BSAP Conference, HBS Dec 1-3, 2005

ITC eChoupal

ITCs e-Choupal A Platform Strategy for Rural Transformation

Ravi Anupindi Stephen M. Ross School of Business University of Michigan Ann Arbor, MI 48105 USA S. Sivakumar CEO - International Business Division ITC Limited Secunderabad, AP INDIA

December 1, 2005 BSAP Conference, HBS

Problems of Rural Indian Farmer

Sell: sunk costs, inconvenience, other losses Mandi
Transaction Price Discovery @ Sell Transaction

Farmer
Financing Information (Aggr)

Market Money Lender Extension Center

Knowledge (Use)

PRODUCT & SERVICE PROVIDERS

VILLAGE

Middleman

TOWN Buy: high prices, spurious goods, information not timely

Anupindi and Sivakumar

BSAP Conference, HBS Dec 1-3, 2005

ITC eChoupal

Root Causes and Implications

ROOT CAUSES IMPLICATION Fragmentation Weak Bargaining Power Dispersion No access to real-time information Heterogeneity Need for customized knowledge CHALLENGE Weak Infrastructure Dependence on middlemen (exploitative cycle of dependency)

e-Choupal Platform
Information (e.g. Price Discovery) Knowledge (Customized) Transaction
Choupal Sagar

PRODUCT & SERVICE PROVIDERS

Sanchalak

Samyojak

VILLAGE

TOWN

PAN-INDIAN

1. Information and Knowledge are free 2. Freedom of Choice in Transactions 3. Transaction-based income stream for the Sanchalak & Samyojak

Anupindi and Sivakumar

BSAP Conference, HBS Dec 1-3, 2005

ITC eChoupal

e-Choupal: Rural Indian Farmer

Sell: Price discovery @ village, choice, efficiency
Knowledge (Customized) Information
(e.g., Price Discovery)

Mandi
Choupal Sagar

Farmer
Transactions

PRODUCT & SERVICE PROVIDERS

Sanchalak

Samyojak

PAN-INDIAN VILLAGE TOWN

Buy: Information + Customized Knowledge @ village, high quality, competitive prices, superior service

e-Choupal: Current Scale and Vision

Year 2005: Kiosks: 5000 Villages: 30,000 Farmers: 3.5 million Year 2010: Kiosks: 15000+ Villages: 100,000 Farmers: 10 million

Wheat Soybean Soybean & Wheat Coffee Aqua

Anupindi and Sivakumar

BSAP Conference, HBS Dec 1-3, 2005

ITC eChoupal

e-Choupal Platform for Rural Transformation

Empowered Community Responsive Grass-roots Organization INCREASING RETURNS ECOSYSTEM

Efficiency through Competition Power of Scale Benefits of Specialization

Anupindi and Sivakumar