowerment & gender e quality Already experimented with the concept in Madhya Pradesh. Has plans to expand into Uttar Pradesh and Maharashtra.

51. Choupal Pradarshan Khet CSR initiative through ITC E-Choupal

52. Choupal Pradarshan Khet (CPK) A Holistic , Integrated farm extension program aimed towards yield improvement of focus crops Holistic: Seed to Seed. Integrated : Involvement of all stake holders . Yield improvement: Through better & proven Agronomy . Focus crops: Strategic interests of the nation.

53. CPK – Famer Registration Status

54. CPK –Crop portfolio

55. ITC Horticulture At the backend of ITC E-Choupal

56. Crop calendaring for farmers in the Cluster

57. Support through equipment

58. Quality improvement through Nurseries

59. Happy Farmer with better quality produce

60. And to the final Customer…

61. Choupal Fresh

62. Choupal FRESH

63. Choupal Saagar to Choupal Fresh Fresh food wholesale and retail initiative Leverages its extensive backward linkages with farmers and supply chain efficiencies.   Six Choupal Fresh retail stores in Hyderabad, Pune and Chandigarh

64. The E-Choupal portfolio In soya bean-Elimination of non-value adding costs. In wheat- value from raceability -establishing of brand “ Aashirwad ” wheat flour. In horticulture –Demand driven production –Value to farmer and consumer” Choupal Fresh”. In potatoes- Variety /quality linked production to brand “BINGO”. I n crop extension –best practices and technologies to farmers fields through Choupal Pradarshan khet . In rural markets- cost effective delivery of a range of goods and services through Choupal Saagar In rural resource development- water,women empowerment, SHGs, livestock ,education – sunhera kal .

65. Accolades United Nations Industrial Development Organisation (UNIDO) Award  at the International C onference on Sharing Innovative Agribusiness Solutions 2008  at Cairo for ITC's exemplary initiatives in agri business through the e-Choupal. The  Ashoka - Changemakers 'Health For All' Award 2006 for the Rural Health Services model for delivery of health services through the e- Choupals . The Stockholm Challenge 2006 . This award is for using information technology for the economic development of rural communities.

66. Strategic Rationale Blend multiple competencies residing within the ITC Group to create new avenues of growth. Best fit between internal capabilities and emerging market opportunities. Each segment enhances the depth and width of ITC’s FMCG distribution capability. Business model retains critical elements of value chains within ITC with other elements outsourced.

67. References http:// www.itcportal.com/businesses/agri-business/e-choupal.aspx http:// www.itcportal.com/media-centre/press-reports-content.aspx?id=627&type=C&news=CHAUPAL-SAGAR-Unlocking-rural-markets http :// www.itcportal.com/sustainability/sustainability-report-2013/mission-sunehra-kal-01.aspx http://www.it.iitb.ac.in/~ prathabk/egovernance/egov_success_stories_bhoomi.html http:// www.business-standard.com/article/companies/itc-delays-choupal-sagar-project-108120201090_1.html http://articles.economictimes.indiatimes.com/2007-10-23/news/27675247_1_big-bazaar-retail-chain-top-cities

68. Thank You