ITCITC

ITC is one of India's foremost multi-business enterprise with a market capitalization of US $ 45 billion and a
turnover of US $ 7 billion

FMCG

Hotels

Agri

Commoditie
s & Rural
services

Paperboar
ds &
Specialty

Packaging

Agribusiness

Informatio
n
Technolog
y

AgriBusinessesILTD

Echoupa
l

ITC's echoupal
boosting
company's
FMCG
business

ITCITC
The agri-business arm, which runs the
e-Choupal network, serves as the
back-end source of raw materials
that go into ITC's personal care
products and packaged foods.
Key driver for the FMCG business that
comprises brands like Sunfeast,
Aashirvaad, Vivel and Fiama Di Wills.
More than 160 companies ride on the
e-Choupal network includingBayer,
BASF,State Bank of India, Bharat
Petroleum, Nokia, TVS Motors,Maruti
Suzuki India,Tata Motors and
Monster.com.

Data as on 25 Jul 2012

ITCITC

The Value Chain Farm to Factory Gate

'e-Choupal' also unshackles the
potential of Indian farmer
Indian agribusiness sector globally
uncompetitive, despite rich &
abundant natural resources.

Trader

Supply
Chain

Conceived to tackle the challenges

Fragmented farms, weak
infrastructure and the involvement of
intermediaries
Involves the installation of computers
with Internet excess in rural areas of
India

Farmer

Commission
Agent
Wholesaler
Retailer
Consumer

Farmer

Sanchala
k
Wholesal
er

Retailer

Consum
er

System followed before e-Choupal

Farmers taking output nearest
mandis(typically 30-50 kms away)
Transactions outside mandi
prohibited
CAs bid
Inefficiencies
Procurement at lower prices
Faulty weighing
Payment on credit
No storage space
Low flow of information
farmers isolated, late price
discovery
No weather information
No information about best
practices
Limited to one sided flow of
information as well as products
Highly unproductive

EChoupal : Web Enabling Indian Farmer

May 1999 Sivakumaran and team conceived the idea alternative to

mandi system

Information to choose between mandi or ITC, when to sell, transparency

ITC's farmer-friendly website www.echoupal.com

Data accessed by the farmers

Weather and crop conditions,

best practices in farming,

ruling international prices

Discussion forum

News page

e-Choupal model created two-way multi-dimensional channel

Information soil testing lab

Herbicides, sowing seeds, fertilizers

Instant grow gas lanterns

ITC overcoming As is Process

Present status
Farmers only sold their crops at
mandis

Through E-choupal
ITC helped them to decide where to
sell

Travelling to mandis cost heavily ITC came up with the plan of

to farmers
reimbursing the transportation
expenses
It took days for the information
to reach village from city

Through echoupal, they could get

updated market information

Government has confined

agricultural transactions to the
mandis

ITC convinced government of the

benefits to the farmer and economy if
transactions shifted outside mandis

No information about the crop

improvement or various
practices that should be
followed

Echoupal suggested best practices

that a farmer could follow to gain
maximum benefits

Issues with the process before E-Choupal

implementation
Conventional Supply Chain for
agricultural produce

Problems at the Mandis

Overcrowding of Mandis
30-50 Kilometers to the nearest
Mandi
Inaccurate weighing scales
Delay in payment by Cas
2-3 days to get into Mandi
No storage facilities

On the field
No access to quality inputs
like
seeds,
herbicides,
pesticides
No
access
to
critical
information
like weather
reports, going price at the
Mandis
Risk Aversion

E-Choupal the solution

Empowered the farmers by providing them information
Localized weather forecast-helped timing of related operations
like application of herbicides and pesticides
Best practices
Market Information-world demand, world production, mandi
prices, mandi trading volume-helped farmers decide whether to
make the trip to the mandi and the price he would get
Forum to connect with experts and other farmers to solve common
problems
News Page- contained all news relevant to farmers like MSP,
subsidies, innovations in agriculture

What differentiates E-Choupal from other such

initiatives?
Work with cultural
controlling it
Involved farmers in
website

infrastructure
the

instead

development

of

of
the

Use of simple local vernacular Hindi

No force on the farmer on where to sell his final
produce
Transparency

CONVENTIONAL WISDOM
Farm to factory model
Purpose: To break the conventional cycle
of
village A mandi B factory C
Idea: To incorporate e into the age old
tradition of
village choupals to facilitate
reorganization
of the channel
Rationale:
Knowledge shared and captured in the
traditional choupal could be extraordinarily
useful to farmers
In absence of telecommunication and
electricity, increase in time for the travel of
news
Cash flow uncertainty was making the

BENEFITS OF ECHOUPAL
Easy access to information in
local language on the weather &
market prices, knowledge on
scientific farm practices & risk
management, facilitate the sale
of farm inputs
Enhance the ability of farmers to
take decisions
Eliminates wasteful
intermediation and multiple
handling
Increased transparency in
system by use of technology
Prevented exploitation of farmers
at the hand of commission
agents in Mandis
Positively benefitted the

ITCITC

e-Choupal in terms of e-business

e-business, is the application of Information and communication

technologies (ICT) in support of all the activities of business
Commerce constitutes the exchange of products and services between
businesses, groups and individuals and can be seen as one of the
essential activities of any business
ITC e-Choupal is an innovative market-led business model designed to
enhance the competitiveness of Indian agriculture. e-Choupal leverages
the power of Information and Digital Technology and the internet to
empower small and marginal farmers
e-Choupal model of ITC have an inherent Business model with social
goals

