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Priyankka Chaurasia
IT, UIT-RGPV
Agenda
1
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Future Scope
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Operating profits
Cash Profits
Ranks No. 4 among Indian listed Private Sector Companies by market cap. (@ April
09)
2006)
Diversified conglomerate with interests ranging from Tobacco to Hospitality
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Low Margins
Caught in a vicious
cycle of
underdevelopment
Low Investment
Low Productivity
Weak Market
Orientation
ITC e-Choupal
Started in the year 2000
Target Area so far 38,000 villages, 6500 kiosks, 9 states
Wholly owned by ITC
Fragmented farms
Weak institutions
Involvement of intermediaries
Information Asymmetry
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Pakka Adtiya
(Registered Dealer)
Agri-Input
Companies
Dealer/
Stockiest
Retailer
Money
Lender
Farmer
Broker
Processor
Trader
ITC-IBD
Agril University,
Met Dept,
Insurance Co.
Kaccha Adtiya
(Un-Registered Dealer)
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The Tactical
Imperative
ITCs distance
from Farmer
The Strategic
Imperative
The Social
Imperative
Horizontal
spread
Daily price
inflation
Vertical presence
Capture of Intraday Price shifts
Seasonal price
Inflation
Risk
management
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Pricing
Inbound
Logistics
Inspection
Grading
Weighing
and
Payment
Hub
Logistics
Technolog
ical
support
Pricing
Previous days closing price used as benchmark price for
next day
Mandi prices communicated to sanchalak through e-Choupal
portal
Sanchalak inspects the sample, assesses quality and gives
farmer a conditional quote and a note (name/village/quality
tests/approx. quantity/conditional price), if farmer decides to
sell to ITC
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Pricing
Inbound
Logistics
Inspection
Grading
Weighing
and
Payment
Hub
Logistics
Technolog
ical
support
Inbound Logistics
Farmer proceeds to the nearest ITC procurement hub with
the note
Some procurement hubs are ITC factories, others are purely
warehouse operations
ITCs aim is to have a processing centre within 30-40 km
radius of its farmers
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Pricing
Inbound
Logistics
Inspectio
n Grading
Weighing
and
Payment
Hub
Logistics
Technolo
gical
support
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Pricing
Inbound
Logistics
Inspectio
n Grading
Weighing
and
Payment
Hub
Logistics
Technolo
gical
support
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Pricing
Inbound
Logistics
Inspectio
n Grading
Weighing
and
Payment
Hub
Logistics
Technolo
gical
support
Pricing
Inbound
Logistics
Inspectio
n Grading
Weighing
and
Payment
Hub
Logistics
Technolo
gical
support
Hub Logistics
Farmer transports his produce to the nearest processing
centre or storage hub
ITC incurs the transportation cost
The farmer bears the risk of transportation until produce is
delivered and the sale is completed
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Pricing
Inbound
Logistics
Inspectio
n
Grading
Weighing
and
Payment
Hub
Logistics
Technological
support
Technological support
Nodal platform catering to commodity blending, agricultural
trading, e-choupal &rural distribution
24,000 personalized business function points
110,000+ pre-built business function points
Integrated Business Systems for Direct Agriculture
Procurement, Rural Distribution, e-Choupal Management,
Exports, Insurance, Aqua Processing & Commodity blending
Support for 8 local languages
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A win-win Deal
Farmers gain
Better information
Content
Better info timing
Less transportation
Cost
Transaction duration
Weighing accuracy
Professionalism
ITC gains
Disintermediation
savings
Freight costs
Quality control
Risk management
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Source: Seminar on Bottom of the Pyramid and CSR, IIM-K, Sept. 24, 2008
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Interest
Stakeholders
Farmer Community
ITC
Commission Agents
(Kachha
Adatiyas)
&
Pakka
Access to information
Empowered decisions
Improved agriculture
Economic benefits through lower transaction costs and
process efficiencies
Served with dignity
Knowledge bundled sale of goods and services
Co-opted in product design
Hope for a brighter future
Lower procurement costs
Direct interaction with farmers - Control on quality &
supply security
Low cost distribution channel
Access to market intelligence
Gain access to global markets through ITC and commission
to compensate some of the loss revenue
Drivers of
Supply Chain
Who are in
problems
Risk associated
with e-Choupal
Information
Local Mandi
Eroded dominance of
Commission agent
Logistics at hub
Mandi laborers
Authenticity of
information
Transportation
Storage facilities at
hub
Problem of Power
and internet
connectivity
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Future of e-Choupal
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e-Choupal 2.0
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e-Choupal 3.0.
The Deepening
NEW BUSINESSES:
1) Rural jobs and employability
2) Personalised agri services.
MORE INTERACTION: Through Choupal Saagars and
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