ITCITC e-Choupal in terms of e-business (contd.)

e-Choupal leverages the power of Information and Digital Technology to provide
farmers with a host of services related to know how, best practices, timely and
relevant weather information, transparent discovery of prices and much more
e-Choupals not only connect farmers with markets but also allow for a virtual
integration of the supply chain and create significant efficiencies in the
traditional system
Under e-choupal, ITC has provided computers with Internet access at their
centers which enable the farmer to obtain information on mandi process, good
farming practices and place orders for input materials like seeds and fertilizers
The model followed by ITC e-choupal currently is a combination of B2B and C2B
model as almost equal amounts of raw materials are procured from mandis and
e-choupals.

ITCITC

e-choupal: C2B Model

Model individual customers offer to sell products and services to

companies who are ready to purchase them either directly or through
an intermediary
Goods & Services

C2B
Intermediary
Money

C2B Model
In case of ITC e-choupal, the intermediary role is played by
Sanchalak who is responsible for sharing the benefits offered by the
Website and helping the farmers in communicating their problems via
the site

Primary- Agriculture

Secondary- Manufacturing and

transportation

Tertiary- Services

Heavily dependent on the

availability of natural resources

Natural ingredients are used to

create products and services that
are consequently used for
consumption

Service sector plays an important

role in development of the other
two sectors

Indias Agriculture production

occupies the second spot in the
world

India occupies the 12th spot in the

world when it comes to nominal
factory production in real terms.

With regards to output in the

services sector, India occupies the
13th spot in the world

Contributes almost 15.7% of

nationals GDP

Contributes almost 28 percent of

the GDP

This sector accounts for almost 55

percent of Indias GDP

72% of the population and 60% of

the nations workforce is
dependent over agricultural sector

14 percent of the aggregate

workforce in the country is
employed

It employs approximately 23
percent of the Indian workforce

Challenges faced by the Agricultural

Sector
Lack of access to quality inputs, seeds, herbicides, pesticides
Under employment and disguised unemployment
Lack of knowledge
Lack of information such as weather reports
Unfair practices/ presence of middlemen
Fragmented land holdings
Issues associated with Mandi system
Limited capacity for risk

Benefits of
IT
Facilitate exchange of information between farmers
Source of information to support decision making
Facilitates planning
Access to wide variety of knowledge to increase
productivity
Improved supply chain efficiency
Improved risk capacity
Increased awareness of the current government schemes
and market practices

Socio-cultural
Implications

 Agriculture is not just

economically but socially vital
in the Indian context
Contribution to GDP - 23%
Workforce employed - 66%
Serves needs of over a billion
people
Practices followed widely are
archaic
Direct effect on productivity

Lacking infrastructural support

required to gain access to
available information
Lack of timely and relevant
information
Living standards of workers not
reflective of performance of the
sector
Most of the part of the profits is
absorbed by intermediaries

Industrys
best practices,
expert
guidance,
weather
updates, etc.
at their
disposal

Infrastructure
development
initiated used
by farmers,
even school
students

Proficiency in
basic
computer
handling skills
now
generating
employment

Intermediaries
are
themselves
involved in
this system,
profit no
longer at cost
of farmers
loss

Distance no
longer an
issue
hampering
awareness of
ongoing of the
market

Current status of e- Choupal

Current status of e- Choupal

E- choupal version 3.0 The

DEEPENING

Awards
ITC's e-Choupal has won numerous awards:
United Nations Industrial Development Organisation (UNIDO) Award
TheAshoka - Changemakers 'Health For All'Award 2006
TheStockholm Challenge 2006
Innovation for India Award 2006
TheDevelopment Gateway Award 2005
The'Golden Peacock Global Award
The Corporate Social Responsibility Award 2004
World Business Award
The'Enterprise Business Transformation Award'forAsia Pacific (Apac)
PC Quest'sIT Implementation Awardin the'Best Project'category.
TheGolden Peacock Innovation Award 2004.
TheNASSCOMaward for'Best IT User in FMCG'in 2003.
TheSeagate Intelligent Enterprise of the Year 2003 Award

Eko Financial Services

India
and

ITC e-Choupal

Similarities
Both are ICT innovations
Both are aimed at helping people not having access to
technology on a routine basis
Both provide access to a wider population especially
those living in rural areas
Both reduce transaction costs by removing
intermediaries and other costly channels
Both lead to similar opportunities at the bottom of the
pyramid

Differences
Eko India Financial
Services

ITC e-Choupal

Financial services industry

Agriculture

Sustainability is still a question

Highly successful

Lacks the financial muscle with

ITC
Dependent on retail outlets for
distribution
Competition from larger players

Funding not an issue

No such dependency
Stronghold in the market

Learnings from ITC e-Choupal

Use of local expertise and leaders to transfer knowledge
to rural masses
Involving intermediaries in the new system to gain
advantage of their knowledge base
Employ systems view thinking to take advantage of
existing channels and develop workable alternatives
Creation of shared value through focus on financial
gains for everyone
Collaboration with other institutions like MFIs, Banks,
telecom companies

THANK YOU